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 fiscal deficit.
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.
