The Congress leadership took the politically tough decision to hike kerosene prices after it made a determined effort to get dissenting UPA allies on board in one way or the other. Both Congress President Sonia Gandhi and finance minister Pranab Mukherjee played a big part behind the scenes to persuade allies not to actively block the move to raise fuel prices across the board. Of course, some allies have not given unqualified support to the oil price hike, though the UPA seems confident that they will not rock the boat.
The chief architect of what seems to be a skewed consensus in the Cabinet over difficult economic decisions, is finance minister Pranab Mukherjee. Top sources in the government confirm that he had been mandated by both Prime Minister Manmohan Singh and Congress president Sonia Gandhi to speak to allies who appeared to have objections to UPA?s economic decisions.
As Mamata Banerjee put it in her press conference in New Delhi, ?since I did not attend the eGoM, I am not party to the decision. But I have only 19 MPs out of 272, and cannot alter the course of the government.? A way out for allies to score their political point while allowing the government to do what it wants has been found.
Congress had to face opposition from not just Banerjee and DMK?s MK Alagiri, but also NCP?s agriculture minister Sharad Pawar. After the last EGoM on fuel prices which remained inconclusive, Mukherjee flew down to Mumbai, ostensibly for a meeting with bankers, but also took time out visit Pawar who was admitted to a hospital. There, the two spoke and Pawar was convinced of the rationale behind the hike. Significantly, sources say, Pawar told Mukherjee that while the hike fuel prices would get his support, he was in favour of more ?ethanol blending? to change the fuel basket make-up.
The way Mukherjee convinced Mamata Banerjee and MK Alagiri was a lesson in realpolitik. Following local eelctions in West Bengal, Mukherjee found the going a little easier. Despite Trinamool?s good performance, the fineprint revealed that in as many as 28 municipal bodies in the state, the Trinamool needed the Congress to come to power, and had got less than 50% of total seats 294 assembly seats if one extrapolated the local body results onto Assembly seats. ?This weighed rather heavily with Mamata Banerjee. When Mukherjee met her last night with the worsening financials of oil marketing companies, he found a more pliable Mamata Banerjee,? said a source. He also assured her that food prices would come down following a good monsoon and harvest.
In Tamil Nadu too, the Congress managed to convey its importance to its ally DMK for it to run its state government. Alagiri too needed no more convincing. While Pawar and Alagiri attended the meeting, Banerjee stayed away, and thereby allowed the decision to be taken.
In any case, Banerjee has only used an old tactic of hers. She has opposed disinvestment of all profitable public sector undertakings. Yet, the Cabinet Committee on Economic Affairs ? of which she is a member ? cleared the disinvestment of Coal India and Hindustan Copper, while Banerjee absented herself from the meeting.
Looking at this trend, therefore, the government?s wish list for disinvestment, including that of Manganese Ore India, Steel Authority of India, Metals and Minerals Corporation, Power Grid Corporation and Shipping Corporation of India does not appear so unattainable after all.