Coalition Karma

In the winter of 2011, the world watched as international crude prices surged amid the chill of economic uncertainty, casting a shadow of concern over the global economy.

- Abdul Haleem Sherif

In the winter of 2011, the world watched as international crude prices surged amid the chill of economic uncertainty, casting a shadow of concern over the global economy. For India, led by the then Prime Minister Manmohan Singh of the Congress, it was a time of existential crisis. Squeezed between surly allies, economist-turned-statesman Singh found himself navigating treacherous political waters.

One such ally was Mamata Banerjee, Trinamool Congress (TMC) supremo and chief minister of West Bengal. Her threats to withdraw support from the central government sent shockwaves through the corridors of power. The Arab Spring had unleashed a wave of unrest that reverberated across the globe, sending crude prices soaring. India, heavily reliant on oil imports, felt the sting acutely, grappling with a ballooning current account deficit.

But understanding and empathy seemed in short supply among the members of the United Progressive Alliance (UPA). Singh, who once rescued India from the brink of bankruptcy during his tenure as finance minister in the P.V. Narasimha Rao government (1991–96), found himself besieged by political adversaries who seemed unwilling to acknowledge the harsh economic realities confronting the nation.

Faced with mounting pressure and the imminent threat of his government collapsing, Singh made the difficult choice of slashing petrol prices for end consumers by boosting subsidies, a move fraught with both political and economic implications. The UPA’s second term (2009–14) saw India’s total expenditure on fuel subsidies shoot up from ₹2,852 crore to ₹85,378 crore.