New Delhi, March 11: Rollback Sinha has morphed into Rollback Singh — and the moniker rolls on.
No finance minister — and there have been only two — in the Vajpayee-led government has been able to live down the epithet that seems to come with the job.
In the years since liberalisation, fertiliser prices have left a bitter taste in the mouths of finance ministers. Manmohan Singh is no exception. He, too, had to roll back.
Jaswant Singh should have known better than to proclaim that he would not roll back the increase in the price of fertilisers he had proposed in the budget. That is exactly what he had to do today, succumbing to pressure from his own party and NDA partners.
The rollback label was first pinned on Yashwant Sinha’s lapels in 1998 after he was also forced to scrap a one-rupee increase in the price of urea.
Singh today cut back a price hike of Rs 12 on a 50-kg bag of urea (or 24 paise per kg), and Rs 10 on a 50-kg bag of other chemical fertilisers. The rollback means a Rs 700-crore revenue loss.
However, Singh refused to capitulate to the growing demand from allies and the Opposition for a rollback of the cess in the budget that saw a Rs 1.50 spurt in the prices of petrol and diesel.
“I spoke to the Prime Minister today morning and told him that I was being called rigid, an iconoclast and various other things over my stand on a very justifiable increase in fertiliser prices, ... he asked me to reconsider ... (so) if members do not want a price hike, then so it will be,” Singh told Parliament after a half-hour defence of his proposal to increase fertiliser prices.
The revision was made to cut the subsidy bill of Rs 12,700 crore.
“The decision of the finance minister to withdraw the increase in the price of urea and di-ammonium phosphate is welcome. This is a farmer-friendly decision and is particularly important in the background of the problems faced by them on account of serious natural calamities,” said BJP president M. Venkaiah Naidu.
Naidu had gone public with his demand for a rollback on the day the budget was presented.
The finance minister also announced a cut in the interest rate on Central loans to states to 9.5 per cent from a current 11 per cent. The interest rate on loans given to Central employees to buy houses, computers and vehicles is also being cut by one per cent.
Singh told Parliament this morning’s conversation with A.B. Vajpayee had swung the decision in favour of a rollback, but he indicated that he was unhappy in conceding the demand.
“Aap apne brahma se poochhiye (You ask your conscience),” the Prime Minister told him, Jaswant disclosed to peals of laughter.
He said the total subsidy bill had ballooned to Rs 50,000 crore. Food subsidies cost the highest at Rs 28,000 crore and petroleum Rs 9,000-10,000 crore, the component that has been coming down with prices being increasingly brought in line with the market.
The rollback decision was taken to keep allies like the BSP, Telugu Desam, Akalis and the Shiv Sena and party members from north Indian states happy in an election year.
The issue had turned into a source of political tension in the wheat belt.