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UPA II will survive Mamata’s withdrawal of support

September 18, 2012

The Trinamool Congress meeting lasted more than 3 hours. The media was agog with all sorts of ‘news’ filtering out from the Town Hall in Kolkota where the meeting was being held. The issues that were at hand and which Mamta Banerjee and her party top brass was discussing were the price hike of diesel by Rs 5, rationing of cooking gas cylinders and perhaps most importantly the Foreign Direct Investment that the government had allowed through an Executive order in multi-brand and single brand retail.

There had already been a lot of consternation in political circles by this bomb-shell of sorts that the UPA II government had unleashed at the political fraternity that is FDI in multi-brand retail. Most parties are still not sure whether this is a good move or a bad one. They are yet to decide whether it will be politically beneficial for them to back this decision of the government or to reject it. Most Congress ruled states have supported the move, as one might expect. Some of the non-Congress ruled states are in a quandary, like the Samajwadi Party and the AIADMK. They are not sure which way to go.  There is a hype that with big corporates like Carrefour and Walmart opening stores in India the common Indian kirana (Mom & Pop stores) will go bust. That is the bogey that is being thrown around by the opposition parties and they have called a bandh on the 20th of this month. Allies of Congress are wary about supporting the government on this contentious issue, with the kind of hype generated.

Mamta Banerjee’s Trinamool Congress is a crucial ally of the Congress with 19 MP’s. It is this numerical strength in the parliament that makes them so important. While it is true that the government will not fall if the TMC withdraws support the fear among the Congress top brass is that it could have a domino effect and other parties may also pull the plug on this coalition government. But those who believe that Mamata has withdrawn support from the government forget that the cunning lady from Bengal has left a window open for discussion. And it is a 72 hour window. The TMC MP’s won’t submit their resignations now. They could very well have faxed their resignation to the President immediately but they won’t. They will wait till Friday to tender their resignation to the Prime Minister. If they were really so keen on withdrawing support they should have withdrawn support immediately, but they won’t. Some media channels are shouting that Mamata Banerjee has closed shut all possibilities for negotiations. Nothing could be further from the truth. She has under her belt some important portfolios like independent charge of the ministry of railways and another  few ministers of states. It would be foolish on her part to throw away all this at this juncture when the general elections are almost 2 years away. Members of parliament do not want early elections. TMC MP’s are no different. They would much rather resign from a political party than face a mid-term election. And Mamata knows that. She thanked her party-men for supporting her decision of withdrawing support to the government. But has she really withdrawn support? 72 hours is a long time in politics.

Mamata’s politics is reactionary in nature.  She has this habit of looking over her shoulder to see what the Left is doing and then doing just the same so as not to let them steal a march over her. Left then finds it very difficult to criticize her politics as it is a replica of the position that they themselves had taken. Left’s rhetorical politics and posturing on ‘people’s welfare’ still has some buyers in West Bengal and Mamta does not want to give Left any leeway to criticize her. Many a times this is not prudent politics but that is how Mamata arrives at decisions and that is how she has decided on this one too. Remember the Left had withdrawn support to the government on the Indo-US Civilian Nuclear Bill and this time Mamata has withdrawn support on the question of FDI in multi-brand retail. Had the Left been in power in West Bengal with 19 MP’s perhaps they would have done the same. Left parties are supporting the bandh on the 20th of this month. Mamata has asked the people of Bengal not to have a bandh as that affects the livelihood of the common man, which is a departure from what the Left is doing for once and a smart move to make the Left look silly.

Mamata’s unexpected decision to ‘withdraw’ support from the Congress led UPA has made other allies sit up. They know that they are more valuable to the alliance than ever before. News filtering from media houses suggest that there is a proposed meeting between Alagiri of DMK, Praful Patel of NCP and a representative of the BSP in Mumbai on the 21st of September after the Bandh. All these parties find themselves in a position where they can bargain some more from the Congress. The interesting thing is that the meeting is well after the Friday deadline given by the TMC to the government.

Meanwhile Sonia Gandhi, the chairperson of the UPA has reacted to the Mamata bombshell by saying that she will meet the prime minister and talk about issues raised by the allies – hinting at TMC. Clearly, Sonia Gandhi knows that Mamata can be brought around and it is time for fresh negotiations. The truth of the matter is that apart from the Samajwadi Party  which wrongly fancies its chances if there are early elections no other party including the TMC would like mid-term polls. Congress knows that it is doomed if there are mid-term polls and they are not able to carry out the reforms to rejuvenate the economy before facing elections. The issue of corruption is biting them hard with Coalgate very much in the consciousness of the nation. And if they were unable to see through the contentious FDI in retail and elections are announced they will be seen to be pandering to foreign powers and falling because of it which will be harakiri for any government. Sonia Gandhi and the Congress cannot let the government fall now. That would be a doomsday scenario.

