Vajpayee left Jaswant with little choice

Till Tuesday morning, when Finance Minister Jaswant Singh met Prime Minister Atal Bihari Vajpayee, all the indications were that he had no intention of restoring the fertiliser subsidy.

Although he was to reply extempore in the Budget debate, his notes had no reference to the fertiliser subsidy issue, except explaining the economics of naphtha prices.

But the conversation with the prime minister made him pause. "Main aapke gyan aur vivek par poora mamla chhod deta hoon (I leave the matter to your judgment and wisdom)," Vajpayee is reported to have told Singh.

The prime minister's remarks came after BJP general secretary Vijay Kumar Malhotra called on the finance minister late Monday evening.

After polite preliminaries, Malhotra came straight to the point: "I understand you've made up your mind not to address the issue of the fertiliser subsidy," he is reported to have remarked.

Singh was put on the defensive. "Who am I to be stubborn. Tell me what the Big Two have decided and I will do it," he reportedly replied.

"Then please restore the fertiliser subsidy. This is a political issue. It will harm us enormously if it is not done," Malhotra pleaded.

Not one to need his I's dotted and T's crossed for him, Singh took the hint. The fertiliser subsidy was restored in his reply to the discussion on the Budget.

Singh made it clear that it was because of the exhortation of the prime minister that he was restoring the subsidy. But in doing so he went the way of all the finance ministers who tried to cut fertiliser subsidy.

Manmohan Singh tried to do it and when he was forced to effect a rollback, handed in his resignation. He took back both the resignation and the subsidy.

P Chidambaram was realistic enough not to attempt any such thing.

Yashwant Sinha became famous as the 'King of Rollbacks' because the fertiliser subsidy was one in a series of steps he tried to take but had to roll back because of political pressure.

BJP sources acknowledge that it will be impossible for the party to face the Rajasthan Assembly elections after lifting the fertiliser subsidy.

"How will you counter the argument that you're making cars and air-conditioners cheaper but fertilisers costlier? Is this what the BJP stands for?" a BJP minister said.

A whole gang of mostly BJP leaders -- the allies have said virtually nothing on the fertiliser subsidy except Food Minister Sharad Yadav -- have been agitating that removing the subsidy on fertilisers is not a good idea.

The Congress has been pointedly silent on the issue.

"The rollback is not good for an economy because this government has bungled its finances so badly that it needs even the Rs 700 crore (Rs 7 billion) that he (the finance minister) will get from the rollback. But it is a question of succumbing to pressure. If the government can't withstand this much pressure, what can we do," said Pranab Mukherjee, a former finance minister himself.

A resolution passed by the Rashtriya Swayamsevak Sangh on agriculture referred to the fertiliser prices indirectly by demanding that farm inputs be reduced. Singh, therefore, succumbed to pressure from his own party.