India hit by national strike over economic reforms

Schools, shops and government offices were shut in some Indian states on Thursday as protesters blocked road and rail traffic as part of a one-day nationwide strike against sweeping economic reforms announced by the government last week.

The main opposition Bharatiya Janata Party (BJP), joined by smaller parties from both the political left and right, called for the strike to protest against a 14 percent hike in heavily subsidized diesel prices, and a government decision that opens the door to foreign supermarket chains to invest in India.

The measures, part of a package of big-bang economic reforms aimed at boosting a sharply slowing economy, have triggered a political firestorm. Prime Minister Manmohan Singh’s biggest ally pulled out of his shaky coalition on Tuesday, raising the risk of an early election.

Bangalore, India’s IT and outsourcing hub, was hard hit by the strike, but in Mumbai, the country’s financial capital, banks and offices were open as usual. In New Delhi, shops were shut in BJP constituencies and there were fewer cars on the road, but the central business district was untouched.

Across the country, morning commuters were left stranded at train stations and bus-stops as protesters squatted on railway tracks and laid siege to some bus depots. Supporters of the right-wing Hindu nationalist BJP and other opposition parties also blocked some roads with burning tires.

“If we don’t protest now, the central government will eliminate the poor and middle-class families,” said Santi Barik as she protested in Bhubaneswar, the capital of the eastern state of Odisha.

Government offices, businesses, schools and banks in Bhubaneswar were shut, and similar shutdowns were reported in other cities, including Hyderabad, the IT hub in Andhra Pradesh state that is home to local offices of Microsoft Corp and Google Inc. Police arrested dozens of opposition supporters who surrounded the biggest bus station in Andhra Pradesh.

In Bangalore, most of the 3,500 staff employed by Intel Corp and 10,000 staff at Cisco Systems Inc were asked to work from home, company spokesmen said. Infosys Ltd and Wipro Ltd gave workers the day off, but will ask them to work on Saturday instead.

The Congress party-ruled coalition, which has a record for buckling under pressure, partially rolled backed a petrol price increase earlier this year after facing a similar strike. Some Congress officials have hinted the new 5 rupee per liter diesel price hike could be cut, and a new limit on subsidized cooking gas cylinders may also be raised. But they have held firm against calls for the retail reform to be scrapped.

The BJP is seeking to exploit popular anger against the diesel hike and retail reforms – which many mom-and-pop store owners fear will destroy their livelihoods – ahead of a series of state elections later this year and national elections due by 2014.