Trinamool Congress (TMC) chief and West Bengal Chief Minister Mamata Banerjee's displeasure over the recent increase in petrol prices and her threat to the Congress-led United Progressive Alliance (UPA) Government that it was the Centre that needed her party's support seems to have forced the Union Government to have a rethink over the hike.
"TMC will not remain in UPA government if prices of petro products are hiked again," Banerjee said today, adding that they do not want to blackmail the UPA government.
Union Finance Minister Pranab Mukherjee, who is also the chief troubleshooter for the Congress party, had met Banerjee on Monday for over an hour to negotiate a financial package for the state in a bid to placate her even as the West Bengal Chief Minister once again threatened to quit the UPA.
"If prices of essential commodities go up then the Trinamool will not stay with the UPA. The Prime Minister has told my MPs that there will be no rollback in petrol prices. It is a coalition. They cannot take decisions unilaterally. If they want other parties in the alliance instead of us then we will move away," said Mamata after the meeting. She stopped after speaking a few lines and walked off.
The meeting between Pranab Mukherjee and Mamata Banerjee was held in Kolkata while members of the Trinamool Congress met Prime Minister Manmohan Singh in New Delhi to discuss the latest hike in petrol prices. But the TMC MPs did not raise the issue of quitting the alliance at their meeting with the Prime Minister.
Mamata is reported to be very upset with the ways the Congress has been treating her party and the demand for a financial package for the state.
She wanted Rs 21,600 crore as a package but the Finance Minister, in charge of the nation's purse strings, said that he cannot allot more than Rs 9,000 crore. But the Prime Minister could increase the amount to placate the Trinamool Chief.
Meanwhile, in New Delhi Union Minister of State for Health and Trinamool MP Sudip Bandopadhyay said that he expressed his party's concern over petrol price hike to the Prime Minister.
"We have expressed our concerns over the price hike of petrol. We have submitted our resolution to the Prime Minister. We will report the details to Mamata Banerjee. The Prime Minister agreed that meeting wih allies should be on a regular basis. We have told the Prime Minister that there is huge lack of coordination between allies in UPA-2. He agreed with our sentiments and said that he shared our views on economic conditions of the country," said Bandopadhyay.
Sources have told CNN-IBN that the Prime Minister explained the economic compulsions for the hike in petrol prices. When TMC MPs told the Prime Minister that they had heard that diesel and LPG prices were also to be hiked, Manmohan Singh told them that it was news to him. He told them that there would be no increase in the prices of kerosene, diesel and LPG.
According to the sources the Prime Minister requested the TMC MPs not to act in haste.
According to sources, the UPA government might be forced to concede a partial rollback on the prices after the threat by the West Bengal chief minister to withdraw support.
The government is likely to cut the central excise duty on petrol products.
Another option, the one that the Congress party favours, is to from a UPA Coordination Committee along the lines of the Left-Coordination Committee that existed during UPA-1.
Option three is that the Centre can slash some taxes on petrol, which could slightly reduce the impact of the latest hike.
But Congress sources point out that 7 per cent of the Centre's tax earning from petrol is passed off to West Bengal anyway and the state earns Rs 15.13 per litre from cess and sales tax. So it is the West Bengal government that could reduce taxes instead of the Centre.
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