New Delhi: The Congress party on Wednesday signalled a relaxation of its stance on one of the economic measures the government announced last week, in a bid to narrow differences with friendly parties and plug the deficit in Parliament, with the Trinamool Congress (TMC) unbending in its resolve to leave the ruling coalition.
The Congress directed state governments run by it to ease a six-cylinder limit on subsidized cooking gas by footing the bill for an additional three.
Political analysts said the Congress-led United Progressive Alliance (UPA) government didn’t seem to be considering any change in the plan to allow foreign direct investment (FDI) in multi-brand retail, making the prospect of any rapprochement with the TMC remote.
The day’s political events were dominated by TMC chief and West Bengal chief minister Mamata Banerjee’s press conference in Kolkata, at which she reiterated her opposition to the government’s measures, a day after she announced the withdrawal of support to the UPA government.
“I will stick to my position, come what may,” Banerjee said. “The (TMC) ministers will tender their resignations.”
Apart from the cooking gas cap and FDI in multi-brand retail, Banerjee is also opposed to the Rs.5 per litre increase in the price of diesel.
“Minimum 24 (subsidized) cylinders should be given to a family in a year. How many times you will keep raising the petroleum prices? FDI in retail should be withdrawn,” she said. “FDI we are not (supporting)... We will organize protest everyday.”
She said West Bengal wouldn’t be able to afford to foot the bill for additional subsidized gas cylinders.
“All this drama is of no use. The state cannot afford to lose so much money,” she said. “Reforms come from the grass roots, it cannot come from the sky.”
Banerjee, whose ties with the Congress since the UPA returned to power in 2009 have always been prickly, accused the ruling party of “distorting facts” and causing confusion. Analysts said the TMC leader appears to have killed off any chance of a return to the UPA.
“My reading is that she has taken a decision which she did not want,” said B.D. Ghosh, a senior fellow at the Kolkata-based Institute of Social Sciences. “However, in this situation, she herself closed the doors. The Congress does not seem to be in a mood to go and appease her again, because this is the chance it has to show that it can govern.”
Balveer Arora, a former head of the political science department at Jawaharlal Nehru University, said, “She used harsh and intemperate language, and it is difficult to retract. The govern ment is not willing to concede, too.”
All of Wednesday, the ruling Congress party’s leaders debated the strategy to be adopted to stave off the crisis brought on by the TMC’s withdrawal of support that turned the UPA government into a minority in Parliament.
Another coalition ally, the Dravida Munnetra Kazhagam (DMK) will join an anti-government strike on Thursday, but said it won’t abandon the UPA, while a member of the opposition said it could be open to supporting the government under certain conditions.
Industry leaders, meanwhile, have asked the government not to give in to the demands of Banerjee and carry forward the reform process.
Biocon Ltd chairperson and managing director Kiran Mazumdar-Shaw tweeted: “Mamata Didi is a maverick politician who depends on a vote bank of poor people. Her economic agenda is not aligned with strong economic growth.”
Mahindra and Mahindra Ltd chairman Anand Mahindra tweeted: “Again, we urge the govt to stand its ground. Right-thinking Indians will be less than amused by partisan politics in a fragile economy.”
Congress general secretary Janardan Dwivedi said party-ruled states have been asked to increase the supply of subsidized cooking gas cylinders to nine per household annually from six. On 13 September, the government increased the price of diesel and capped the cooking gas cylinder allocation at six.
According to a Congress leader familiar with the developments, the party’s leadership is focused on ensuring safety in Parliament rather than working out a compromise formula with the TMC.
Arora said, “The Congress is now looking for numbers. Other than the friendly parties, it is also working to strike a deal with other parties.”
The Congress leader added that the party is giving final touches to its formula to resolve the crisis in Andhra Pradesh over the campaign for a separate Telangana state. “The party leadership is convinced that there is no other option, but to give in to the demand for a separate Telangana state,” he said.
The Samajwadi Party (SP), on which the Congress is banking on heavily for survival, said its leaders will decide the strategy on Thursday. The SP will, however, be taking part in a nationwide shutdown against the diesel price increase.
The SP is the ruling party in the politically crucial state of Uttar Pradesh, which sends the most number of lawmakers to Parliament. The other key Uttar Pradesh party, the Bahujan Samaj Party (BSP), will only meet on 10 October to decide on its course of action.
The Congress would have been pleasantly surprised on Wednesday by Bihar chief minister Nitish Kumar saying that his Janata Dal (United), or JD(U) would support any grouping that granted the state special status, a long-time demand. The JD(U), a part of the opposition National Democratic Alliance led by the Bharatiya Janata Party (BJP), has 22 members in the Lok Sabha compared with the TMC’s 19.
“Whoever supports special status for Bihar, we will support them at the Centre,” Kumar said, addressing a public rally in Bettiah, Bihar.
Senior BJP leader L.K. Advani told PTI that his party would like a special session to be convened to discuss this issue, holding that the government had committed a “breach of trust” of Parliament. The BJP said it will consult its allies after the nationwide agitation on Thursday before firming up its position.
“Yesterday’s development has destabilized the present government. The present government cannot last its full term till 2014. Anything can happen before that,” Advani told PTI.
Although ally DMK will join the national strike on Thursday, its leaders indicated that the party would not embarrass the UPA government. Communist Party of India (Marxist), or CPM, general secretary Prakash Karat said the recently announced reform initiatives did not have the “support of parties across the political spectrum” or Parliament. “The Congress-led UPA government does not have the mandate or the right to push ahead with these policies,” Karat said. However, he maintained that the CPM did not want anyone to topple the government.
Meanwhile, the meetings of the Congress party leadership on building support were held at Prime Minister Manmohan Singh’s residence and attended by party president Sonia Gandhi, political secretary Ahmed Patel, defence minister A.K. Antony and finance minister P. Chidambaram.
Congress leaders put a brave face on the events. Information and broadcasting minister Ambika Soni said the UPA had the numbers to stay in government. In the Lok Sabha, which has an effective strength of 542, the Congress has 205 members and the UPA’s strength without the TMC is 254. Without the TMC, but adding the SP’s 22 members, the BSP’s 21 and the Rashtriya Janata Dal’s four, this will add up to 301.
Earlier in the day, the party’s core committee discussed various options, according to a person familiar with the development. Apart from suggestions on raising the cap on subsidized cooking gas cylinders, the leaders also discussed a formula suggested by food minister K.V. Thomas. He proposed that beyond the six cylinders distributed at the subsidized rate of around Rs.400, the subsidy be tapered off. For the next 7-12 cylinders, households should pay Rs.50 more, the 13-24 slab will attract Rs.150 extra, and for anything above that, buyers should pay the market rate of around Rs.750.
The Union cabinet on 14 September took a number of decisions, including allowing 51% FDI in multi-brand retail and relaxing a key condition on 100% FDI in single-brand retail, opening the aviation sector to foreign airlines, and announcing a round of divestment of government stock in state-owned firms.