Modi in damage control mode after reverses

India’s Election Commission held by-elections in three Lok Sabha constituencies and 26 Assembly constituencies in a dozen states last month. Prime Minister Narendra Modi’s Bharatiya Janata Party suffered defeat in two Lok Sabha and 14 Assembly constituencies.

Since half the country’s states figured in the by-election calendar, the BJP cannot dismiss the results as a flash in the pan. It has reasons to worry.

Some of the states where the BJP lost seats are under its own rule. And in some of them, Assembly elections are due next year.

In a swift reaction to the by-election reverses, Modi made a small cut in the special excise duty the Centre levies on petrol and diesel with a view to lowering their prices which have been rising for years and are now above Rs 100 ($1.35) per litre in most cities.

When he was the Chief Minister of Gujarat, Modi had posted many tweets blaming the Congress-led United Progressive Alliance government for rising fuel

prices. A 2012 tweet read:

“Massive hike in #petrol prices is a prime example of the failure of Congress-led UPA.”

Two years later, as the Prime Minister, he tweeted: “Since we formed the government, petrol & diesel prices came down. We are committed to removing the obstacles our Nation is facing.”

That happy situation did not last long. Fuel prices started rising again and Modi stopped tweeting on the subject.

In the last five years the retail price of petrol rose from Rs 69.14 to Rs 109.69 –up by more than 58.65 per cent.

The UPA government had given the oil companies the right to fix the retail prices. The reason the companies advance for the almost daily revision of prices is that crude oil prices are rising in global markets. But the heavy burden cast on the hapless Indian consumer is the result also of the high duties levied on petroleum products by the Centre and the states. Traditionally the Centre shares the excise duty on these products with the states. When the Covid-19 pandemic struck, the Centre imposed an additional special excise duty which it does not share with the states.

There was a time when crude prices fell in the global markets. Instead of asking the oil companies to pass on the benefit to the consumers, the Modi government    appropriated it to itself by the simple device of raising the levels.

Fuel prices raise transportation costs and push up commodity prices. The Centre’s decision to make a cut of Rs 5 in the levy on petrol and of Rs 10 in that on diesel tacitly acknowledges that price rise hurt the BJP in the by-elections.

The Centre followed up the small cuts it made in excise duties with a call to the states to forego a part their earnings from fuels as well.

All states ruled by the BJP and its allies responded to the call immediately. So did Odisha’s Biju Janata Dal government.

However, most of the nom-BJP governments refused to follow suit, arguing it was for the Centre, which had benefited the most from the oil price rise, to provide relief to the people.

The stage has thus been set for rival political parties to play a blame game at election time.

Experts say crude prices will continue to rise in the global markets in the immediate future. This means domestic prices of petroleum products will continue to rise. This may compel Modi to cut the duties further.

Modi has a penchant for coining catchy election slogans. Observers believe that closer to the elections he may announce new cuts to push fuel prices below Rs 100 a litre and claim credit for a roll-back. Modi was working on a slew of schemes to make his Hindutva followers happy before the coming Assembly elections.  These include construction of the promised Ram temple at Ayodhya and restoration of the samadhi of the ninth century philosopher Shankaracharya at Kedarnath which was destroyed by floods in 2013.

Work on the Ram temple is progressing at the site of the demolished Babri Masjid, which the Supreme Court had given to a temple trust. On a visit to Kedarnath last week, Modi inaugurated the rebuilt samadhi and unveiled a 12-foot high Shankaracharya statue.

Elections are usually fought on multiple issues. Ahead of next year’s Assembly elections Modi may have to address issues like the widespread opposition to the changes his government made in citizenship norms and the year-old agitation by farmers demanding scrapping of farm sector reform laws.

The farmers’ unions are now holding rallies in the BJP-ruled northern states to work up feelings against the party.