For Reforms or for Reliance?
Welcome step in the reforms process, or a concession to benefit Reliance Industries? Major newspapers could not agree, or chose not to comment.
But Firstpost’s editorial stand was a welcome surprise, says SEVANTI NINAN. PIX: Mukesh Ambani
On June 27 the government of India announced that it would double the price of natural gas from April 2014. Questions immediately arose: who are the explorers it would benefit? And how would it affect consumers of power, fertiliser and domestic gas?
The reaction of the media is best documented by giving the headlines, of both the news, and the edit comments which followed. And the display given to the story the first day. Big news, or page one below the fold?
June 28
The Times of India, “Power, CNG to get costlier as 100 per cent hike in gas price cleared”. Page 1, three columns below the fold.
The Economic Times, “Govt Shows Spunk, Doubles Price of Natural Gas from ’14. Page 1, first lead.
Hindu Business Line, “Gas price hike: parties are frowning”, “Gas price hike plan, reform moves fire up market, boost rupee.” (From web edition)
The Hindu, “Despite opposition, Cabinet approves gas price increase”. Page 1, first lead.
The Hindustan Times, “Gas costlier, (in red) may trigger price rise”. Page one, below the fold, two column story continued inside.
Mint, “Govt approves hike in natural gas hike.” Page 1, single column page 1.
The Indian Express, “Natural gas price to shoot up in April ’14.” Page 1, first lead.
Financial Express, “Who all will the natural gas price hike hit?” (From web edition)
Business Standard, “Domestic natural gas price doubled.” First lead, page 1.
Firstpost.com: “How ONGC, RIL, Oil India benefit from gas price hike.”
What were the implications of the hike, for public and private sector oil firms, for reforms, for the ordinary citizen, and for the economy because the finance minister quickly hinted that subsidies for the power and fertiliser sectors would cushion the impact? Are not newspapers supposed to go into all that? Why was it done?
Among the mainline newspapers, the Hindustan Times and The Times of India have not carried an editorial page comment till this day. The shoulder headlines in HT’s reporting on page one made it clear what the implications of the hike would be:”DOMINO EFFECT Natural gas price doubled, power food transport will hurt home budgets”. Still no editorial comment was felt warranted.
The Indian Express lauded the decision in its editorial on June 29 (“A soothing price rise”), The Hindu editorial could not make up its mind (June 29). It lauded the basis on which the decision had been made (the Rangarajan Committee formula), but also said that that there should be a ceiling price under the formula. On July 1, however, it carried an editorial page comment headlined “Of Reliance, By Reliance, For Reliance.” Where the author said that the government had used fallacious arguments to double the price of gas and hand over windfall profits to India’s richest company.
One June 29, a Saturday column in Business Standard also suggested that the move was to benefit Reliance Industries even as it went against what the power ministry and the fertiliser ministry had indicated they wanted.
The Indian Express however argued in a lead editorial (June 29) that the increase made eminent sense because there was a shortage of gas, and prices had to be hiked to make it economical for both RIL and the public sector companies to look for gas overseas. And The Economic Times said much the same thing. That the price rise would step up investment in the hydrocarbon sector. And what of the subsidy outgo that would result? Just have policy solutions to better manage higher subsidies and costs, said ET.
Which left it to Firstpost.com, (whose disclaimer said--Disclosure: Firstpost is published by Network18, whose promoters have received funding from the Reliance Group) to slam the decision on 9 counts. It declared that “this is simply not reform. How can a committee- or bureaucrat-decided price be called reform?”
It said that “the government had fixed output prices and not input prices – meaning it has decided how much money gas producers, ONGC and Reliance among them, will make, but not how much gas users (power, fertiliser consumers) should pay. This is utter stupidity.”
And its headline the first day it reported the news “How ONGC, RIL, Oil India benefit from gas price hike,” pulled no punches either.
If a news site with a financial connection to Reliance Industries can call a spade a spade, that at least is good news at a time when there is so much debate on media ownership.
UPDATE
On July 2 The Times of India carried an editorial on the government decision titled "A Load of Gas" in which it took a view quite different from its sister publication the Economic Times. It said doubling gas price would only hurt the economy and redouble criticism on grounds of stoking inflation and supporting crony capitalism.
Disclaimer: the author is related to the author of the Business Standard comment mentioned here.