Strike [email protected] 12,500 Cr; Govt Scouts For Friends

India formally opened its supermarket sector to foreign chains and eased foreign investment rules in airlines and broadcasters, a government statement said on 20 September, implementing a spate of reforms unveiled late last week aimed at reviving growth and staving off a credit rating downgrade. However, the ruling coalition's push to implement foreign direct investment in the supermarket sector and increase diesel prices to pare a bloated subsidy bill faces stiff political resistance.

 

Large parts of India where the Congress is not in power were hit by a strike against the government's recent decisions to hike diesel prices and foreign direct investment (FDI) in multi-brand retail on 20 September. Industry body, the Confederation of Indian Industries (CII) said the non-Congress sponsored Bharat bandh has been disruptive for business and trade and an estimated Rs 12,500 crore loss was incurred by the economy in terms of disruptions in production and trade. Mumbai and Delhi remained largely unaffected; Kolkata, Patna and Bangalore were completely shut down.

The main opposition Bharatiya Janata Party (BJP), joined by smaller parties from both the political left and right, called for the strike to protest against a 14 percent hike in heavily subsidised diesel prices, and a government decision that opens the door to foreign supermarket chains to invest in India.

Criticising the nationwide agitation, the government blamed the parties behind the protest for causing economic losses and made it clear that there will be no backtracking on the reforms as the country needs "massive" growth.

Commenting on the Bharat Bandh called by various political parties and formations, CII has said that the Government of India should not yield to political pressure on reforms. Good economics seldom makes for good politics and therefore, it is important to communicate to the masses the merit and necessity of the reform measures announced by the government.

Senior ministers maintained that there was no threat to the stability of the government even if Trinamool Congress quits on September 21 and hinted at scouting for new allies.

They insisted that the strike organised by eight non-UPA parties as well as NDA has had no impact except for causing economic losses.

"The net effect of this strike is greater economic loss. When you protest, you should not protest in a manner that causes economic losses," finance minister P Chidambaram said.

 

Information and broadcasting minister Ambika Soni said that while limited protest was alright, it should not be to an extent that "cause harm" to the interest of people.

Making it clear that government would not go back on FDI in retail decision, Law Minister Salman Khurshid said, "we have tried to bring reforms with a human face. Please don't ask whether we are going to change the human face. The human face remains."

He said the government was pushing reforms to give "massive" economic growth to the country and "if opposition slows down that, we won't get it by what they have done today."

On the strike, he said the parties have "given their point of view, they have shown their protest, now let us go back to our factories, get back to our shops, get back to our schools and get back to our work."

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On the stability aspect, Chidambaram said, "we have enough friends today, we had enough friends yesterday... so I don't see any reason why you should doubt our stability."

Meanwhile, Reiterating CII’s support for the decisions on fuel subsidy rationalisation and easing of FDI norms for select sectors, the industry body said that the people of India would benefit from this. The economic logic of this is clear, but it is often very difficult to translate this into popular logic which is easily comprehended by all. The CII release said that easy and comprehensible communication is as much a necessary exercise as are the announcements, which are made after detailed deliberations.

IT Hub Hit Hard
Bangalore, the IT and outsourcing hub, was hard hit by the strike, but in the financial capital Mumbai, banks and offices were open as usual. In New Delhi, shops were shut in BJP constituencies and there were fewer cars on the road but the central business district was untouched.

 

Across the country, morning commuters were left stranded at train stations and bus-stops as protesters squatted on railway tracks and laid siege to some bus depots. Supporters of the right-wing Hindu nationalist BJP and other opposition parties also blocked some roads with burning tyres.

"If we don't protest now, the central government will eliminate the poor and middle-class families," said Santi Barik as she protested in Bhubaneswar, Odisha.

Government offices, businesses, schools and banks in Bhubaneswar were shut, and similar shutdowns were reported in other cities, including Hyderabad, the IT hub in Andhra Pradesh that is home to local offices of Microsoft Corp and Google Inc. Police arrested dozens of opposition supporters who surrounded the biggest bus station in Andhra Pradesh.

In Bangalore, most of the 3,500 staff employed by Intel Corp and 10,000 staff at Cisco Systems Inc were asked to work from home, company spokesmen said. Infosys Ltd and Wipro Ltd gave workers the day off, but will ask them to work on Saturday instead.

Road and train services were also hit in several parts of Bihar. A group of BJP workers blocked rail traffic at Patna junction and stopped movement of a number of long distance express and passenger trains. Life in the Kolkata and elsewhere in West Bengal was disrupted due to the 12-hour bandh called by Left parties.
 
Though airport services were normal, train services in Eastern Railway and South Eastern Railway were disrupted, officials said. Howrah-Pune Duranto Express, which started from Howrah on time, was stopped by the squatters here, railway sources said. Services of the Metro rail, Kolkata's lifeline, were normal, officials said. Airport sources said the flight operations were normal in Kolkata airport, except cancellation of two Indigo flights - Kolkata-New Delhi and Kolkata-Agartala which were scheduled to fly in the morning.

The Congress party-ruled coalition, which has a record for buckling under pressure, partially rolled backed a petrol price increase earlier this year after facing a similar strike. Some Congress officials have hinted the new 5 rupee per litre diesel price hike could be cut, and a new limit on subsidised cooking gas cylinders may also be raised. But they have held firm against calls for the retail reform to be scrapped.

Mulayam Keeps Cards Close To His Chest
With Trinamool Congress all set to break its ties with the UPA by withdrawing its ministers and the support on 21 September, the government remained unfazed over its stability even as outside ally Mulayam Singh Yadav sent mixed signals. To remain in power, the UPA needs Mulayam Singh Yadav, whose external support props up the government at the centre.  Today, he was at the heart of the protests against the UPA in Delhi.  Courting arrest along with leaders from Left and other parties, Yadav demanded that the government withdraw immediately "anti-people" decisions like hike in diesel price, FDI in retail sector and cap on LPG cylinders. Samajwadi party with 22 MPs in the Lok Sabha is an outside supporter of UPA.

Mulayam said he is determined not to let the opposition BJP gain from the current political crisis- we are against communal forces, he said, but he also warned the government that unless it withdraws its reforms, he will mobilize larger protests.

The BJP and its ally, Sharad Yadav, were quick to assert that the government's decision to open up the retail sector to foreign super-chains has provided a common cause to the Left, the right and Mulayam Singh. He was quick to distance himself from that claim. "I am supporting the government to stop communal forces. BJP se hamara koi vaasta nahi hai (We have no relationship with the BJP)." 


(With inputs from agencies)