Opposition-driven protests over rising food prices erupted near India's parliament and in the east of the country on Wednesday, posing a political challenge to the government's plans to liberalise fuel prices. The ruling Congress party was due to meet later on Wednesday to debate a freer fuel pricing regime that is expected to lead to an immediate rise in prices of gasoline and diesel but also cut fiscal costs for the government.
Food prices are rising at an annual rate of nearly 20 percent in India, the highest in 11 years, and the government is under pressure to find a solution without hurting growth in an economy recovering from a six-year-low pace of growth. Inflation has given opposition parties an issue on which to attack the ruling party, which draws its support from many of India's rural poor.
While about 5,000 supporters of the main opposition Hindu-nationalist Bharatiya Janata Party (BJP) protested near the parliament, big demonstrations were also reported from the eastern Orissa state. Protesters, carrying the BJP's saffron flags, surrounded government offices in major Orissa towns waving posters displaying comparative food prices from previous years.
The protests came as India's oil minister said he would send the ministry's recommendations on a proposal to review fuel pricing to the cabinet. A government panel has advised eliminating price controls for gasoline and diesel and an income-linked rise in kerosene and cooking gas prices. The Congress has political capital to expend to partly lift fuel price controls, leaving out potentially more politically jarring hikes in the prices of cooking fuels.
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