Finance Minister Jaswant Singh has come to be known as the "bail out" minister after he had come to the rescue of UTI and IDBI by providing crores of rupees for their restructuring. Now Singh has got the tag of "roll back minister" too. His predecessors, Yashwant Sinha and Dr. Manmohan Singh, (both of whom attempted to cut back the subsidy) must be laughing up their sleeves at what is happening to Singh as they also shared a similar fate. What happened behind the scenes is quite interesting. It is true that the Prime Minister, Atal Bihari Vajpayee, not only knew about the hike proposal as the budget was read out to him at least thrice but also in agreement with the measure. So there is no doubt that the final nod for the roll back came from the Prime Minister. Jaswant Singh gave enough hints about this fact when he referred to the adverse comments about him. " So I went to the Prime Minister and asked him if I was adamant. He said I should ask my conscience. (Apna Brahma se poocho). So I asked my Brahma. Now if all sections of the House do not want the fertiliser price to be hiked, so be it. After all it is a matter of Rs. 700 crores subsidy." This is how he made light of a hard decision.

Let us look at the facts. The urea price increase this year was hardly 2.1 per cent as compared to the five per cent hike last year. No one in the Finance Ministry had thought that there would be so much protest when Yashwant Sinha got away with a much higher price hike earlier. As Jaswant Singh had declared, it was a question of a mere Rs. 700 crores.

Why do the political parties want the roll back? Their case is that this is the year of unprecedented drought. One wonders how many farmers are going to buy urea when their lands are parched? Secondly, there is more awareness about balanced use of fertilisers now. Even the BJP economists agree that fertiliser use should be balanced as over-use has resulted in lesser yield. There are more and more cases of rejection of export-oriented agricultural produce. Fertiliser subsidy now stands at Rs. 12,000 crores and it is alleged that a major part of the subsidy goes into the pocket of fertiliser manufacturers. The dent in the budget would be a minor one. However, the farmer’s lobby and the political parties which are looking to the farmers as their vote banks got into the act immediately to put pressure for a roll back. The stress was not on the amount but the very idea of subsidy cut. Farmer’s issues have become highly emotional and this is the price one pays for it.

Every year delegations from several industries and consumer organisations queue up before the Finance Minister’s room seeking redressal from various budget proposals. This year, not many delegations marched to North Block to represent to the Finance Minister. Perhaps it was because of the nature of the budget itself. The budget was too soft and there were no major issues or hike in taxes. Industry too was happy. Consumers were satisfied with the price reductions in the auto sector and other sectors. The middle class was satisfied with no additional tax burden.

However, finance ministers all over the world have an unpleasant duty to perform. Jaswant Singh was no exception. Although he is not an economist like Dr. Manmohan Singh, he had enough common sense to see that the urea subsidy had to be cut and it was only good for the farmers in the long run.

However, the politics of subsidy is something different. No political party wants to annoy the farmers and this is true of the BJP too. There is so much at stake when the BJP is going to directly face the Congress in the four Assembly elections to Madhya Pradesh, Rajasthan, Delhi and Chattisgarh in November. In fact, Singh had taken trouble to visit the BJP office in Ashoka Road and sat with the party president, M. Venkaiah Naidu, to hear the party’s view before the budget.

The Rajnath Singh committee report on taxation was studied. Kelkar’s recommendations were more or less dumped. So when Singh announced the urea hike, Naidu was taken aback. He was the first to rush to the Prime Minister immediately after the budget speech and insisted on roll back. Andhra Pradesh Chief Minister N. Chandrababu Naidu who took up the case with both the Prime Minister and the Finance Minister soon followed. He not only deputed TDP leader Erran Naidu but also personally called up both the PM and the FM to lodge his protest. Then of course, others like INLD chief and Haryana Chief Minister Chautala, Trinamool Congress chief Mamata Banerji and others. However, it was Agriculture Minister Ajit Singh who put the maximum pressure on the PM to withdraw the measure and he succeeded.