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Another Jayalalitha in the making

It appears that Mamata Banerjee is yet another Jayalalitha in the making. The manner in which she has pressurised the prime minister and made the government yield to her whims on a number of issues reminds us of the days when Jayalalitha used to do the same.

Rolling back petroleum prices is not an issue; if something is done in the interests of the people, it must be welcomed. But the important question is: What is the real reason behind the roll back in the prices of petroleum products?

The government has not agreed to reduce the prices of petroleum products keeping in mind the public interest. Rather, it has done so in response to Banerjee's blackmail. And neither has she insisted on the price cut in the public interest. In fact, next year's assembly election in West Bengal is a major factor for this step.

Mamata is confident she can take on the CPI-M. If she does not react to the price hike, the Left Front will make an issue of it during the election, thereby taking the wind out of her sails. Apart from this, she is also upset over the inclusion of one more BJP MP from West Bengal into the Union Council of Ministers and the non-elevation of Ajit Panja to Cabinet rank.

It is also said a Cabinet decision against Bengal's jute bag lobby irked her. Last month, the Union Cabinet had marked a 20 per cent quota in the government sector for plastic bags. A powerful lobby from Calcutta is in the jute bag manufacturing business worth several thousand crore rupees. This lobby is allegedly preventing the introduction of plastic bags for packaging sugar, cement and other items in the government sector.

This lobby is so strong that they have monopolised the government sector in the name of jute mazdoors, when in fact the labourers are not benefitted in any way. The government loses Rs 5 on each jute bag, which means it incurs a loss of Rs 500 crore every year.

Union Textiles Minister Kanshiram Rana and Food Minister Shanta Kumar persuaded the prime minister and their Cabinet colleagues to allocate at least a 20 per cent quota for plastic bags to the government sector so that a lot of money could be saved. After this decision was implemented, the powerful jute lobby convinced Banerjee to pressurise the prime minister to suspend the Cabinet order. Later, when the prime minister's emissary went to Calcutta to negotiate with her, I was told that one of her conditions was that no plastic bags should be introduced. (These plastic bags are not the same ones which are hazardous to the environment.)

Today it is Mamata, tomorrow it will be Karunanidhi and Chandrababu Naidu the day after. How long will the prime minister yield to his allies? He needs to put his foot down, come what may. This is not to say he should throw away his government; rather that he must remain firm on certain issues. He is a very transparent leader, quite considerate and accommodative, but that does not mean he should yield to all sorts of pressures.

Everybody knows this hike took place because of the OPEC decision to increase oil prices. The government can only defer the decision, but cannot avoid it forever. If the price hike is deferred, the oil pool deficit will increase, and ultimately it has to be recovered from consumers. Either you pay today or you pay tomorrow with interest, but the fact remains that the people will have to pay.

One can understand that any hike in diesel prices will fuel inflation, but how long can we overlook harsh realities? Our domestic oil production has remained stagnant for several years, which has resulted in heavy imports of petroleum products. Seventy per cent of our requirement is met by imports. The oil pool deficit is going up by Rs 500 crore every month; it is expected to reach a whopping Rs 24,000 crore by the end of the financial year.

The government has Rs 38,000 crore as foreign exchange reserves, out of which Rs 18,000 crore have been allocated for the import of petroleum products. Under such circumstances, the government has no option but to decrease the consumption of petroleum products and reduce imports.

Rajiv Shukla