Reference Auto

So, Mamata Banerjee has set the cat among the pigeons by her withdrawal from the UPA government, which has finally woken up from its slumber and is mulling a slew of people-centric moves to negate the diesel price rise and LPG rationing, which have not found any takers.

The Congress-led UPA government has probably raised prices like no other government, affecting the common man like never before.

For instance, a comparison of petrol and diesel prices will show how the prices have been spiraling out of control.

Around mid 2008, the prices of petrol and diesel were around Rs 50 and Rs 35. And today, the price of petrol has soared to Rs 76 and diesel to Rs 50, which is almost a 50 per cent rise.

With the Central government raising diesel prices sharply and restricting subsidy on the number of LPG cylinders to six a year (that is, six LPG cylinders a year would be available at a subsidized rate of Rs 400 and the remaining would have to be brought at market price, which is almost Rs 800 now), Mamata has rightly pointed out that the only thing that people can do with their gas cylinders is “make tea.”

Diesel price rise would have a spiraling effect, which would raise the prices of all essential items sharply.

The UPA government has been digging its own grave by coming up with or creating “a bubble” in prices of not only essential items but everything else.

Prices of fuel have been spiraling, prices of real estate saw an artificial jump (thanks to the politician-builder nexus) and eating vegetables, fish and meat is slowly turning out to be a luxury. All these have made the public ballistic towards the Central government.

Added to these are the string of scandals - the Spectrum scam and the recent Coalgate, among others, which have cost the exchequer almost Rs 3 lakh crore, enough to feed the country’s poor for nearly five years.

Now, the government may hang on to power with the help of Mulayam Singh Yadav and Lalu Prasad, who are bound to demand their pound of flesh and even turn out to be an impediment for development, thus putting the country in a vicious circle of slowdown.

But the UPA has been doing some good work also by trying to bring in foreign direct investment or FDI in retail.

Although FDI may take a toll on small shopkeepers initially, it would give a big boost to the storage infrastructure in the country by making the entire storage system, for say vegetables, hi-tech, thereby creating mammoth job opportunities for the youth.

The end result would be not only the availability of fresh vegetables but they will also come at fair prices as the new distribution infrastructure is slated to wipe out middlemen from the scene (which politicians don’t want).

However, parties opposing this have shown FDI as a monster even before the UPA could tell people that the pros would overshadow the cons.

Now, the UPA is planning a slew of people-centric moves by raising the tax slab of the salaried to over Rs 2 lakh (annual) and telling Congress governments in states to lower taxes on diesel to negate the price rise impact but these may not be enough to give credibility to the UPA government at the Centre, as it is already neck-deep in trouble.