New Delhi: The Congress-led United Progressive Alliance (UPA), after dithering for 48 hours, finally nominated finance minister Pranab Mukherjee as its candidate for the presidential election, bringing to an end a prolonged bout of political brinksmanship that arose in the absence of a clear choice. But this may merely be the lull before more political storms ahead.
While his victory in the 19 July poll seems to be assured even if there is a contest for the post, the ruling Congress party and the UPA government that it heads may find that there’s a heavy price to pay for guaranteeing that Mukherjee becomes President despite serious internal opposition.
A finance minister of an opposition-ruled state said an immediate casualty could be a critical reform measure. He said there may be further delays in the goods and services tax (GST) that’s expected to be rolled out across the country by April 2013.
“It will take much more time now for the GST to be rolled out because the entire team in the finance ministry, with a few exceptions, may change,” said the state finance minister, on condition of anonymity. “Even though the standing committee is expected to table its report on the constitutional amendment by the monsoon session (expected to begin next month), we may not have a finance minister to push the Bill through in Parliament.”
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Mukherjee’s exit from the finance ministry will kick off a hectic round of lobbying as there are several aspirants for the post. However, with the government battling high inflation, falling investments, weakening growth and allegations of policy paralysis, there is speculation that Prime Minister Manmohan Singh will keep the portfolio with him. Meanwhile, Mukherjee’s elevation will also mean that the party and the UPA will lose the trouble-shooting skills of a seasoned politician who has access to political leaders across the spectrum.
A section of Congress leaders said the party will use the opportunity to reshuffle the government, which has also been accused of taking decisions that have clouded the investment environment, to give it a fresh lease of life ahead of the forthcoming state elections and the general election due in 2014.
The prospect of a new finance minister has triggered expectations in industry that many controversial decisions taken by Mukherjee that affected the corporate world adversely will be reviewed. These include proposals to make retrospective changes to tax laws, which could see companies having to pay levies dating back to transactions that are six years old.
Congress president Sonia Gandhi announced the decision on Friday after a brief meeting of UPA leaders, excluding key ally and West Bengal chief minister Mamata Banerjee, who heads the Trinamool Congress (TMC).
“Leaders of the constituent parties of the UPA met. It was decided to propose Pranab Mukherjee as candidate for the office of the President of India,”said Gandhi.
Banerjee, who had announced that former president A.P.J. Abdul Kalam was her candidate and that he would fight the election, left at noon on Friday without attending the UPA meeting.
She was isolated on the issue when the Samajwadi Party (SP), which had earlier joined Banerjee in announcing the alternative candidate names of Kalam, Prime Minister Singh and former Lok Sabha speaker Somnath Chatterjee, made a U-turn after the UPA announcement. Senior SP leader Ram Gopal Yadav said his party will back Mukherjee’s candidature.
This, along with the backing of the Bahujan Samaj Party (BSP) and the likely support of the Left parties, is expected to give Mukherjee a smooth ride to Rashtrapati Bhavan. BSP chief Mayawati has already announced her party’s support, while the Left parties are meeting on Saturday to finalize their stance.
It’s not clear whether the rupture between Banerjee and the UPA is irrevocable. Banerjee told reporters late on Friday in Kolkata that the “story is not over yet” and that “there are going to be more developments”. She said that whatever she has to say on the subject would be made public on Saturday.
Although the main opposition Bharatiya Janata Party (BJP) had initially proposed Kalam’s name, the party-led National Democratic Alliance (NDA) did not take a decision on the matter. “We will make an announcement later,” said L.K. Advani, convenor of the NDA. Although Kalam had indicated his willingness to be a candidate subject to wider consensus support, Mukherjee’s nomination may discourage him from standing.
Both the Prime Minister and the Congress president reached out to most of the political parties, including the opposition, seeking support for Mukherjee in the presidential election.
An electoral college of parliamentarians and legislators of all states elect the Indian President, the country’s highest constitutional position, which is albeit considered a largely ceremonial post.
Banerjee’s insistence that she would not back Mukherjee despite his being a Congress leader from West Bengal is seen as yet another manifestation of the strained ties between the ruling party and its ally, the TMC.
The Congress, which shares power with the TMC in West Bengal, has warned that it may walk out of the state government. The TMC has a majority on its own in the state assembly.
The political drama preceding the finalization of Mukherjee’s candidature signals that the UPA may have to rely on outside support from the SP, the BSP and others for the smooth functioning of Parliament and getting legislation through it.
Political observers also feel the development indicates a new trend in the Congress, which has a tradition of all decisions being taken by the party president. Gandhi, who reportedly had reservations about nominating Mukherjee, earlier told the TMC leader that she had two choices— Mukherjee and vice-president Hamid Ansari. “The announcement may appear to the people that Gandhi’s supremacy in the party has diminished. However, through this decision, the Congress president has shown the TMC its place. The TMC has been blackmailing the UPA leadership,” said N. Bhaskara Rao, a political analyst.
Rao, however, added that Gandhi has lost a chance to “set her house in order”. There were suggestions that the opportunity could have been used to replace Prime Minister Singh, who has been under severe criticism for his handling of corruption allegations as well as governance issues.
According to a person familiar with the development, Banerjee’s move to propose the Prime Minister’s name without giving Gandhi an inkling during their meeting seems to have provoked the Congress leadership to go ahead and announce Mukherjee’s name despite vehement opposition from the TMC.
An SP leader also said the party was “terribly unhappy” over Banerjee declaring Kalam as the candidate.
The choice of Mukherjee has bolstered the UPA’s position as well as that of the NDA, said political analyst G.V.L. Narasimha Rao.
“Two days ago, the situation was rather serious for UPA,” he said. “Had the race tightened up and NDA allies deserted BJP to put up their own candidate, that would have been bad for them, too. Mukherjee’s candidature has taken care of it.”
Remya Nair in New Delhi and Aniek Paul in Kolkata contributed to this story