| NEW DELHI
NEW DELHI Nov 4 A top ally of Indian Prime
Minister Manmohan Singh threatened to quit the ruling coalition
on Friday unless he reversed a rise in gasoline prices, testing
the government's commitment to a move sorely needed to cut the
Trinamool Congress, a regional party, said it would wait for
Singh to return from the G-20 summit in France and reconsider
the increase in petrol prices, the fourth time this year.
If the party were to quit the coalition it would reduce
Singh's government to a minority at a time when it is already
buffeted by corruption scandals and stubbornly high inflation.
"When the prime minister is out of the country, I don't want
to take a decision that can lead to the fall of a government,"
said Trinamool chief Mamata Banerjee, whose 19 lawmakers provide
Singh with a parliamentary majority.
"Let the PM return then our party will go to him and tell
him our view ... that if this goes on like this we don't want to
stay in the government. We have tolerated enough but we are not
willing to accept this burden on the poor any more."
In a first indication that the government could cave to its
ally's demand, a source in Singh's Congress party said on Friday
that a partial rollback of the gasoline price rise was possible.
Banerjee's threat could force the government to delay a rise
in diesel, cooking gas and kerosene prices even though it
desperately wants to cut subsidies to stay in sight of the
2011/12 fiscal deficit target of 4.6 percent of GDP.
But with headline inflation topping 9 percent for nearly a
year despite 13 rate hikes by the central bank since March 2010,
government allies such as the Trinamool have become uneasy with
their ties to the increasingly unpopular federal coalition.
Singh's Congress party is itself nervous about angering its
core constituency, the rural poor, ahead of a string of state
elections beginning early next year. In the past it has given in
to street protests over reform moves such as freeing up farm
In India, the government sets retail prices of diesel,
cooking gas and kerosene to help control inflation and protect
consumers, particularly the poor, from sharp fluctuations in
It granted autonomy to state-run firms last year to fix
retail prices for gasoline and has said it is considering giving
up control of other fuel prices to help rid itself of a
crippling subsidy burden.
Raising diesel prices is a political hot potato as the fuel,
which accounts for over a third of refined oil products' demand
in the country, is widely used by the farm sector and industrial
users and has a cascading effect on the economy.
(Editing by John Chalmers)