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By:

Kiran D. Tare

21 August 2024 at 11:23:13 am

Bengal’s Ludwig Erhard

For decades, Swapan Dasgupta made a career of diagnosing India’s political ailments. As a columnist, editor, author and public intellectual, the erudite and scintillating Dasgupta dissected challenged orthodoxies and defended the intellectual traditions of the Indian Right. However, following his new appointment as the new Finance Minister of a West Bengal in economic doldrums, he perhaps faces the most demanding assignment of his career. His supporters however are confident that if there is...

Bengal’s Ludwig Erhard

For decades, Swapan Dasgupta made a career of diagnosing India’s political ailments. As a columnist, editor, author and public intellectual, the erudite and scintillating Dasgupta dissected challenged orthodoxies and defended the intellectual traditions of the Indian Right. However, following his new appointment as the new Finance Minister of a West Bengal in economic doldrums, he perhaps faces the most demanding assignment of his career. His supporters however are confident that if there is anyone most suited to sort out Bengal’s messy economy, it is Dasgupta. His appointment following the Bharatiya Janata Party’s ascent to power in Bengal after overthrowing Mamata Banerjee’s TMC regime is among the more intriguing political transitions in recent Indian political memory. India has seen journalists cross into politics before. M.J. Akbar moved from the newsroom to the Ministry of External Affairs. Arun Shourie, one of India’s most formidable investigative journalists, became a reform-minded minister in Atal Bihari Vajpayee’s government. Others, from Manish Sisodia to Priya Ranjan Dasmunsi and Chandan Mitra, have made similar journeys. Yet Dasgupta’s case is distinctive. Unlike many journalists-turned-politicians, he was never merely a ‘reporter.’ Whether in debate or through his prolific and trenchant writings, he has always been an intellectual combatant, a scholar of political ideas with a sweeping knowledge of world history by which he leavens those ideas. Dasgupta has always been one of the most articulate exponents of modern Indian conservatism. Educated at La Martiniere College in Kolkata, St Stephen’s College in Delhi and later the School of Oriental and African Studies in London, where he earned a doctorate, Dasgupta cultivated a reputation for formidable scholarship. His books, including Awakening Bharat Mata: The Political Beliefs of the Indian Right and The Ayodhya Reference, revealed an uncommon ability to place contemporary political disputes within a broader historical and ideological framework. For his supporters, he was among the few intellectuals capable of articulating conservative ideas in a language usually dominated by the Left. To critics, he was a sophisticated polemicist. Yet, even his opponents seldom questioned the breadth of his reading or the sharpness of his arguments. However, the challenge facing Dasgupta now is no longer intellectual but administrative. The Bengal he inherits bears little resemblance to the state that once led India in industry, commerce and scientific innovation. As he himself quipped in trademark fashion with a sharp historical analogy, the state’s economy resembled postwar Germany. The figures are sobering. West Bengal’s state debt has ballooned to around Rs. 8 lakh crore during the TMC regime. Thousands of companies have relocated or curtailed operations over the years amid a hostile investment climate. The new BJP government has inherited not merely a fiscal challenge but a crisis of confidence. “We are left with a near-bankrupt treasury,” Dasgupta said. Equally troubling, in his view, is the erosion of trust among investors and entrepreneurs. Bengal’s relationship with business has been uneasy to say the least. First the long night of the Left, followed by the TMC’s anti-business, appeasement brand of politics has ensured that the scars of industrial disputes and land controversies remain fresh. In this dire situation, reviving private investment will require convincing businesses that Bengal has changed. In this respect, Dasgupta’s strengths may prove unexpectedly useful. Throughout his career he displayed an ability to engage with ideas, institutions and stakeholders across ideological divides. His early moves hint at a broader vision. Rather than confining pre-budget consultations to Kolkata, Dasgupta shifted the Finance Department’s attention to Siliguri in a moved suffused with deliberate symbolism. North Bengal has long complained of neglect by governments centred on the state’s southern districts. By engaging tea producers, agricultural interests, tourism operators and local business groups, the newly-minted finance minister appears eager to demonstrate that economic revival will not just be a Kolkata-centric project. That said, debt servicing consumes a substantial portion of state revenues. Welfare commitments are politically difficult to unwind and infrastructure deficits remain significant. While public intellectuals excel at identifying problems, governing demands compromises and the acceptance of imperfect solutions. Still, Bengal’s new finance minister possesses as fine an appreciation of history than any Indian politician around. He knows that states decline not just because economic mistakes but because they lose faith in their future. Restoring that confidence may be the central task of his tenure. For years Swapan Dasgupta chronicled India’s political story from the sidelines. Now he finds himself at the centre of one of its most consequential state-level experiments. Whatever the outcome of his tenure, few would deny that Bengal’s finances have acquired perhaps their most learned custodian in decades.

Fuel Shock

Barely a week into the escalating conflict in Iran and the wider Middle East, India has already begun to feel the tremors of its dependence on imported energy. The immediate signs are unsettling as supply anxieties have mounted, along with abrupt policy signals from oil companies and a sharp rise in cooking-gas prices.

 

A flurry of directives from India’s oil ecosystem has rattled both retailers and consumers. One proposal reportedly prioritised domestic LPG supplies for households, potentially leaving commercial users scrambling for fuel. Another directive required petrol and diesel retailers to make advance payments to secure their daily fuel supplies from oil marketing companies (OMCs). For a network of roughly 90,000 fuel stations, many of them small operators in semi-urban and rural areas, the sudden requirement to finance inventories upfront triggered alarm across the sector.

 

Fuel retailing in India runs on narrow margins and predictable cash cycles. For dealers, the prospect of paying in advance for each supply could have created a severe liquidity crunch.

 

Consumers received a more immediate jolt. The price of a 14.2-kg domestic LPG cylinder has been increased by Rs. 60 across the country. In Delhi, the price has risen from about Rs. 852– Rs. 853 to roughly Rs. 913, marking the first revision since April 2025. Commercial cylinders used by restaurants, hotels and small businesses have seen an even steeper jump of Rs. 115. For the roughly 33 crore households that rely on LPG for cooking, the increase is far from trivial. For small eateries and food vendors, already squeezed by high input costs, it is another expense that will inevitably be passed on to customers.

 

Behind the turbulence lies the enduring centrality of the Middle East to the global energy system. Despite decades of diversification, the region still accounts for about 30 percent of global oil production and roughly half of seaborne crude exports.

 

Since the conflict escalated, global crude prices have climbed from roughly $65–67 a barrel to around $82. Natural-gas markets have been even more volatile, with prices rising by more than 40 percent. For India, such spikes translate directly into heavier import bills and renewed inflationary pressure.

 

Governments typically try to cushion such shocks through subsidies. India already spends heavily on this front. In the current fiscal year, India has budgeted around Rs. 2 trillion for subsidies on LPG cooking gas and fertilisers. But subsidies have limits. If crude prices remain above $80 a barrel for long, analysts estimate the fiscal burden could swell by another Rs. 300–500 billion. A weakening rupee, which often accompanies rising oil prices, would magnify the strain further.

 

The Iran crisis offers a sobering reminder. India’s economic rise may be powered by technology, services and manufacturing, but its engines still run largely on imported hydrocarbons. Until that dependence diminishes, every tremor in the Gulf will echo through India’s petrol pumps, household kitchens and public finances.

 


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