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Price protests hit Kolkata, as cabinet reshuffle looms

Price protests hit Kolkata, as cabinet reshuffle looms

Kolkata: Thousands of supporters of a key party in India’s ruling coalition marched through the eastern city of Kolkata on Monday to denounce double-digit food inflation, the latest sign of unease among the government’s partners before critical state elections.

“We will not accept skyrocketing prices," read a giant banner at the 4,000-strong rally organised by Trinamool Congress, whose support Prime Minister Manmohan Singh depends on for a majority in parliament.

Trinamool Congress has pledged to stage a rally in New Delhi on Wednesday against a 4.5% rise in petrol prices imposed by state-run oil firms, the second increase in about a month.

The country battled double-digit inflation through most of 2010, the highest rate of any major Asian economy. Spiralling food and fuel prices have damaged voter confidence in the government led by the Congress Party and highlighted stresses in the multi-party coalition.

Some of Congress allies, such as Trinamool Congress and the DMK, which underpin the coalition’s majority in parliament, face a tough fight in local elections due by May.

High prices could affect the Congress party’s prospects in state elections, and if its allies fare poorly as well it would put the coalition under strain.

Trinamool is not expected to abandon the coalition, but is trying to distance itself from price increases ahead of the West Bengal vote, in which it hopes to dislodge the communist government, in power for three decades.

“We are concerned and we demand that we should be consulted while taking steps like increasing petrol prices," Trinamool leader Sudip Bandopadhyay told Reuters. “High prices is a burning issue and we cannot let the poor be hurt like this."

The party holds 19 seats and is a key constituent of the coalition which has a majority of just 16 in the 545-member parliament.

A recent poll showed voter discontent with Congress party would result in a loss of 40 seats in a general election, threatening its majority and damaging its ability to form a working coalition government.

Governments around the world have been taking steps to tackle soaring grain prices and head off unrest, with north African countries Libya, Algeria and Morocco cutting taxes on foods or regulating prices and stepping up supplies.

The headline inflation stood at an annual 8.43% in December, following a 7.48% rise in November, as food inflation hit a year-high this month before easing marginally to 16.91% last week. This has kept up pressure on the central bank to raise rates this month.

Even the Congress party expressed worry over high inflation, seeking to put the onus of petrol price hikes on the oil firms.

“I couldn’t agree with you more that inflation is a cause of concern. A Rs5 (10 cents) per litre hike does seem to be a tad unfair," said Manish Tewari, Congress spokesman.

High prices top of the list of headches for Singh’s government, which is also mired in multi-billion dollar corruption cases that have emboldened the opposition.

Cabinet reshuffle

The DMK party also said on Monday it feared being punished by voters in local elections in southern Tamil Nadu state over high food prices.

“Definitely we are concerned, and whichever government is in power will be held responsible. That is why we have expressed our concerns to the (federal) government," said DMK spokesman T.K.S Elangovan.

Elections are also due over the course of the year in Kerala in the south and Assam in the northeast.

Singh is considering reshuffling his cabinet, possibly as early as Wednesday. He was to meet the President Pratibha Patilon on Monday evening to discuss the matter, an official source said.

The prime minister needs to fill several vacancies, some which occurred as a result of the departure of ministers over graft accusations.

The reshuffle could show the direction the government will take, either to back reformist ministers or bow to political expediency and industry pressures, in the run-up to important state elections this year and a general election due by 2014.

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