India Insight

Mamata Banerjee: I’ve got Friday on my mind

Mamata Banerjee‘s threat that her ministers would quit on Friday unless the Indian government scrapped its plan to save the economy was her way of giving the government time to consider its options.

I told my colleague Aditya that in reality, it was probably a chance for her to reconsider her move because there was no way that the government would bend to her desires.

That’s not the most auspicious start to an American journalist’s attempt to call outcomes in Indian politics. The government’s reform plan, from which there was to be no retreat, no surrender … is in retreat.

The plot outline is simple: India must take urgent steps to fix its tottering economy, or risk a debt rating downgrade and other economic indignities that could lead to its worst financial crisis since 1991 when it had to ship all its gold to England and Switzerland to secure a loan to stay in business.

The United Progressive Alliance, a coalition government led by Prime Minister Manmohan Singh, dropped a bunch of bombshells last week including:

• allowing foreign direct investment in multi-brand retail (up to 51 percent)
• capping the subsidy that the government pays on cooking gas
• raising diesel prices by 5 rupees a litre
• allowing more foreign investment in media companies (from 49 to 74 percent)
• allowing more foreign investment in airlines

Banerjee says the diesel move in particular will make life harder for hundreds of millions of poor people and demanded that it be removed. Her leverage: if the UPA didn’t do what she wanted, she would pull her party out of the alliance. This would hurt the Congress party’s chances of winning the next general elections in 2014, and could force early elections and the resignation of the prime minister.

Mamata Banerjee's threat that her ministers would quit on Friday unless the Indian government scrapped its plan to save the economy was her way of giving the government time to consider its options. Join Discussion

Political crisis in India: Mamata Banerjee moves out, UPA should move forward

It wasn’t unexpected. After more than three long years of association with the UPA II coalition government, key ally Mamata Banerjee is taking her name off the lease, packing up her things and getting ready to move out. Whether she has taken Congress’ chances for holding power in India with her depends on how strong — and willing — the party’s other friends are.

This move, precipitated by her anger at urgent government moves to fix India’s economy, is a case of better late than never. There is no point being part of a coalition if you don’t like how it works or the decisions that it makes.

Banerjee isn’t moving out just yet. After giving the coalition 72 hours to relook at its recent initiatives, she has given another 72 hours to the coalition before her ministers resign on Friday, Sept. 21. Her demands: rollback diesel prices, scotch a plan to allow foreign direct investment in India’s retail businesses and spend more money on keeping home cooking gas prices artificially low.

Banerjee accused the UPA of not consulting her on diesel and foreign investment. That’s a fair point, but it’s unclear why she thinks that the coalition will change its mind all of a sudden, when it was all too clear that she has been repeatedly willing to fracture her party’s alliance with the Congress party. This in turn would dramatically improve the chance that Congress’s main rival, the Bharatiya Janata Party, and its allies, could sweep India’s next general elections.

This is her main card to play, that Trinamool is the key to helping Congress fend off the BJP. The question for Congress is whether there might be a call for elections before 2014, and how well the party will weather the vote. For that, it needs other friends, such as the Bahujan Samaj Party (BSP) and Samajwadi Party – Mayawati and Mulayam Singh Yadav – who can make all the difference when its comes to calculating the final numbers in the Lok Sabha.

Barring Banerjee’s sudden return, which could yet happen, Congress soon will find out whether the BSP and Samajwadi leaders want to get a little closer. However, it is tough to believe that Congress did not make such arrangements beforehand.

If this doesn’t happen, there will be problems. It is too late to stop the changes that the UPA announced in recent days. If they do, foreign investors likely will look for quick way outs, and ratings agencies will feel a whole lot better about downgrading India’s debt. That means the end of the good times for quite a while.

Barring Banerjee's sudden return, which could yet happen, Congress soon will find out whether the BSP and Samajwadi leaders want to get a little closer. If not, there will be problems. It is too late to stop the changes that the UPA announced in recent days. If they do, foreign investors likely will look for quick way outs, and ratings agencies will feel a whole lot better about downgrading India's debt. That means the end of the good times for quite a while. Join Discussion

You can’t talk about Manmohan Singh that way!

Is it a compliment when the government of one of the largest countries in the world demands that you apologise for something you wrote? Ask Simon Denyer, India bureau chief of The Washington Post and a former Reuters editor based in Washington D.C. and India.

Denyer in a Post article called India’s prime minister Manmohan Singh a “dithering, ineffectual bureaucrat presiding over a deeply corrupt government”. Denyer also said that the 79-year-old Singh has fallen from grace, and that he no longer fits the image of being a “scrupulously honorable, humble and intellectual technocrat”.

