Business Standard / New Delhi Jul 06, 2010, 00:42 IST
Monday’s call for an all-India bandh by the Left Front and the National Democratic Alliance symbolises the desperate attempt of the Left and the Right to join forces against the Centre. The communists are worried about their political survival in Kerala and West Bengal and the Bharatiya Janata Party (BJP) is keen to end its “untouchability”, what it perceives as a “secular apartheid”. That is why, for instance, the BJP leadership is trying to pick secular issues — price rise, nuclear liability Bill, women’s reservation Bill, oil sector decontrol, etc. — so that it can offer the Left an opportunity to come closer. Monday’s “Bharat Bandh” has to be seen in this light, more than in any other way. The Congress party, for its part, will hope to be able to rake up some communal issue and hope that its secularism-in-danger call will ensure the BJP remains isolated. The behaviour of other parties also makes interesting reading in this context — Uttar Pradesh Chief Minister Mayawati, for instance, has made it clear that she plans to use all means at her disposal to foil the bandh. Which means that despite some second thoughts by sections of the ruling coalition on amnesty for her on income tax cases, Ms Mayawati is not willing to take a chance on her erstwhile allies.
Beyond the political, however, the case against bandhs seems quite open and shut. There is the issue of subsidies for instance. As the government has been at pains to emphasise, even after the price hike, a subsidy of a whopping Rs 53,000 crore will still be borne by the government and the oil sector PSUs. This includes around Rs 18 per litre on kerosene (kerosene costs around Rs 30 per litre to produce at current crude oil prices) and another Rs 180-190 per cylinder of domestic cooking gas (at current oil prices, each cylinder should be priced at Rs 535). More important, as the Kirit Parikh report points out, this subsidy will go up significantly as crude oil prices keep rising. At $100 a barrel, Parikh estimates diesel prices should be around Rs 7-8 more per litre than they are right now. Assuming the government were to prevent oil PSUs from raising prices, the 52 million tonnes of diesel we consume at the moment would require an additional subsidy of Rs 39,000 crore. In the case of petrol, a similar price hike would be required, so at 11.3 million tonnes of petrol consumption, that’s an additional Rs 8,500 crore or so. Whether you add this to the fiscal deficit or to the losses of the oil sector PSUs, the impact is a serious one — in the case of the oil sector PSUs, it even seriously affects their ability to invest in order to remain competitive. This apart, there is the invariable high cost associated with disturbing business activity and the uncertainty that ensures India remains low on the global scale of being a reliable supply base. Ironically, courts in the country have declared bandhs illegal, yet few governments are willing to use adequate force to prevent bandhs from being successful.
Indeed,a bandh as ever, is merely a political show for all the political parties at the cost of the common man out there in the street whose cause is being championed by every one so vociferously these days.Yet,these very political parties don't debate such issues in the house much to the convenience of the ruling parties.The daily bread earner must have gone home empty handed to his family with nothing to offer for the evening meal
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