India News Online » News Analysis » Indian Politics » 

Petro hike : Congress turns tables on Left, BJP

	June 12, 2006

The Congress has managed to put the Left parties and the BJP on the backfoot by

getting state governments headed by it to reduce the sales tax on petroleum products. Maharashtra and Andhra Pradesh have already cut sales tax on petrol and diesel marginally while other Congress-ruled states and union territories

are in the process of doing so. Observers say that the Congress and the Manmohan Singh Government have now started moving in tandem to tackle the opposition onslaught on the issue of increase in the prices of petroleum products enforced by the Centre last week. The Congress strategy aims at taking the wind out of the sails of the Opposition campaign.



Expectedly, the Left parties and the BJP are unhappy at being outmanoeuvred on the fuel hike issue and have reacted to the Congress-ruled states’

reduction in sales tax on similar lines. Both have termed the Congress move as a diversionary tactic.

Speaking to reporters in Hyderabad after a meeting

of the CPI(M)’s all powerful central committee,

general secretary Prakash Karat side-stepped

queries on Petroleum Minister Murli Deora’s

request to Left and Opposition-controlled state

governments to go the Maharashtra way. He said,

“It is the Centre that has increased the prices and

it has to slash them and state governments will

follow. If the Centre takes the lead, foregoing some

of its revenues from excise duty and other taxes

or releases some amount from the oil cess pool

that it had accumulated, it would be fair to ask

the state government to sacrifice some of their

revenues from the sales tax.” Karat did not go

into the crucial issue of the desirability of Left

governments increasing their revenue from what

the CPI(M) had criticised as an “anti-people move.”

The BJP also appears to have been caught

unawares. The party, which hit the streets over

fuel price hikes, came up with a response identical

to that of the CPI(M), revealing in the process the

reluctance of its state governments to let go of the

additional resources that they hope to reap courtesy

the June 5 hike in fuel prices.

Speaking in the same vein as Karat, BJP

spokesman Prakash Javdekar said, “The Centre

should cut the Central taxes which make for up to

31 per cent of fuel prices.” The fixed excise duty

on petrol is Rs 13 per litre and needs to be cut

following which the Centre should call a meeting

of Chief Ministers to evolve a uniform sales tax

rate. The RSS, on the other hand, seems to be

siding with the Congress on the issue. In an article

in the `Organiser’, it has advised the BJP to follow

the Congress route instead of wasting time on

agitation for a Central cut.



No roll back, says Govt.

The UPA Government, on the other hand,

has toughened its stand on the issue saying that

there will be no roll back of the hike in the prices

of petroleum products even as the CPI(M) stepped

up its rhetoric to say that it wants a complete roll

back and not just reduction in the hike. Observers

say, it is increasingly evident that there may not

be any rollback by the Centre, even as the Congress

will shift the focus on the demand from the Centre

to the States. “There is a remote possibility of the

Centre accepting any roll back, but till the moment

the Union Government could do anything, the

Congress has tried to do something, asking its

state governments to absorb the burden of the

hike,” said a Congress functionary adding that the

party will try to convince its coalition state

governments like in Tamil Nadu and Assam to

follow their examples.

Apart from blunting the anti-hike campaign

of the BJP and the Left parties, which have called

for a country-wide protest day on June 13 on the

issue, the Congress strategy is meant to

demonstrate its endeavours to provide some relief

to aam aadmi. The strategy is also envisaged to

preserve the Manmohan Singh Government’s

“reformist space and image”, which could suffer

in the event of any rollback.

The Congress spokespersons, Abhishek

Singhvi and Rajiv Shukla, refrained from repeating

their “original demand” to the Centre for a

reduction in the hike. They instead hailed the

decision of the Congress states to provide relief to

the people, asking non-Congress states to do the

same. “We hope some of these parties displaying

disruptive politics on the streets emulate in their

stats even half of the measures being undertaken

by the Congress states,” said Singhvi. Asked

whether the issue was not settled and if the



Congress still stuck to its original demand, he said

: “This decision has flowed from our stand, our

demand has been partly fulfilled and the rest is

under Centre’s consideration.”

Observers say that there is ambiguity in the

CPI(M)’s stand on how far it will go to make the

UPA accept its demand for complete rollback of

the hike in oil prices. On Thursday, June 8, the

party said that it was keeping all its options open

including the withdrawal of support if the

Manmohan Singh Government did not roll back

the hike in oil prices. Terming the hike as

“completely unacceptable” and “totally avoidable”,

CPI(M) central secretariat member Nilotpal Basu

said, “If this government has any sense, it will

withdraw the proposal.” To a spate of questions

on the CPI(M)’s future course of action vis-a-vis

the UPA Government, Nilotpal Basu said, “it will

depend on how the situation developed, all options

are open, but right now we are concentrating on

mobilising the people against this policy decision

which the Government has taken.”