Denyer didn’t leave much out: Singh is an object of ridicule, has ignored his cabinet’s corruption, has let the rupee’s value collapse, has let his reputation be tarnished, has given away coal mining concessions and cost the treasury billions, and lost the confidence of his party long ago. The implication is that his main value is to be quiet and do what he’s told.

The Indian government demanded an apology. Denyer refused.

His words might be strong, but were they really so strong that they shook a nation of 1.2 billion to its core? Other media, not to mention millions of people on Twitter, have said worse things about Manmohan Singh, the Congress party that he represents and India in general. Time magazine called Singh an “underachiever”. The Independent declared him Sonia Gandhi’s “poodle” (before apparently changing the word to “underachiever”). Nobody asked for an apology then.

Maybe it’s because the United Progressive Alliance, which the Congress party leads, smells its own blood in the water as the 2014 general elections start to look like they might vault its primary opponent, the Bharatiya Janata Party, into the leadership spot. This appears to have made the government more sensitive to criticism from the big, bad Western press.

The Congress is getting what it asked for. When Congress party chief Sonia Gandhi appointed Singh as Prime Minister, she knew that he would be a loyalist and not freelance on any big problems. Making him Congress’s choice as PM meant that he would never threaten the Gandhi family’s grip on their party. His personality is not going to change now, even though people say that India’s slowing growth, persistent poverty, repeated corruption scandals and other problems require a more outspoken leader.

Is it a compliment when the government of one of the largest countries in the world demands that you apologise for something you wrote? Ask Simon Denyer, India bureau chief of The Washington Post and a former Reuters editor based in Washington, D.C., and India. Join Discussion

Congress strikes two birds with one stone

Why so much euphoria over the presidential polls? Shouldn’t the government concentrate on the economy; it’s a ceremonial post after all, we thought.

However, the way the election process panned out might be the boost the Congress party needed ahead of the 2014 general elections, not only politically, but even for the economy.

With Finance Minister Pranab Mukherjee all set to be India’s 13th president, the party has every reason to cheer, at least for now. The Congress will have the benefit of having one of its most loyal ministers at the Rashtrapati Bhawan, and he can come in handy in 2014.

From the economy’s perspective, the Congress has sent a clear signal that it has had enough of Mamata Banerjee, its key ally. She has left no stone unturned when it comes to blocking New Delhi’s initiatives to push through reforms, something desperately needed to get the economy back on track.

The Economic Times headline sums it well – Dada to walk the lawns, Didi can take a walk. It was high time the Congress put its foot down and sent a clear message to her. The strategy seems to have worked.

Banerjee gave the Congress sleepless nights when she said her choice was former president APJ Abdul Kalam, and that she had support from Samajwadi Party head Mulayam Singh Yadav, who has promised outside support to the government when needed.

Even her proposal that Prime Minister Manmohan Singh could be considered for the president’s post was a signal that she had lost confidence in the leader, something that upset the Congress further.

Though Mukherjee might leave the finance ministry at a bad time for the economy, with Mamata Banerjee cornered, the presidential elections will only make life for the Congress party and the next finance minister easier. Join Discussion

With stalled reforms, Indian government needs to win new friends

‘Deferred’ — Excessive use of this word is something that India cannot afford at this stage. Amid economic turmoil, reforms are desperately needed to signal the government’s resolve to fix the current situation.

But in yet another postponement on Thursday, the cabinet deferred the pension reform bill which proposed to open the sector to foreign investors, after key ally Mamata Banerjee, chief minister of West Bengal and Trinamool party chief, opposed it.

With 19 members in the Lok Sabha, parliament’s lower house, Banerjee’s party has acted like a roadblock for the UPA coalition for months. Maybe the government needs to seriously start thinking about replacing her in the coalition, or limp along as a lame duck administration until the next election.

From the pension bill, fuel price hikes, land acquisition proposals, to bills which proposed increasing foreign investments in multi-brand retail and aviation, she has opposed all of them. Her reason for each is generally the same — it’s against ‘people’s interest’.

So why is Banerjee a part of the government? If she is against most of the government’s initiatives, she should withdraw her support in protest.

Perhaps she has a reason. She needs New Delhi’s support to bail out West Bengal which is burdened with India’s highest state debt of nearly $40 billion. She also knows that there is no one else chomping at the bit to support the Congress-led UPA alliance at this very moment.

