Red signal for Didi

Mamata Banerjee's strident assertion on Monday that there would be no increase in rail passenger fares or freight rates, despite the recen...

Mamata Banerjee8217;s strident assertion on Monday that there would be no increase in rail passenger fares or freight rates, despite the recent hike in diesel prices, is not just a prelude to another populist railway budget in the future. It is also a reminder of an unresolved issue from the recent past.

Only days ago, Banerjee had resigned from the Union cabinet on the issue of hike in the prices of petroleum products; she withdrew her resignation after the prime minister8217;s assurance that the matter would be settled after his knee operation. Despite the calm since, there is no evidence that the Trinamool chief has abandoned her demand for a rollback. Meanwhile, reports from Mumbai have brought the glad tidings that the prime minister has walked up and down the corridor of the seventh floor of the Mumbai hospital with the help of a walker for almost 15 minutes. Surely the moment is not far when Vajpayee must take a decision on the vexed Mamata issue.

But perhaps the issue is not really as vexed for the NDA as it had earlier threatened to be the scales have quite discernibly tilted in its favour since. When Mamata withdrew from the government, the NDA seemed to be in mortal danger of losing an ally on which it hopes to ride piggyback into Writers Building in Calcutta come assembly elections to West Bengal early next year. Mamata, on the other hand, seemed poised in a win-win situation.

She would gain if the government caved in to her blackmail. But even if it did not, and she broke away from the NDA on the price-hike issue, her pro-poor credentials would acquire a well-timed sheen. An alliance with a willing Congress may have taken care of the rest in the run-up to the elections in her state. Mamata8217;s climbdown till after the prime minister8217;s knee operation has, however, changed this scenario. While it gave valuable time to the NDA8217;s firefighters, Mamata8217;s stand has lost its crucial edge.

Now, even if the Vajpayee government accedes to a token cut in prices of petroleum products, it will be seen only as a belated face saver for a troublesome ally. On her part, Banerjee has little choice but to accept what she gets. It would be considerably more difficult to up the ante on the same issue the second time round; the moment to emerge as the messiah of the poor has passed.

The Vajpayee government will undoubtedly keep this in mind as it takes its decision on whether to roll back or not and if yes, how much. It would also do well to take other considerations into account. According to Petroleum Minister Ram Naik8217;s own admission, India8217;s oil import bill for the current fiscal year is projected to soar to a whopping Rs 81,000 crore. This represents a 51 per cent increase over the Rs 53,500 crore that was spent on oil imports during the last financial year. International prices have gone up further since the Centre hiked domestic oil prices and with the West Asia crisis showing little signs of abating, the situation is only likely to worsen. Even as the government handles the pulls and tugs of short-sighted coalition partners within its ranks, it cannot afford to lose sight of the fact that there is a crisis out there which will not go away.