UPA counts on RIL poll funds, says Dasgupta

Gurudas Dasgupta  

CPI leader Gurudas Dasgupta on Thursday criticised the UPA government for accepting the Rangarajan Committee recommendation on natural gas price hike with a view to keeping Reliance Industries Limited in “good humour.”

(Petroleum Minister M. Veerappa Moily has since announced that no such price — $8.4 mbtu — had been fixed or approved by the Cabinet Committee on Economic Affairs. He said the price levels under the Rangarajan formula in April 2014 would be applicable to domestically produced gas.)

The MP alleged that the Manmohan Singh-led dispensation was looking at funds from RIL for election expenditure and hence, was not acting against the company in spite of several violations in the contract agreement. “Elections are in the offing and RIL is the biggest political investor. Several other parties too are maintaining silence on the issue for this precise reason.” Mr. Dasgupta ridiculed the Finance Ministry’s contention that RIL would receive the present rate ($4.2 per mbtu) until after the shortfall in production the company had assured was bridged. Finance Minister P. Chidambaram was trying to distance himself from the Cabinet’s decision as he had to contest the next election from Tamil Nadu, one of the States which would be worst hit by the abnormal hike in natural gas price. “Why didn’t Mr. Chidambaram oppose it when the issue came up in the Cabinet? He has made the statement only following the uproar in the State.”

The CPI leader said the government had surrendered to RIL’s “arm-twisting tactics” as was evident from the fact that the corporate, which had met the stipulated production levels in the first year, recorded a drop in the past three years.

The government’s decision to allow hike in gas prices would result in a cascading effect on all sections and it was nothing short of “national betrayal.” “Prime Minister Manmohan Singh, Finance Minister P. Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia are pauperising the country. The economic crisis arose due to overdependence on foreign investments.”

The government’s intentions were exposed when it did not consider production costs, international prices and automatic benefit accruing to RIL through fluctuation in exchange rates. “In the first place, why is the company being paid in dollars when [the price of] coal and petroleum products is calculated on rupee basis?” Mr. Dasgupta asked.

CPI(M) Polit Bureau member B.V. Raghavulu alleged that the flawed price fixation mechanism would mean windfall gains to RIL. The Rangarajan panel “fixed the prices based on the international scenario. Will the same yardstick be applied to fixing wages of workers?”

The hike in natural gas price to $ 8.4 per mbtu would mean a Rs.16,000-crore rise in fertilizer prices and Rs. 43,000 crore on account of power.

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Printable version | Jan 28, 2022 7:44:40 PM |

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