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The government HAD to increase the price of diesel; it could not have allowed the Indian economy to commit suicide, a former senior official tells Sheela Bhatt
The news about an increase of Rs 5 per litre in the price of diesel was dropped like a bomb on the common man, the media and political parties by the United Progressive Alliance government on Thursday night.
Reacting strongly to the hike, Communist Party of India Marxist leader Brinda Karat said that the government "doesn't care for the poor people".
Communist Party of India leader Gururdas Dasgupta said, "I have never seen such an insensitive government since 1984."
Bharatiya Janata Party leaders, while opposing the price rise, are smirking and waiting for allies of the Congress to explode.
Already, Trinamool Congress leader Mamata Banerjee, whose party is one of the key constituents of the UPA, has said that she is "shocked" by the hike in fuel prices.
In this jugglery over price rise -- the most sensitive political issue in India -- a retired Cabinet secretary and a very powerful person (even after his retirement) with an impressive network of international connections spoke to rediff.com about the hike in the price of diesel.
In fact, when asked whether this price rise will affect poor people, he could not contain his anger against such arguments. He blasted the logic that the hike in the price of diesel will have a cascading effect on inflation and eventually impact the Congress's political fortunes.
Here is his take on the Rs 5/litre hike in the price of diesel:
"This government had NO option but to hike the price of diesel. It was already too late. The UPA government delayed it by one year and there was no room to delay it for even one more day. It is disgusting to see the way the media is crooning to the reactions from opposition leaders over the price rise. How uneducated the television anchors are! Do they know the basic principle of the economy?
"Should this government allow the Indian economy to commit suicide by November 2012?
"There was no choice before (Congress president and UPA chairperson) Sonia Gandhi when the core group met to decide about a hike in diesel price. Why don't you understand that it was a choice between the devil and the deep sea? If the government had not increased the price of diesel, then the value of the rupee would have dwindled.
"By November, a dollar would have cost Rs 100! And an unprecedented exodus of foreign investment would have taken place. Can you kill your own currency? If (senior BJP leader) Arun Jaitley tells you that the government could have reduced taxes instead of hiking the fuel price, then let me say emphatically that HE IS WRONG!
"If you reduce taxes any more, then the fiscal deficit will go up. Agreed that it is not at all an easy decision for a political party to hike the price of diesel, but let me tell you that lots of rubbish is going around on this issue and we must start thinking as Indians.
"This government, which has been drifting since long, has risen up in my esteem. Sonia Gandhi and Prime Minister Manmohan Singh have taken the decision to save the Indian economy. They have not thought about the party but have thought about India. How can you allow the economy to deteriorate to zero growth? I don't want India to lose; let the Congress lose the election. I don't care.
"Don't give me the nonsense argument that 'inflation will increase'. You will have to live with inflation. Inflation is anytime better than zero growth. If the country's economy doesn't witness growth, young people will turn towards crime. In just three years, it will be impossible to live in our own houses. Unemployed youth will take the law into their own hands.
"The situation was grave. It was like that of a family facing the prospect of a child's kidnap and payment of ransom. When one's child is kidnapped, one has the option of either paying the ransom or calling the police. Vakt firauti maang raha tha! (The Time was asking for its due). The UPA has paid the ransom to save the kidnapped economy.
"Since long, we had been watching helplessly. Koi to leadership dikhaye kambakt! (Wish someone would display some leadership qualities) We knew that if a few steps are not taken, more than $100 billion would have gone out of the economy.
"All these economic truths will not penetrate the brains of Indian media personnel.
"Excuse me, don't ask me any more questions about this issue. My blood pressure goes up every time I see nonsensical reactions about fuel price hike. I better watch an old Hindi film on television and keep my cool. Sorry, your arguments will not impact me. I won't change my views. There was no other option before the government but to hike the fuel price. Understood?"