After FDI fiasco, Manmohan's lame-duck govt just got lamer

Even in the best of times over the past two-plus years, when the political momentum was working to its advantage, the Manmohan Singh government had been paralysed into inaction . Having started its second innings on the wrong note, with excessive hypersensitivity by the Congress to the maximalist, over-the-top demands from its allies, the government was rapidly reduced, by a string of corruption scandals, into a lame-duck arrangement that was only marking time for a passing of the dynastic baton. But after what is beginning to look like an embarrassing retreat on its most ambitious reform effort in this term – on the policy of permitting FDI in organised retail – the Manmohan Singh government may have become even more lame. [caption id=“attachment_145612” align=“alignleft” width=“380” caption=“A rollback of the proposal on retail FDI will reinforce the perception of the UPA government’s weakness. PTI”]  [/caption] In what amounts to abject surrender by the Congress to its allies – principally the Trinamool Congress and the DMK, which steadfastly opposed the FDI policy – the government appears to have decided to put the policy in cold storage. Although Pranab Mukherjee, the government’s pinch hitter and negotiator with recalcitrant allies, says the government’s stand will be formally made known in parliament on Wednesday, Mamata Banerjee has channelled his assurance to her that the policy was on hold for now. The opposition parties appear less than convinced that the government has in fact given up on its resolve to see the policy through. Until the government formally announces its retreat, they aren’t about to go easy on the government. They suspect that the government may merely be buying time to beat back opposition to the policy, and – just as it the earlier UPA government did after the Left parties withdrew support on the issue of the civilian nuclear deal with the US – may use the “cooling off” period to wear down opposition to the deal. All reforms in India happen only by stealth, and given the extremely contentious nature of the retail FDI policy and the spirited opposition from various segments of the political spectrum, this one too may require many backroom deals (and dirty tricks) if it is to be advanced. But unlike the nuclear deal, which wasn’t in itself an issue that found deep resonance with large sections of the electorate, the FDI in retail policy has already polarised the polity and proved emotive, with leaders milking it for political mileage with incendiary, over-the-top threats. To that extent, backroom deals may prove rather more difficult to finalise than was the case with the nuclear deal; even if such deals are reached, they will likely extract an extremely high price from the government. On the other hand, if the government does disclose on Wednesday that it is putting its policy on hold even if only for the moment, the perception that it cannot deliver on even the one issue on which the prime minister has, quite uncharacteristically, staked his firm resolve will be reinforced. It will also have the effect of shifting the power balance in the ruling coalition further away from the Congress and in favour of its allies. It will be seen to have rewarded the politics of maximalist opposition from the Congress’ allies, which in turn will encourage yet more bad behaviour from disparate constituents of the ruling coalition. Like sharks that have scented blood in the waters, these allies will be circling for yet more pounds of flesh. Power is all about perception, and today, the UPA government only conveys the perception that it is frightened of its own shadow. Its political instincts, which reflexively tend towards playing safe, will further be weakened if the message goes out that on the one issue on which it stuck its neck out with a bold policy initiative, it suffered a humiliating defeat. In other words, the lame-duck Manmohan Singh government may, going forward, become even more lame, and be crippled from taking anything but the most populist policy decisions in the hope that taking the path of least resistance will at least maximise its survival quotient. In every way, the UPA government is a dead man walking.