Monday, 4 June 2012

Energy and protest politics: insiders and outsiders

Continuing the discussion on the politics of protest from the last week's post on the rise in petrol prices in India, this time we take a look at the actors who are not a part of the central government regime. so, while last week we talked about the protest politics of the regime participants or the coalition partners, this time we take a look at the opposition.
While, it is a rare site to see most of India's political parties unite on a single issue, it happened this time on the issue of petrol price rise. The opposition parties united in their criticism for the government. However, several commentators have questioned the seriousness of the opposition parties. Indeed protesting against the government's actions is somewhat of a reflex action for the opposition parties. It was pointed out that, BJP (India's principal opposition party) itself raised the fuel prices about 30 times during its 5 years in power. The BJP however has argued that, it followed the global crude prices (an argument that the government has made for the current hike). Also, a critical and probably valid argument made by the BJP is that of slow and subsequent price rise. This saved the consumers from a sudden burden and gave them a chance to adjust their budgets. The sudden and steep price hike of Rs 7.50 has been argued to have broken the budget of several middle class households.
Communist parties protest against price rise in 2010

However, this aggressive stance by the outsiders of the central regime has a flip side when the play the role of the insiders in some state regimes. The price of petrol is split into the price of crude, its processing into petrol and taxes by central and state governments. These taxes form about 40% of the petrol prices. These taxes include customs duty, excise duty, special excise duty, education cess, sales tax and state cess. A critical component of these taxes, the state taxes are obviously under state control and they can be tweaked to bring some relief to the consumers. This is where the burden of being an insider creeps up on actors like the BJP who are outsiders in the central regime. It has been pointed out that the BJP ruled states have some of the highest state taxes on petrol and they should also share some burden insted of putting the blame squarely on the central regime. Although, BJP government in Goa has taken the lead and cut almost the entire tax on petrol thus making it cheaper by about Rs 11. So, why can't this be emulated by the other states. It has been emulated, partially, by some other states like Kerala and Uttrakhand but probably because they are Congress ruled states (they must be aligned to the rules dictated by the central government as both regimes are formed by the same political party). Other BJP ruled states have not taken this step as petrol price rise it an important issue for their political gameplay at the centre. However, it must also be understood that India is not a big alcohol or cigarette consumer and hence doesn't gain much tax revenue from these sources (for several western countries, this is a major income source). Hence, petrol is the only avenue from which they can earn big chunks of revenue for development works (where is money ends up is a whole different issue). So, reducing states are finding it very difficult to reduce taxes.

All said and done, this insider-outsides position of some of the political actors is giving them options to act differently at different regime levels. They oppose at the central regime level as they are not part (outsiders) of the regime. They have power to act at the state regime level (insiders) but do not do so and continue to put all the blame on the central regime. This complex situation confuses the people and makes interventions difficult; an ideal environment to continue the politics of protest.

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