Barely two days after a nationwide strike on fuel price hike by Opposition parties put the brakes on India, the United Progressive Alliance (UPA) government has decided to roll out a counter-attack.
Finance Minister Pranab Mukherjee has asked Petroleum Minister Murali Deora to launch a campaign citing facts and figures on how a rise in oil prices benefits the states more than the Centre.
The government will also strongly defend its move to keep the public sector oil marketing companies (OMCs) healthy. While the CPI(M) has come out with booklets and the BJP statistics, Finance Minister Pranab Mukherjee told Business Standard: “ What are they trying to say ? Are we, at the government, functioning just to appease them (the political parties) and allow our own companies to go sick?”
“On the one hand the government is trying to revive sick PSUs and on the other they want us to take steps that will result in oil PSUs going sick?” he added.
The Petroleum ministry campaign – Deora might either meet the press or place advertisements in dailies – will also highlight how state governments have contributed to the increase in prices of petro products by imposing huge sales tax on oil prices at local levels.
The Left bastion of West Bengal has imposed 25 per cent sales tax on petrol. In Left-ruled Kerala, the sales tax on petrol and diesel is 29 and 25 per cent respectively, while in BJP-ruled Gujarat, sales tax rates are 23 and 21 per cent on petrol and diesel, respectively.
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The Centre has also decided to lob the ball in the Opposition’s court: If the parties are so worried about rising oil prices, why aren’t they asking their governments at the state level to reduce sales tax.
A couple of years ago, when petrol prices were raised, the Left Front government in West Bengal had temporarily slashed its sales tax rates. However, this time, there was no such move.
When asked, Bengal Industry Minister Nirupam Sen said, “We did it earlier. We have not decided anything this time.” Biman Bose, the Left Front chairman in the state who has been a vocal critic of the Centre on price rise is non-commital. “It is a government matter. The party has nothing to do with it,” he said recently in Delhi.
The finance and petroleum ministry officials have exchanged notes to prepare the campaign material. The government has already come out with an advertisement in newspapers before the Opposition-sponsored bandh on July 5. It said, the price of kerosene and cooking gas is the lowest in India, in comparison to neighbouring countries.
The CPI(M) had countered the claim by saying that India has the highest petrol and diesel prices in the region. The next campaign will focus on the economics of petrol and diesel prices.
UPA managers have already ruled out a possibility of a rollback. Top Congress sources said, party president Sonia Gandhi was twice consulted –before and after the cabinet decision to hike the prices – and she did not object to the decision.
When it was discussed at the party forum, Gandhi reportedly said the prime minister and finance minister would take a call on the issue. She also told her party colleagues that the party should not interfere in “administrative decisions”.
As the CPI(M)-led Left parties have come out with leaflets contesting the Centre’s justification on an oil price hike, the UPA is also set to make a political statement.
A top leader of the UPA told Business Standard, “Earlier, Prakash Karat (CPI(M) general secretary) had come out with a similar booklet on the Indo-US Civilian Nuclear deal. They had incorporated arguments that suited them but had cleverly left out many other politically inconvenient points and facts. They have done the same thing this time and tried to mislead the people.”
Finance Minister Pranab Mukherjee held a meeting late on Wednesday evening with chief ministers of Congress-ruled states. He told Business Standard, “We discussed the GST issue. There was no talk about oil prices or sales tax on petro-products.”