Even before the oil price hike issue is sorted

out, the CPI(M) has taken exception to the reported

move to hike the issue price of foodgrains under

the targeted public distribution system and cutting

allocation to beneficiaries. In a statement on June

4, the party said that the move would impact

crores of people and add to inflationary trends.

Cautioning the Government against taking such

measures, the party said it opposed this proposal

when it was first mooted in January. “Since then,

the prices of essential commodities including wheat

have sky-rocketed. AT a time when every measures

must be taken to protect the working people, a

large majority of whom are in the unorganized

sector, such anti-poor recommendations will have

a disastrous impact on the livelihood of crores of

people.”

Not to be left behind by the Left, the BJP has

launched a countrywide agitation against the

increase in petrol and diesel prices. Roping in the

NDA, the party has decided to hold an NDA

protest demonstration today, on June 12, and again

on June 19 at all district headquarters. Traffic came

to a standstill at more than 400 places all over the

Coinciding with the CPI(M)’s unhappiness with

the economic policies pursued by the Manmohan Singh

Government, the party has reportedly made it clear

that it will dump the United Progressive Alliance if the

Congress presses for a mid-term election. At its Central

Committee meeting in Hyderabad, the issue cropped

up during the discussion on general secretary Prakash

Karat’s report on the political and international situation.

The context was what the CPI(M) ought to do in the

event of the Congress seeking dissolution of the Lok

Sabha. A CPI(M) leader, who did not want to be

named, said, “We are aware that the Congress is

contemplating a mid-term poll any time now. The reason

behind its thinking is that the BJP has weakened

significantly and it could cash in on the situation.” He

said, “The Congress wants to increase its presence in

Parliament given the severe weaknesses in the BJP

and its allies. We are not part of this kind of thinking.

We don’t think the Congress would gain any

significantly than what it did in 2004.”

“It’s their (Congress) funeral. If they are so

confident and re-assured about winning a mid-term

poll, then we are not going to be a part of it. We will

snap ties and go it alone”, the leader said.

At the news conference at the end of the central

committee meeting, Prakash Karat said that the CPI(M)

has not set any time-table for forming the third

alternative. He said, “we want the non-Congress, non-

BJP parties to come together, not just for fighting elections, but on a platform with common understanding.”

Karat said the support sought from these parties

was issue-based and the question of a joint movement

did not amount to constituting the third alternative.

Asked about the CPI(M) relations with the Telugu

Desam Party, Karat said, “Let there be a realignment

at the national level and Andhra Pradesh will follow.”

After the anti-petroleum hike agitation tomorrow,

June 13, the CPI(M) would launch a national political

campaign in August when, according to party leaders,

the party’s policies would be taken to the people. The

campaign would focus on combating communal forces

and would propagate economic policies and measures

that the party advocates. The right to education, end

to caste oppression and provision of one-third

reservation for women in Parliament and state

legislatures would be the other demands to be

highlighted during the campaign. The central committee

also decided to submit a note to the Manmohan Singh

Government on its views on the performance of the

government and what needed to be done to improve

it. The note would contain areas of concern and the

areas where the CPI(M) differed with the UPA and

how it expects the Government to conduct itself. Party

leaders said the note would be prepared in a few days

and submitted to the UPA Government that would be

given sufficient time to respond before the CPI(M)

decides on its next step.



country on June 7 when the BJP workers and

leaders took to the streets shouting slogans against

the government and burying effigies. In New Delhi,

party president Rajnath Singh, who led the

agitation, criticised the Left parties for adopting

what he called, a “hypocritical dual approach” by

pretending to oppose the hike while continuing to

support the Government. The Congress, he said,

was using the aam aadmi (Common man) for

taking a decision that would adversely affect the

poor and middle class households.

In the Congress itself, different voices could

be heard last week on the hike in oil prices. After

meeting Congress president Sonia Gandhi, who

reportedly wanted the interest of the common man

to be protected, Petroleum Minister Murli Deora

left the issue open. He said, “My Ministry is not

considering any proposal to moderate the hike,

but we are a responsive government and sensitive

to the feelings of our allies and consumers,

tomorrow is another day.”

But after meeting Prime Minister Manmohan

Singh a day later on June 7, Murli Deora said, “no

rollback is being discussed.” Observers say that

the Prime Minister took a tough line and asked

Murli Deora to stand firm against any roll back.

The Prime Minister’s Economic Advisory Council

has warned against efforts to politicise the hike in

oil prices and emphasised that there should be no

roll back. Council chairman C. Rangarajan said in

New Delhi on June 8 that the overall inflationary

impact of the hike would be less than one per

cent.

The Centre has also blamed the high tax rates

in the states, specially those ruled by the Left and

the BJP, for high consumer prices of petrol and

diesel. The Petroleum Ministry said that the sales

tax on petrol is as high as 34 per cent in Andhra

Pradesh, 32.75 per cent in Mumbai, 30 per cent in

Punjab and Tamil Nadu and 27.78 per cent in

West Bengal.