With the economy slowing and reforms on hold, perhaps Prime Minister Manmohan Singh’s Congress party should try harder to make new friends.

Manmohan Singh's ruling Congress party and the Indian economy need one thing in common – a confidence boost, and without pushing reforms it is difficult to achieve that. Join Discussion

Why is Team Anna targeting the PM?

A combative Prime Minister Manmohan Singh has said he would quit politics if charges of corruption in allocating coal blocks, levelled against him by Gandhian activist Anna Hazare’s anti-corruption team, are proved.

Singh has been criticised in the past for not doing enough to curb corruption in the government, but the one thing that has never been questioned, even by his detractors, is his integrity.

So why is Team Anna going after Singh? Especially since the allegations are based on a federal auditor’s draft report in which there is no direct proof of corruption or gains made by the prime minister.

Public support for Team Anna has waned considerably in recent months and the activists are not without their own closet skeletons.

They have  been criticised for their generalisation of the political class and officialdom as corrupt, their over-simplified view on how to fight corruption and use of crass language, like when senior member Prashant Bhushan called Singh “Shikhandi” (a mythological character in the Mahabharata) to describe him as someone who shields corrupt officials.

This is a far cry from last year when Hazare launched his first hunger strike to demand the creation of an anti-corruption ombudsman. It ignited country-wide protests against corruption and round-the-clock coverage by the media.

Enthusiasm has gradually waned after some bizarre comments by Hazare (including asking people to slap corrupt officials and calling for public flogging of alcoholics), his reported affiliation with right-wing groups like the Rashtriya Swayamsevak Sangh (RSS) and frequent clash of statements by team members on important issues.

A combative Prime Minister Manmohan Singh has said he would quit politics if charges of corruption in allocating coal blocks, levelled against him by Gandhian activist Anna Hazare’s anti-corruption campaign, are proved. Join Discussion

Congress reshuffling an empty deck?

The clock is ticking for the ruling Congress party. Ever since the national auditor’s report blew the lid off the 2G spectrum scandal, the second term of the UPA government has been clouded by incessant talk of premature general elections or who will lead India in 2014.

As rumours do the rounds of a possible reshuffle of the Congress party after the Budget session, one gets the sense that India’s grand old party is starting to prepare for national elections, even if they are two years away. And rightly so, especially after its disastrous performance in Uttar Pradesh, the state that sends the largest number of lawmakers to parliament. While no political party is likely to secure majority if national elections were to be held today, regional parties could hold sway.

The Congress’ present situation is a throwback to the 1960s when the party was trying to revitalise its functioning in the face of declining popularity and vote share. Indira Gandhi ruled India for eleven consecutive years, followed by another term later that was cut short by her assassination. After her son Rajiv came to power and his destiny followed his mother’s, the Congress returned to power for only one term until the UPA government came to power in 2004.

This time it is unlikely the reshuffle will actually revive the party — with a generation of leaders close to retirement and a severe shortage of mid-level talent, Congress has few obvious options. There is still little clarity about succession.

It is also unlikely Manmohan Singh will be the prime ministerial candidate again. There is uncertainty over whether party president Sonia Gandhi’s son Rahul can run both the party and a government, if required. Nor does the party nurture its leaders to lead from the front. And with no other option in sight, Sonia Gandhi ailing and unwilling to lead, and the current PM conspicuously inert, the Congress party is increasingly faceless.

The Congress’ leadership vacuum could boost the fortunes of regional political parties, their rising power evident in the recently concluded assembly elections. As for the BJP, which has its eyes on New Delhi ever since its 2004 India Shining campaign bombed, there could be two scenarios — elections could cost the party dear if it doesn’t put its own house in order; or the unpredictable Indian voter might just have a typical mood swing and decide to elect the pro-Hindu party once again.

The Congress' present situation is a throwback to the 1960s. But this time it is unlikely the reshuffle will actually revive the party -- with a generation of leaders close to retirement and a severe shortage of mid-level talent, Congress has few obvious options. There is still little clarity about succession. Join Discussion

Zardari’s India visit: Much ado about nothing?

As the hype over Pakistan President Asif Ali Zardari’s India visit settles, critics and the general public are wondering whether the so-called dargah diplomacy could be a game changer in India-Pakistan ties?

Zardari’s trip to India, the first by Pakistan’s head of state since Pervez Musharraf’s visit in 2005, was overshadowed by the spectre of Hafiz Saeed, who had a $10 million American bounty placed on his head this week.

Prime Minister Manmohan Singh told Zardari it is imperative the perpetrators of the 2008 Mumbai attacks are brought to justice.

