The ally who changed the game

Didi’s dramatic decision to withdraw her party’s support from the second United Progressive Alliance (UPA) coalition, thereby making the government headed by Manmohan Singh lose its majority in the Lok Sabha, has curiously made most important political players in the country rather pleased.

Unfortunately, however, for all those who have been gloating about the dramatic impact recent developments have had on India’s political economy, their euphoria is likely to be rather short-lived.
The countdown to the 16th general elections has begun. Many of the issues that are expected to influence the electorate are economic in nature. In this respect, by bringing into sharp focus the contentions and controversies relating to so-called “economic reforms”, Mamata Banerjee may be remembered as a game-changer in the country’s contemporary history.
Although the government lost its majority in the Lok Sabha with the withdrawal of support of the Congress-led UPA coalition’s largest constituent, the Trinamul Congress with 19 MPs, the pro-reforms section in the government seems to be overjoyed that the biggest perceived impediment to its neo-liberal policy agenda is out of the way. (For the record, the Prime Minister expressed sadness at the resignations of the Trinamul Congress ministers.)
Significantly, Ms Banerjee decided to part ways with the government not only on account of its refusal to roll back diesel prices, remove the quota on subsidised cylinders of cooking gas and disallow foreign investors to hold a majority stake in multi-brand retail enterprises; she also said she wanted to oppose the entry of foreign firms in the pensions sector.
The corporate sector is jubilant. The sensitive index of the stock exchange in Mumbai has jumped (though it is still below its January 2008 peak). The pink dailies are again writing gushing editorials about the government and no longer cribbing about “policy paralysis”. The rating agencies will now surely think more than twice before downgrading India’s sovereign debt to junk status. Who knows, perhaps the Economist, the Washington Post and Time magazine will all start lauding Dr Singh’s ardent resolve to push forward policies of LPG — not liquefied petroleum gas, silly! The acronym stands for liberalisation, privatisation and globalisation.
Ms Banerjee can justifiably claim that she is more “left” than the Left. Note how maverick CPI(M) leader and former West Bengal minister Abdur Rezzak Mollah publicly said his party’s arch rival deserved a “blue salute” — to match her party’s colour — for withdrawing support to the government on account of its “anti-people” policies. The West Bengal chief minister could take a leaf out of the book of the Left Front and blame the “unsympathetic” UPA government in Delhi for not approving a debt relief package that could spur the state’s economic rejuvenation. She is evidently optimistic that, despite her many blunders, the Communists will not regain lost ground in West Bengal in a hurry and that her party will win quite a few more than 19 of the 42 Lok Sabha seats it currently has.
Like Ms Banerjee, Samajwadi Party (SP) leader Mulayam Singh Yadav hopes to have substantially more MPs in the next Parliament. His party, the third largest in the Lok Sabha at present after the Congress and the BJP, accounts for 22 out of the 80 MPs from Uttar Pradesh where his son is the chief minister. Mr Yadav is surely loving all the attention he is getting these days, as he alternately blows hot and cold, supporting the UPA to keep “communal forces” at bay one day and breaking bread with the Left the next day, fulminating against the hike in diesel prices and opposing FDI in multi-brand retail.
His bete noire, Mayawati of the Bahujan Samaj Party, is also quite happy in the belief that the Congress needs her 21 MPs more than before, if for nothing else but to ensure that there is a second line of defence in case the SP plays too hard to get.
The BJP too is quite content at the discomfiture of the ruling Congress Party, despite the restiveness of at least two of its partners in the National Democratic Alliance coalition it heads. The Janata Dal (United), headed by Bihar chief minister Nitish Kumar, periodically conveys an impression that it wishes to chart an independent course, while the Shiromani Akali Dal (SAD) in Punjab is opposing FDI in retail only for the sake of form (as Walmart has already set up shop in back-end retail operations in the state with the Mittals). The BJP realises that it needs the JD(U) and the SAD more in their respective states than the allies need the principal Opposition party.
An important consequence of Ms Banerjee’s moves was to make the otherwise tight-lipped Dr Singh address the nation in a televised address, something he hasn’t done in quite a while. It is another matter that Dr Singh had nothing new to say. His repeated comparison of today’s economic situation with 1991 begged the obvious question: who does he hold responsible for the current state of affairs?
The government will not just survive over the coming months; it could well turn populist with a vengeance. Expect a new law on the right to food and a scheme for free distribution of medicines to the poor. Barring Ms Banerjee in Kolkata, Mr Yadav in Lucknow, Ms Jayalalithaa in Chennai and possibly, L.K. Advani in Delhi (though not his entire party), few MPs will welcome early elections. Still, elections could take place ahead of schedule, especially if a section within the Congress prevails on Sonia Gandhi (and Ahmad Patel) to cut their party’s losses — in other words, this section comes round to the view that the longer the government remains in power the worse it is for the future of the Congress.
Moves to form Telengana out of Andhra Pradesh could gain momentum. A Cabinet reshuffle is inevitable. But the ruling dispensation has before it the rather difficult task of convincing people to vote for it for a third time. The image of the UPA-2 has been tarnished by corruption. What is even worse as far as the electorate is concerned is the government’s abject failure to contain food inflation.
Ms Banerjee has correctly read the writing on the wall.

The writer is an educator and commentator