The Manmohan Singh government has landed itself in a frying pan. The policy trade-offs it faces with changing political equations are unappetizing, to say the least. The choice is between the Left’s don’t-go-nuclear ultimatum and the Samajawadi Party’s (SP) very specific, suspicious demands. Friends change and new friends do come to one’s aid, but there’s no free lunch.
When it was in the company of Leftists, economic reforms were taboo. Any legislation that remotely smacked of liberalization (pension reforms, opening up of the insurance sector, etc.) was stalled. Today, the SP and its 39 MPs are a lifeline to the United Progressive Alliance (UPA) government as the Left may pull the rug anytime. The new friends, however, want something in return.
For starters, they want a windfall gains tax imposed on private petrol refiners. More seriously, they want the heads of petroleum minister Murli Deora and finance minister P. Chidambaram (the later because he “created” inflation). SP leader Amar Singh has publicly argued against the two ministers. As this paper had said earlier, there’s little or no logic behind the windfall gains tax. As for removing the two ministers, there’s more than mere concern for the common man that’s at work.
When these demands are looked at carefully and the persons whom it will affect, there’s more than what meets the eye. The SP’s political base is largely confined to Uttar Pradesh (UP). Its concerns centre on that state (fight with Mayawati, retaining the Muslim vote and so on), while the demands on windfall tax and inflation supposedly concern all citizens. Why has the SP broadened its horizons now with these demands when it’s at the receiving end in UP? Normally, its focus would be UP and UP alone. Many believe that these recommendations have their roots in business rivalry.
If the UPA government succumbs to these pressures, it would be worse than what the Left ever demanded. What the Left proposed could have (and partially did) caused damage in many ways. But what the SP is demanding is nothing but blackmail by other means, much worse than what the Left did.
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