New Delhi’s insistence on punishing Saeed, the suspected mastermind of the Mumbai attacks, may put further pressure on Islamabad to take action against one of its most notorious Islamist leaders. But the Pakistani establishment has maintained there is no concrete evidence against Saeed.

It remains to be seen whether Saeed, whose whereabouts in Pakistan are no secret, will be reined in. After all, he has been cleared by Pakistani courts.

But can Zardari do something in the interest of bilateral diplomacy? He has his own problems to deal with back home, including a widening rift with the powerful military establishment. His prime minister Yusuf Raza Gilani may lose office if convicted by the Supreme Court for his failure to re-open corruption cases against Zardari.

For now, Pakistan’s strategy seems to be ‘wait and watch’ or perhaps pray, which is what Zardari did.

As the hype over Pakistan President Asif Ali Zardari's India visit settles, critics and the general public are wondering whether the so-called dargah diplomacy could be a game changer in India-Pakistan ties? Join Discussion

Allies fretting over issues a warning sign for Congress

The past few days have been quite busy for the government. As yet another spiritual leader started yet another “movement” against corruption in the government and bureaucracy, Prime Minister Manmohan Singh was at the chic French seaside resort of Cannes, holding discussions with heads of state of the G20 nations on how to deal with the crisis in Greece.

Back home, another petrol price hike left the general public seething as the main opposition  Bharatiya Janata Party went on the offensive yet again. Singh put up a firm stand when he said that the country should move more in the direction of deregulation. It was a situation he has found himself in regularly during his second term, that of political versus economic compulsions.

Talking about political compulsions, the biggest problem Singh and his government seem to be facing right now is not the opposition or a frustrated middle class bogged down by double-digit inflation and price rise for most food products and essential commodities, but an ally who has been known to have her way within the UPA coalition.

West Bengal chief minister Mamata Banerjee’s Trinamool Congress holds 19 very crucial seats for the ruling alliance in parliament. So when she threatened to walk out of the UPA over the petrol price hike and sought increased communication between the Centre and allies before taking any vital decision, the first order of business for the PM after his return was to meet her and some of her party members.

To say, however, that she could not get a commitment out of him to roll back on the hike and that other allies within the UPA did not share her opinion, would be to miss the point. Even if one discounts the fact that she may have managed to get increased sops for her state out of this meet, the larger issue here is that the Congress finds itself on increasingly shaky ground as state and parliamentary elections come closer.

As if unpopularity among the general public and an assertive BJP was not enough, it may now need to deal with the prospect of unhappy partners ruining its chances in the upcoming polls. If it hopes to come back to power for a third term, the “Grand Old Party” of India has to ensure threats by Mamata and those by the DMK earlier this year do not become a regular occurrence.

The past few days have been quite busy for the government. As yet another spiritual leader started yet another "movement" against corruption in the government and bureaucracy, Prime Minister Manmohan Singh was at the chic French seaside resort of Cannes, holding discussions with heads of state of the G20 nations on how to deal with the crisis in Greece. Join Discussion

PM, Sheila Dikshit caught in the eye of another storm

By Annie Banerji

With greying hair, humbly garbed in a sari and a smile that adorns her grandmother-like appearance, 73-year-old Sheila Dikshit finds herself in the spotlight over the Comptroller & Auditor General’s (CAG) report, right after combating the Shunglu Committee report.

The CAG had hauled up the Prime Minister’s Office (PMO) for the appointment of Suresh Kalmadi, now in jail, as chairman of the Commonwealth Games Organising Committee in 2004 despite “serious objections” from within the government.

The auditor also held the chief minister of New Delhi culpable for her “active involvement” in causing a loss of almost $6.9 million in wasteful expenditure due to “irregularities”, “favouritism” and “bias” in sanction of contracts for projects in the capital’s beautification process last year.

The report also slammed the government on select projects that led to a loss of $111 million.

“We demand that Sheila Dikshit should resign, and if she does not, she should be sacked,” said Bharatiya Janata Party spokesman Ravi Shankar Prasad.

“Such huge allocations would not have been possible without the consent of the cabinet committee, cabinet sub-committee, group of ministers (GoMs), expenditure committee, finance committee and the PMO. Their role should be probed,” he added.

With greying hair, humbly garbed in a sari and a smile that adorns her grandmother-like appearance, 73-year-old Sheila Dikshit finds herself in the spotlight over the Comptroller & Auditor General’s (CAG) report, right after combating the Shunglu Committee report. Join Discussion