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Mamata acts saviour, but prices rise in Bengal

Last updated on: September 24, 2012 12:39 IST

Mamata acts saviour, but prices rise in Bengal

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Ishita Ayan Dutta

Isolated and un-consulted at the Centre, Mamata Banerjee was determined to, as she said, "bell the cat" over the Centre's move to raise diesel prices, reduce subsidies on LPG cylinders, apart from approving foreign direct investment in multi-brand retail.

But back home, in the past 17 months, the Ma, Mati, Manush government has felt little compulsion about succumbing to the need to raise prices on quite a few occasions, and it has often chosen ingenious ways to go about it.

In August, for instance, the minimum state-run bus fare in Bengal went from Rs 4.50 to Rs 5, apparently for want of 50 paise coins.

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Image: Mamata Banerjee.
Photographs: Rupak De Chowdhuri/Reuters

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Yet, a month prior to that Banerjee took to the streets to protest against an oil price calibration by the central government-owned oil companies that translated into a 70-paise rise in petrol prices in Bengal.

Meanwhile, in the heat of the current protests over diesel prices, a part of Bengal is frozen in time. Private bus operators have stayed off the roads for three days this week in protest.

Taxis and three-wheelers, too, have intermittently gone on strike in the past year and a half, on the same ground.

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Image: Kolkata.
Photographs: Courtesy, Kolkata Tourism.

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Power tariffs are yet another example of Banerjee's double standards.

Tariffs by both private companies and state utilities has been raised four times over a year, a cumulative increase of 37 per cent, under the garb of a variable fuel cost, essentially a method to pass on the coal price increase.

Milk is costlier by Rs 6 a litre because the low-cost variety has been substituted by high-cost fortified milk.

Banerjee is also not averse to exercising some ingenuity to maintain her brand with the common man. Country liquor is a case in point.

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Image: Eight-year-old Rupa performs on a tightrope at a roadside in Kolkata.
Photographs: Reuters.
Tags: , Mamata , Bengal , Banerjee

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The government allows the sale of the poor man's liquor through regulated shops across the state with the twin purpose of increasing revenue and keeping illicit hooch at bay.

In this year's Budget, Finance Minister Amit Mitra resorted to a unique solution to raise revenues. He imposed an ad valorem duty on the maximum retail price (MRP).

No problem there, except that unlike any other business neither the producers nor the retailers have the liberty to raise prices without approval from the state, though technically the excise department has allowed producers to fix prices.

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Image: A labourer carries pots of palm juice to prepare jaggery, a form of candy, at a roadside factory in Bagnan, Kolkata.
Photographs: Parth Sanyal/Reuters.

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In effect, then, producers and retailers have to pay the state exchequer more but can't pass on the higher tax to the consumer.

Some nifty work was visible even in the Railway ministry when it was headed by Trinamool's Dinesh Trivedi. Ahead of the increase in passenger fares that prompted his party boss Banerjee to sack him, the Railways increased freight rate across the board to garner Rs 15,000 crore to Rs 20,000 crore.

For someone who is hyper-sensitive to price rises by any central entity, Banerjee was curiously silent on freight - even though the impact on the common man she so venerates would have been as burdensome as the current rise in diesel prices.

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Image: A petrol pump in Kolkata.
Photographs: Reuters.

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Bizarre decisions like the one on country liquor stem from an urgent need to shore up revenues for a state that faces a debt mountain of more than Rs 2 lakh crore - and to finance Banerjee's unrelenting populism.

Earlier in the year, the chief minister announced a monthly honorarium of Rs 2,500 for the 30,000-plus imams.

Bengal has a Muslim population of 27 per cent, and Banerjee has gone all out to win that vote bank from the Left; whether it is sporting a headscarf, or saying Insh'Allah in the same breath as Jai Hind at the end of every speech or getting her ministers to resign from the Centre on Friday ("after Jumu'ah prayers"). Banerjee has an eye for detail, while the bigger things can take a hike.

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Image: A hand rickshaw puller rests on a pavement in Kolkata.
Photographs: Jayanta Shaw/Reuters.

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But Bengal is paying the price in every possible way.

The government's now-famous land policy of having the state steer clear of acquiring land for industrial projects has left Bengal high and dry for investment. There's an endless list of projects that have been in limbo - from Bhushan Steel, L&T and NTPC, to name a few.

So, the scope for generating revenue has narrowed even more, compelling Banerjee to knock on the Centre's doors for a bailout package. Well, till recently.

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Image: Tata's factory at Singur.
Photographs: Reuters.

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But with the alliance at the Centre gone, what becomes of a cash-strapped state with no investment?

Banerjee may have just overlooked that scenario; she appears to have chosen too large a belled collar, thereby offering a chance for the cat to wriggle through.

A mesmeric popularity may have blinkered her and Trinamool Congress will probably reap the benefits of taking up a people's issue in the upcoming panchayat elections. But Bengal will be left to count the cost of populism.

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Image: Vendors selling fruits and clothes wait for customers at their stalls under a parked truck, on a roadside in Kolkata.
Photographs: Reuters.

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