Parties' Frenzy for New Alliance Partners

by P RAMAN
Posted on 2009-01-09
IT is now five months since prime minister Manmohan Singh got ‘liberated’ – as per his own words – from his erstwhile Left comrades. While the UPA government is set to complete its full term without any major hurdles in May next, the PM’s travails with the Left have a touch of comic (or tragic?) irony. The Left’s formal walkout on the government came on July 22 last. And within just three months, all major irritants that had led to the final break-up with the Left, had also vanished. This had virtually rendered much of the three-year-long acrimonious wrangling with the Left a more or less vain exercise.The main issues at dispute with the comrades were privatisation of PSUs, labour law amendments to allow hire and fire of the workers, higher FDI cap in banks and insurance and strategic partnership with the US and the nuclear agreement. The PM was first obliged to push ahead with all such measures despite the Left protests and then from October last began playing them down – both, incidentally, on global compulsions. The abrupt global capitalist tsunami has pushed all such issues into the background. As against privatisation of the PSUs, governments the world over are investing huge funds from the taxpayers’ money in the failed private corporate conglomerates to save them from
liquidation.
The US alone has so far pumped in government money worth $1.5 trillion in private corporate firms. India just cannot do so because we simply do not have that much funds to spare. Hence India took to the next best available options of tax cuts to private business and forcing PSUs to make available easy credit and cheaper inputs even if it meant further strain on them. Aviation fuel prices has been cut by the PSU oil firms by as much as 60 per cent in eight installments. Tax cut has already led to over 32 per cent rise in Centre’s budget deficits.
Public sector banks and financial institutions, which the government wanted to be sold to the corporates, have suddenly become the only available instruments in its hands to rescue the collapsing business institutions. It was this crisis that had forced the PM to drop his post-July roadmap for quicker privatisations. As of now, the UPA government will wait and watch to see how the US itself tackles the complex problems. Insurance bill has been the only reform measure the government tried to push ahead. Why this was taken up at this state still remains a puzzle. For, the MNC insurance giants who were to benefit from the proposed raise in the FDI cap, themselves have now expressed disinterest in Indian proposals.
This is because all of them, especially of the US and South Korea, are crippled by the ongoing financial collapse. The way the PM personally intervened in the case of airline staff’s sacking reveals the UPA’s poll-eve cold feet on the labour bill. Now Jairam Ramesh says the amendment to the Nuclear Act to allow private operators like Tatas and Reliance in nuclear power generation will be delayed by ‘six to seven’ years. Even the strategic partnership with the US, has remained on paper in the ongoing confrontation with Pakistan. If this is how the Bush administration treats the strategic partner, the fate under Obama is still in the realm of speculation.
The question is: What might have happened had the showdown with the Left been delayed by another ten weeks, say from July 22 to October? The issue may look rather academic. But not for a pragmatic section of leaders within the UPA. True, the question at stake at that point of time was the signing of the deadline-bound nuclear deal. And there was no way for a compromise between the US-imposed schedule and the Left threat to withdraw support. The PM chose the first and others stood by him. Many in UPA and some in the Congress now remorsefully refer to this as a collective lapse and quirk of destiny.
All that remains after the July 22 showdown is the UPA’s ‘loss’ of the one-fifth of its original strength. Vajpayee had always realised the centrality of the core allies of a coalition The BJP did every thing to meet their basic demands. Now the moot point is: can the Samajwadi solution neutralise the Left ‘loss’ after May elections? None of the in-house poll surveys by the political parties have so far visualised a majority for the existing UPA
or NDA.
This has also been the message of the recent state assembly polls and by-elections. In private talks, political leaders concede that the 15th Lok Sabha is going to be the most fractured. Few can predict the kind of post-poll realignments and frantic scramble for allies. Even the rules of coalition could change to suit the emerging opportunistic requirements as it had happened during the past decade, if the Left had backed the Congress at the centre and opposed in states it was on ideological ground, not for power. But can we rule out a situation where the JD(U) or BJD joining or heading a third alliance government even while keeping their respective coalitions with the BJP in states?
Yet don’t be surprised, this kind of worst coalitional opportunism may also get political legitimacy from parties. Until the Shimla decision, the Congress has been doggedly sticking to the Pranab-sponsored ‘no-coalition’ Pachmarhi thesis. In 2004, the party realised its folly and in a few months got back to power at the centre. Sections of Congressmen see a similar situation now where the party may lose power due to its leaders’ outdated economic Puritanism and outside pressures that had ended in the ouster of the 60-MP
Left group.
If the various post-May projections are any indication, even in the best-case scenario the UPA will be short of 40-60 MPs. If this happens, the UPI may even need the support of both SP and Left for a majority. With the elections just three months away, political circles are already talking of all sorts of permutations and combinations. Frantic moves are afoot to rope in all possible alliance partners. Since the UPA may still emerge as the largest group, it will once again be faced with the deal vs power dilemma.