In the end, the number of gas cylinders may have a bearing on the Manmohan Singh government’s fate. His government capped the number of subsidized cylinders at six. Mamata Banerjee wants 24.
Both parties continue to believe in old-style economics of deciding what consumers want. There is no reason for a cap provided the price is market determined. If Banerjee wants to sell them at cheaper rates, her government should defray the cost to the oil marketing companies.
It is not that Banerjee does not realize the issues involved: when she says her government does not have the money to subsidize consumption of this fuel, she has to understand that the Union government does not have much of it either. Her recklessness lies in trying to pass off the responsibility of her political choices on others. In a democracy, this is not only bad economics, but bad politics as well.