States: Gujarat; Costly Drop

India Today, November 23, 1998
Nov 23, 1998

GUJARAT
Costly Drop

The BJP Government plunges into a political crisis as it is unable to check the soaring price of groundnut oil.

By Uday Mahurkar

If Gujarat were to face an election, Chief Minister Keshubhai Patel would have much to worry about. Like Sushma Swaraj, his BJP counterpart in Delhi who is grappling with galloping onion prices, Keshubhai finds himself on slippery ground as the price of groundnut oil, the cooking medium of a majority of Gujaratis, has hit the roof in the state. A month ago a 15 kg tin of groundnut oil cost Rs 900. Now, mercifully for him, it has come down to Rs 750. Yet the oil issue continues to give nightmares to the nine-month-old Keshubhai Government.

At the root of the crisis is the Government order restricting the sale of edible oil outside the state. Farmers and oil mill-owners in Saurashtra, the state's main groundnut oil-producing region, are demanding an immediate withdrawal of the ban. But Consumers and Civil Supplies Minister Jaspal Singh is not budging. He warns that any withdrawal would result in oil prices spiralling to Rs 1,200 a tin in the coming months. Caught in the crossfire is Keshubhai, a Saurashtrian, who has the daunting task of keeping all the three sections -- consumers, mill owners and farmers -- happy.

Last week the crisis took a serious turn when the Saurashtra Oil Millers' Association (SOMA) threatened to stop oil production if the restriction was not lifted immediately. "If the Government doesn't relent, we will be forced to take strong action to protect the interests of millers and farmers," warned soma President Ukabhai Patel. In 1996 the then chief minister Shankersinh Vaghela had removed the restriction and the price of oil remained steady, thanks to the large-scale import of edible oil by the Centre. But no sooner had Singh become the minister than he reimposed the ban on the ground that large-scale sale of oil outside the state would lead to shortages within Gujarat. soma, on the other hand, argued that any further restriction would only result in losses to the millers and the farmers. It also claimed that unscrupulous traders were illicitly selling oil outside the state and reaping huge profits at the cost of the millers.

Jaspal Singh Strictly speaking, there is no ban on the movement of oil outside the state. All that Singh has done is impose a clause that requires the millers to intimate the district collector concerned 48 hours in advance about the details of the oil stock they want to sell outside the state. To many of the millers that was a major hitch. In the past they had raked in immense profits by selling unaccounted oil and avoiding tax.

Matters would have been simpler if the Government was united on the issue. Unfortunately, the seven-member committee of ministers set up by Keshubhai to solve it is divided. While Singh, Industry Minister Suresh Mehta, the committee chairman, and Health Minister Ashok Bhatt want the restriction to continue, the other ministers -- Vajubhai Vala, Savjibhai Korat and Nitinbhai Patel -- are for a settlement in favour of the farmers. Narmada Development Minister Jainarayan Vyas is undecided. Says Korat: "The crux of the matter is that any settlement should take care of the demands of both the consumers and the farmers."

With a settlement nowhere in sight, the issue is now acquiring political overtones that threaten to divide the BJP. Like Keshubhai, Korat and Vala are also from Saurashtra, where the BJP won 90 per cent of the seats in the last assembly election. To add to the pressure, the Bharatiya Kisan Sangh, the RSS-backed farmers' body, has called for the withdrawal of the restriction, saying it is harming the farmers' interests. Singh and Mehta, with no stakes in Saurashtra, are adamant that the millers will have to toe the Government line. Though the crisis shows no signs of abating, Keshubhai exudes optimism: "We are confident of resolving it to the satisfaction of all the parties involved," he says. BJP leaders only hope that the confidence is not misplaced.

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