Onion anger mounts against embattled Congress govt

A labourer sits on a sack of onions as she takes a break at a wholesale market in Hyderabad February 11, 2010.

NEW DELHI (Reuters) - The trebling of onion prices in India is not just making street hawker Kamlesh Gupta struggle to keep his children in school but is now threatening the stability of the Congress party-led coalition government.

The world faces soaring food inflation but in a country where 40 percent of the 1.2 billion population lives below the World Bank-estimated poverty line, it cuts deep.

"It's hard to survive," said Gupta, a 35-year-old street hawker at a vegetable market, a bazaar typical of the many in New Delhi where shoppers haggle with merchants as they seek bargains.

Glancing around to make sure no one overheard him, he whispered: "I'm telling you this in confidence: my wife has started to work as a domestic help for 2,200 rupees ($49) a month. Yet we don't have enough to live on."

"There have been price rises in the past, but it was never this bad before," said Gupta, who earns around 200 rupees ($4.4) a day and who has two small children in school. "We wish this government were never elected."

Soothing that anger is the most immediate of the many challenges facing Prime Minister Manmohan Singh, who is mindful that past bouts of soaring inflation have toppled governments.

Emblematic of that rise are onions. A poor person's meal in India is described as onions with flat bread and the price of the vegetable has trebled to 60 rupees ($1.3) a kg in under a year.

At that price, the most well-off of India's poor would have to work for three days to buy a kg of the vegetable. India defines the poor as those earning under $0.42 a day and official figures peg over a third of India's 1.2 billion people as poor.

"Previously, I was mixing onions in every vegetable being cooked at home but now I use it only when I cook some special non-vegetarian dishes," said Rajiv Kumar Singh in Patna.

ONIONS MAY AFFECT ELECTIONS

In 1998, an onion prices spike cost the main opposition Bharatiya Janata Party (BJP) a key state election. It is a result the Congress party hopes will not be repeated in three crucial state polls that are coming up this year.

Food prices in India rose nearly 17 percent in late December, easing marginally from a year-peak. Indians spend over a third of their incomes on food, the highest amongst comparable countries.

A poll published last week showed Congress was losing voter support and would lose over 40 seats if a snap election was held. That result would mean the party would not have enough seats, even with its present allies, needed to rule India, Asia's third-largest economy.

But so far, the government has been unable to keep a lid on prices, even as coalition partners spar over responsibility. Finance Minister Pranab Mukherjee said there was no need for panic, but the call for patience remained unheard.

"We keep hearing ministers on TV and radio saying prices will come down. I come to this market every week and I haven't seen that happen," said Prema Sinha, a 36-year-old homemaker.

She had scoured the market for onions. After three shops refused to sell it at the 40 rupees she was offering for the kilogram she wanted to buy, she settled for half the quantity.

"There is no question of any savings. What we earn, all of that is spent," Sinha said.

The merchant she finally bought the onions from was far from happy with the higher prices. Vinod Gupta said he was selling fewer vegetables and his income was suffering, adding he expected prices to remain high for the rest of the month.

"People can suffer a lot of things, but nothing is more important to them as food. I have sold vegetables for 20 years, but never before have I seen a rise like this," said Gupta.

"If there is an election today, this government will fall."

($1=45.3 rupees)

(Additional reporting by Manoj Chaurasia in PATNA and Henry Foy in NEW DELHI; Editing by Paul de Bendern)