MANmohan Singh ON FIRE

The government, reeling under the perception of policy paralysis, finally grasped the nettle, hiking diesel price by a record Rs 5 a litre while capping the number of subsidized cooking gas cylinders at six a year.
Protests from parties, including UPA constituent Trinamool Congress, greeted the move. Trinamool chief Mamata Banerjee demanded a rollback even as transporters threatened to go on a strike. However, the decision to hike diesel price, the first in 15 months, clearly underlined the government’s intent to repair its finances by reining in subsidies.
The twin decisions are likely to impact household budgets as the price of most food items will go up on account of higher transport cost. The cap on subsidized LPG will, however, leave a biggerhole in the wallet as there is a subsidy of around Rs 370 on a cylinder that’s sold for Rs 399 in Delhi.
Under the present arrangement, oil companies will announce the market rate for cooking gas every month, although households are entitled to three subsidized cylinders over the remaining six months of the financial year that ends in March, 2013.

After months of dilly-dallying, the UPA government mustered courage to boldly throw open the gates to foreign investment in a host of sectors considered political no-go zones like multi-brand retail and civil aviation in a bid to dispel the perception of policy paralysis.
The move will pave the way for the muchawaited entry of foreign retail giants into the $450-billion retail market, although their footprint will be limited to million-plus cities in the states which have agreed to back the measure.
The decisions on Friday, along with a go-ahead for disinvestment in four public sector companies to mop up around Rs 14,000 crore, come within a day of the ruling coalition’s move to raise diesel price by a stiff Rs 5 a litre and cap subsidized cooking gas cylinders at six a year for every household.
Taken together, they mark the most ambitious reforms rush by the beleaguered government headed by Prime Minister Manmohan Singh which has been roundly attacked in recent weeks for drift and diminished will to take bold measures.
Faced with dwindling political fortunes, the UPA government appears to have finally resorted to a flurry of actions that are aimed at salvaging its precarious finances and also retrieving the sinking reforms legacy of the regime.
The Centre said it will sell stakes in four state-run firms—Hindustan Copper, Oil India, MMTC and Nalco. The Cabinet, however, did not take any decision on the divestment of Neyveli Lignite

In a statement, the Prime Minister’s Office sought the support of all sections of society. Television channels, citing unnamed sources, quoted the PM as saying he was willing to “go down fighting” in the course of the cabinet meeting.
In the first term of the UPA, BJP’s opposition to the Indo-US nuclear deal was widely believed to have cost its middle-class support in the 2009 elections and Congress strategists might be hoping that a similar scenario plays out this time around too.
India’s business leaders exulted in the sudden efflorescence of reforms after the long winter of policy paralysis. “From a famine of policy action, we have moved to a feast. The government’s got back its gumption! We cheer and urge that they stay the course,” tweeted Anand Mahindra, chairman of the M&M Group.