Ruling coalition suffers major setback

Meanwhile in India, the ordinary people and farmers are suffering from ever increasing prices of essential items such as food, fuel and fertilisers, while ruling politicians are filling their pockets with ill-gained money.  This is a country which a few months ago was basking in the "India rising’ glory, and where many Western opinion makers predicted that the county with it’s  democratic form of government will eventually lead India to greater progress than China.
Some farmers have rioted against denial of fertilsers to them by the state agency. But if it is in China, you can bet that story of rioting farmers  will appear in all Western news agency. Why is it that India is less newsworthy to Western media ?
This article is from an opinion column from The Star Malaysia.
Ordinary people have turned against the government over the ever-rising prices of essential items such as food and fuel. The failure to arrest relentless inflation is the biggest headache of Prime Minister Manmohan Singh’s government.

HOW fortunes change! Till a few months ago the ruling United Progressive Alliance of Prime Minister Manmohan Singh was coasting along, confident to retain power after the next general election due anytime before next May.

The economy was on a roll, growing at nine-plus percentage.

Despite an occasional scandal of ministerial misdemeanour and sleaze, the Prime Minister’s own reputation for financial integrity had remained unsullied. Now, in a matter of a few weeks, everything seems lost for the ruling coalition.

The Congress Party-led UPA, with Sonia Gandhi as its effective boss, is groping in the dark for ways to regain the peoples’ trust.

As of now, it appears an uphill task.

The multiple failures on the economic front were further compounded by a highly unimaginative political management, leading to bruising losses in state elections.

The last blow came a couple of weeks ago when the party failed to stop its main rival, the opposition Bharatiya Janata Party, from wresting power for the first time ever in the key southern state of Karnataka.

Overnight, the Leader of the Opposition and the prime ministerial candidate of the rival BJP-led National Democratic Alliance, L.K. Advani, had come to acquire wider, nation-wide acceptability.

More and more people now see the Leader of the Opposition as prime ministerial, a transformation in popular perceptions Advani, the erstwhile face of hard Hindutva, had craved for several decades.

But make no mistake about it. The Congress Party has been laid low, above all else, by the gathering economic mess.

Despite sleaze and scandal involving almost every senior minister, barring, of course, the PM, people had become so cynical about crime and corruption that they really did not bother as to which politician had his hand in the till.

It also mattered little that Manmohan Singh was easily the weakest prime minister that the country has had with no member of his government bothering about him while he did his own thing or openly lined his pockets with filthy lucre.

The ruling Congress’s mascot aam admi (common man), chanting whose mantra had surprised itself in the May 2004 election when it defeated the then Vajpayee-led NDA by a very thin margin, was now ready to teach it a lesson.

Groaning under the weight of ever-rising prices of essential items such as food and fuel, ordinary people had turned against the party.

Given that a vast majority of Indian voters are known to vote out a government rather than vote one in, the failure to arrest relentless inflation is the biggest headache of the Manmohan Singh regime.

In recent weeks, there has been up to 30% rise in the prices of essential goods.

Household budgets have gone haywire with prices of such lowly items as cooking oil, atta (wheat flour), rice, soaps and detergents, registering 15 to 30% increase in the last three months.

Coarse rice, atta, dal (pulses), vegetables and fruits have become so expensive that lower and middle-income households have to cut expenses for everything else in order to keep the kitchen fires burning.

On top of it, cooking gas has become costlier due to the rise in prices of crude oil.

In short, inflation has hit the ubiquitous aam admi rather hard and he is waiting to punish the UPA Government for his pain.

If the aam admi is hurt by inflation, there is a double whammy for the poor farmers who are unable to buy fertilisers in this sowing season due to faulty distribution and stringent supplies.

Indeed, in recent days there have been fertiliser riots in far-flung parts of the country from Karnataka and Andhra in the south to several parts of Maharashtra in the west.

Both in Karnataka and Andhra the police had to fire at protesting farmers who were destroying public property in anger at the denial of fertiliser at this crucial time when the monsoons had just set in.

Not unlike petroleum products, fertiliser too is subsidised by the Government.

Most fertiliser plants are old and inefficient but the state partially underwrites costs by issuing them deferred payment bonds.

Such is the crisis in the fertiliser industry that the amount of subsidy this year has shot up to over Rs 90,000 crores (RM70bil) from a little over Rs 30,000 crores (RM23bil) last year. Higher input costs coupled with the sharp spurt in fuel prices account for the three-fold jump in subsidies. Yet, there is not enough to go round.

Thanks to mounting subsidies, the bottom has been knocked out of the annual budget of the Government.

Finance Minister P. Chidam-baram is being accused of dressing up the budget in order to present a rosy picture while the actual numbers tell a rather depressing story.

This is because he did not take into account the rising bill of election-eve giveaways in the annual budget.

Another big charge on the nation’s budget is the sharp rise in the pay of central government employees as recommended by the Sixth Pay Commission.

With the economy slowing down due to global and local factors, the additional burdens have already pushed the fiscal deficit far above the 2.5% of the GDP as claimed in the budget.

In fact, fiscal deficit this year could be above 7% of GDP, especially since the Government is in no position to cap populist giveaways in the election year.

In other words, Chidambaram’s successor in the Finance Ministry will inherit an empty Treasury, a claim the glib-talking lawyer-turned-politician will contest but without much conviction.


About kchew

an occasional culturalist
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