| Jaswant: Give-and-take policy
New Delhi, March 10: The BJP-led government has directed finance minister Jaswant Singh to announce fresh sops for farmers tomorrow in Parliament. However, he will hold on to his stance against a rollback in urea prices, which were raised this budget.
The finance minister might announce a direct subsidy package for small and marginal farmers to buy fertilisers or other farm units or even raise the drought relief to farmers who sell their grain to the Food Corporation of India (FCI).
FCI’s purchase price is the benchmark against which Indian grain markets determine rice and wheat prices. This is expected to reduce the ‘anti-farmer’ stigma attached to the government. The ‘anti-farmer’ label could hit the government and its allies badly in states like Uttar Pradesh, Punjab, Haryana and Andhra where urea consumption is high.
The Akali Dal, Telugu Desam and the Mayawati government have been pressing the government to relent and even partially roll back the price increase so that their rural vote bases do not revolt. Singh’s proposal to raise urea prices by Rs 12.50 raise for a 40-kilo bag and oil cess of 50 paise a litre had given rise to a chorus for a rollback by these parties and the Congress-led Opposition.
The final decision on the issue was taken after a meeting between Prime Minister Atal Bihari Vajpayee and Singh over the weekend. The two decided that a rollback would be “politically more disastrous” than the hikes themselves.
Though the fertiliser price rise had been announced with the Prime Minister’s approval, Singh nevertheless needed to get a final nod from him against the rollback as both the BJP and the RSS had joined the NDA allies and the Opposition in demanding one. And the issue had turned into a major political battle where even the BJP party leadership was criticising the government.
Singh is believed to have pointed out that rollbacks by his predecessor were later attacked as signs of weakness and ridiculed by the very people who had demanded it and the government could not afford to look ridiculous year after year.
The urea price rise does not really affect BJP in the states where it faces polls this winter — Madhya Pradesh, Chattisgarh, Rajasthan and Delhi. Urea is used mostly by large farms where there is dependable irrigation facilities. While farmers in Delhi do use urea in a big way, they make up a small fraction of the Capital's voters and are mostly traditional Congress voters. This too obviously was factored into the policy making.
Besides, Singh pointed out at his meeting with the Prime Minister that without this ‘mild’ hike it would be tougher to balance his books and a beginning had to be made even if it meant some immediate unpopularity.