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UPA wins, setting stage for either pay-offs or reforms

UPA wins, setting stage for either pay-offs or reforms
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First Published: Wed, Jul 23 2008. 08 06 AM IST

Updated: Wed, Jul 23 2008. 08 06 AM IST
New Delhi: Political uncertainty in India ended for the time being after the ruling Congress-led United Progressive Alliance (UPA) government won a trust vote on Tuesday, paving the way for what some analysts predict could be up to 8-10 months of a pro-reforms administration.
The more optimistic expect the Manmohan Singh government to push ahead with key economic reforms that were stymied in the four-plus years of its rule by former ally, the Left Front.
The somewhat comfortable victory — 275 members of Parliament voted in favour of the government with 256 opposing — sharply increases the chances of the Indo-US civilian nuclear deal clearing all stages it needs to before being implemented, including approvals by the International Atomic Energy Agency, the Nuclear Suppliers Group and the US Congress.
The vote was a result of the Left parties pulling their support in opposition to the nuclear deal.
The Left Front had held up key reforms, such as disinvestment of the government’s stake in public sector firms, pensions reform and the banking reforms Bill, and raising the limits on foreign direct investment in several sectors.
But despite its win, the government, however, is likely to be cautious about which Bills it tries to push through Parliament because the so-called money Bills (those that involve economic reforms) are akin to trust votes and the failure to secure majority support for one will mean the government would have to resign.
Still, late Tuesday evening India time, shares of several Indian companies rose in early US trading, a sign of what might be in store when the stock markets open on Wednesday.
At around 8.30pm on Tuesday, Lok Sabha speaker Somnath Chatterjee announced that the UPA had won the trust vote 275 to 256. It needed 272 to stay in power.
Any real debate on the trust vote effectively ended a little after 4pm when three members of the Bharatiya Janata Party (BJP) alleged that they had been promised a total payout of Rs9 crore by the Congress’ new ally, the Samajwadi Party (SP), to abstain from voting and actually paid Rs1 crore as advance.
The members placed the money in the well of the House, and the ensuing chaos meant that the House had to be adjourned.
When it reconvened at 6.30pm, a few members were allowed to speak, and the Prime Minister then decided to submit his defence instead of reading it out.
On Tuesday evening, industry lobby Ficci said that its president and member of Parliament Rajeev Chandrasekhar would propose to the Prime Minister “a 10-point agenda to move the reforms effort forward in a major way”.
“Once these flurry of reforms are undertaken, the confidence level, which had been dropping over the last three quarters in the Business Confidence Survey of Ficci, will bottom out and will put the economy back into a growth trajectory,” Chandrasekhar said.
Still, the government’s ability to push through economic reforms will depend on how well it manages its new allies, including the SP, and theirdemands.
The government will also have to manage the fallout of its victory, including the compromises it has made in bringing back into its fold, politicians such as Shibu Soren, an accused in the murder of his personal assistant, who islikely to get his old cabinet berth back.
The two-day debate on the trust motion also saw Singh, increasingly seen as a significantly diminished Prime Minister, in a new, aggressive avatar. He accused the Left Front of wanting to call all the shots in the government and said: “They wanted me to behave as their bonded slave.”
The trust vote, however, has seen the emergence of a new political coalition of non-Congress and non-BJP parties, with the Bahujan Samajwadi Party’s Mayawati playing catalyst.
By claiming that the agreement with the US was “anti- Muslim”, Mayawati had not only managed to undermine the SP, but also managed to spread her political appeal beyond Uttar Pradesh and her traditional constituency of Dalit votes.
The grouping is scheduled to meet on Wednesday to discuss its next game plan.
According to the leader of the Communist Party of India Gurudas Dasgupta, the BJP saw two representatives being absent and four voting against the party whip and in favour of the UPA, the Telugu Desam Party saw one member voting in favour of the motion, and the Janata Dal (United) saw one representative being absent and one voting for the motion.
ashish.s@livemint.com
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First Published: Wed, Jul 23 2008. 08 06 AM IST