Finance minister P Chidambaram is absolutely right when he questions the Election Commission’s model code of conduct. When elections are held over as many weeks as they are, the FM has said, it is a bad idea to not allow the government to function during this period. The Election Commission, for instance, told the government that it could not implement the Rangarajan committee’s recommendation on hiking gas prices. Fortunately, the EC allowed RBI to go ahead with issuing bank licenses, but it was pretty much touch and go for a long time. At a time when the economy needs the government to be taking quick decisions, it cannot be subject to such restrictions. No one doubts the EC’s intentions, but complex decision-making cannot be subject to what the EC decides—when an Arvind Kejriwal is publicly stating that gas is being sold at $2.4 per mmBtu in neighbouring Bangladesh, how is an EC that has never dealt with such matters, figure out whether a higher price should be allowed.
This is where the finance minister needs to look within and see the role played by several people in the government. When the decision to implement Rangarajan had already been taken months earlier, why did petroleum ministry babus even send it to the EC? Ditto for RBI and banking licenses? And surely the petroleum ministry was being too clever by half in sending the decision on diesel price hikes to the EC. After all, this decision was taken over a year ago, and was being implemented on a monthly basis. But with elections around the corner, the political class didn’t want to hike prices, so presented the ‘decision’ to the EC as a brand new one. The EC fell into the trap when it ordered a freeze on the monthly reduction in diesel subsidies, currently at R6.80 per litre and adding to about R5,200 crore per month. As former Planning Commission Member Kirit Parikh, the author of several reports on price decontrol, put it in an article in this paper yesterday, ‘EC violates code of conduct’.