Hundreds of thousands of truckers stayed off the roads across India on Sunday, the second day of a nation-wide strike to protest a new service tax, disrupting movement of everything from food to cement and pushing up prices.
The strike was called by the All India Motor Transport Congress (AIMTC), the country's largest truck union with nearly 3 million vehicles.
"The strike is total in all parts of the country. There is no loading or unloading of goods taking place anywhere in the country," said Mahendra Arya, AIMTC spokesman in the western state of Maharashtra.
"This kind of a strike will totally affect industries that depend on raw-materials and supplies required for production. That supply is totally cut off."
Trucks account for more than 60 percent of goods delivered across the country, according to government estimates. Finance Minister P. Chidambaram proposed levying a 10 percent service tax on freight booking agents in his 2004/05 budget as part of a drive to widen the service tax net and boost revenues.
The government has since clarified that the tax would only apply to booking agents and not to truck owners or transporters. But the truckers are not convinced and say there is rarely a distinction between the two categories.
The government has issued an appeal in some newspapers, urging the truckers to call off the strike, but there has been no sign that the two sides would meet to discuss their differences. The truckers' group says it will not call off the strike until the government withdraws plans for the tax.
Analysts say the strike could further fuel inflation, which is already at a 3-1/2 year high of 7.96 percent in the week ended August 7.
"I am stocking up vegetables as much as I can. Prices are already high, and if the strike continues it will be beyond our reach to buy expensive vegetables," said Shweta Chauhan, a Delhi housewife.
The Confederation of Indian Industry, a leading industry lobby group, urged the government and the transporters to resolve the issue through dialogue and ensure that economic activity is not hurt and citizens do not suffer.
"At a time when the economy is growing steadily, the transporters strike will have a major, negative impact," said a statement from the confederation.
The Indian economy, Asia's fourth-largest, is expected to grow close to 7.0 percent in fiscal year ending March 2005, making it one of the fastest growing economies in the world.
A 9-day truckers strike in April last year had crippled deliveries and slowed down quarterly industrial growth to 4.9 percent, compared with a six percent-plus growth between January and March that year.