Yet Sonia Gandhi and Manmohan Singh know very well that the implementation of the reform process is crucial to their long term political survival. They want a buoyant economy when they face the electorate in 2014, for which reforms are a must. Mamata would not mind an election but her party men are just not interested in mid-term polls. This announcement of withdrawal of support is to negotiate from a position of strength. Manmohan and Sonia won’t backtrack on FDI in retail and that is amply clear. The government has left it on the states to accept or reject FDI in retail in their respective states. And this is perhaps how Mamata will wriggle out of a crisis created by her own self. She will get the government to roll back a couple of rupees in diesel price hike, increase the subsidized LPG cylinders to 12 per year or perhaps make the government do away with quotas in LPG cylinders all together. And then she will declare that her party will not allow FDI in retail in West Bengal. Her ministers will be happy to retain their portfolios and perhaps Mamata might squeeze another couple of ministries from Sonia Gandhi and claim that as a victory of the people of Bengal. DMK will also milk this opportunity for all it is worth and get some more from the Congress. I will not be surprised if as I write the negotiations are on and bargaining is in full swing.  BSP and Samajwadi Party can be blackmailed by the Congress into submission. CBI is a Damocles sword hanging on the heads of Mulayam Singh Yadav and Mayawati and they can’t do much. DMK and NCP will try and get some more out of Congress now that they are cornered. Congress knows that TMC ‘s withdrawal will not result in the government finding itself in a minority but TMC’s support is important as it gives them a cushion and keeps other allies at bay. Otherwise the government will be hanging by a thread and working with such wafer thin majority can get tenuous.

Politics is a game of numbers.  Mamata has done her arithmetic. Congress wants to survive till 2014 and then face the people. A government that has lasted a full term has more credibility than one which is forced into mid-term polls. Political compulsions of political parties is such that mid-term elections can happen only in extraordinary situations. Mamata’s ‘withdrawal’ of support cannot be bracketed as one. Besides as Nitish Kumar remarked that Congress’s ability to tinker jugaad will see them through and elections will be held as per schedule in 2014. Those who are looking at mid-term elections are underestimating Congress’s jugaad prowess.

I hate to say this but I guess I must. There are forces over and above these political parties that will see to it that the reform process that has finally been somehow kick started by Manmohan Singh does not falter. It is strategically important for the region that the reform process chugs along nicely. This government cannot fall on the issue of FDI in multi-brand retail. People are underestimating the seriousness of the situation.

Update 23.09.2012: Mamata was pushed into a corner, rather painted herself into one and could not retrieve the situation. Mamta had reckoned Congress would cajole her, would roll back diesel prices etc. for her to come back but that did not happen. Instead, one day before the Friday deadline government notified FDI in multi-brand retail which was the final stamp on the exit of Mamata from the government. Repeated interviews to the press, mostly casual, by her satraps like Mukul Roy and Sugata Ray did not impress the Congress. The die was cast and at 4.30pm one and a half hours later that the scheduled 3pm deadline TMC MP’s and ministers met the prime minister and tendered their resignation. They then went to the president and registered their angst against the government, requesting him to call a special session of parliament.

Why did the Congress play tough and almost asked the TMC to leave? The answer lies not in the present decisions but the reforms that they plan to undertake in the months to come. They concluded that it would be impossible for TMC to support the government on what was to come and that includes banking reforms, insurance, pension etc. They realized that a roll back of diesel prices and recalling TMC would be imprudent and a hindrance to future reforms. Congress’s resolve on the question of reforms stems from the new lease of life that FDI in retail etc. have given the government, The Sensex has jumped more than 450 points in one days trading. The PM also addressed the nation and reiterated his governments resolve on continuing on the path of reforms. Reforms are an economic necessity and perhaps more importantly a question of political survival. With BSP and SP giving support from outside Congress has the luxury of more portfolio’s under their belt – for one, the Railways is now with the Congress and that could be critical in an election year. Congress plans to ride on a wave of reforms into 2014 elections. If reforms do give the economy the impetus Congress reckon they would, then the UPA fancies its chances in 2014. BJP lead opposition already looks a tad ruffled and unsure of itself. In such a situation, if Modi wins a third time in Gujarat he will become the only hope for NDA’s march towards Indraprastha.

A Small Note:

This is the 200th post on this blog. This is another small milestone of sorts. Gives me great pleasure and satisfaction that I have been able to keep doing what I love to do. It is also nice to get feedback from my readers, some regulars. Thanks to all those who find time to read and to those who get down to comment – I thank you all.

3 Comments leave one →
  1. Paul Clausen permalink
    September 20, 2012 10:30 am

    Congrats on reaching this milestone! I am sure many of your followers look forward to many more articles on your blog though entry into mainstream media might be a good idea for a person of your caliber!

  2. October 2, 2012 5:57 pm

    you have got an awesome weblog right here! would you wish to make some invite posts on my weblog

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