UPA begins damage control, slashes sales tax

ROLLBACK RAJ? Congress has asked its chief ministers to slash sales taxes to seem populist.

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New Delhi: The morning after the fuel price hike, the UPA seems to have woken up with a sinking feeling that the hike could lower the party's chances in the forthcoming elections.

The damage control exercise started fast enough with Congress President Sonia Gandhi on Thursday morning giving a wake up call to all chief ministers of the Congress party asking them to slash sales tax and sound populist.

The first to react was Delhi Chief Minister, Sheila Dixit. LPG cylinders in Delhi will cost only Rs 10 extra, compared to the Rs 50 increase across the rest of the country. Maharashtra is doing the same.

Information and Technology Minister, Kapil Sibal said, "I think it's a good idea. It sends a message that if sales tax are cut, it will soften the blow."

Niceties apart, the Congress-led UPA Government is worried. It may have been a brave and tough decision to raise prices, but economic courage has seldom won elections.

With Sonia Gandhi taking the lead, other members of the UPA will campaign across the country, explaining the need for the hike and aam aadmi (common man) programmes implemented by the Government.

And the BJP fighting anti-incumbency in several states and hopeful of a Lok Sabha victory is not wanting to take any chances. So the BJP-led states have also been asked to go in for a sales tax slash.

BJP leader, Rajiv Pratap Rudy says, "Rajnath ji has asked BJP states to cut the sales tax."

On Wednesday, when the much-delayed fuel hike finally happened, it seemed that the economist Manmohan Singh had had his say, but in the face of elections it is the party calling the shots, forgetting that surrender of sales tax might ruin state economies.