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UPA set to hike fuel prices, but wary of political fallout
Published on Fri, May 30, 2008 at 22:57 in 
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READY FOR HIKE: Most of the allies have accepted the fact that a fuel price hike is inevitable.
New Delhi: In more bad news for India's economy, inflation has crossed eight percent for the first time in nearly four years and it could get worse with a hike in fuel prices.
Congress and its allies are also grudgingly accepting the fact that oil prices will rise but the political fallout of the hike has them worried.
So the United Progressive Alliance Government and Congress party is trying to find out a way to soften the blow.
Even though most allies of the Congress have reconciled to the idea of a fuel hike but not the Left.
"We are totally opposed to any hike in the prices of petrol, diesel and cooking gas," Communist Party of India-Marxist General Secretary Prakash Karat said.
With the Left against a hike in fuel prices, a crucial meeting between two of three most powerful faces of the UPA regime, Sonia Gandhi and Pranab Mukherjee took place in New Delhi on Friday. The meeting took stock how much the economics of fuel will hurt politically.
And yet another meeting is scheduled just before the fuel price hike is brought into effect on Saturday.
A worried Congress Working Committee demoralised by a string of Assembly poll defeats and with inflation crossing the eight per cent mark, will be meeting on Saturday. Shoulders are already drooping in the government.
"In the short run it will have a moderate inflationary impact. But in the long run it will have a monetary impact in terms of reducing expenditure in some other heads," Union Finance Minister P Chidambaram reasoned.
Oil has really become slippery and prices are taking the voter out of the Congress's reach.
While most of the allies seem to have accepted the fact that a fuel price hike is inevitable, there are nagging apprehension of electoral fallout of it. And that's why in one brainstorming session after another, a way is being found out how to soften the blow.
Even the Congress is desperate to cushion the blow and balance it with duty cuts.
Congress General Secretary Digvijay Singh asked, "Election will come, elections will go. But can we sort of unsettle the whole budget of Government of India?"
It's a decision, which the government has postponed several times. The last substantial hike happened two years back.
The UPA has finally had to give in to global realities and unfortunately for it, it comes in an election year.
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