PM as Achilles' Heel: Sonia's script went wrong in 2004

In the end, it was Mamata Banerjee who called Sonia Gandhi’s bluff, and not the other way round. Till late in the evening on Tuesday, Congress ministers were talking soft on the assumption that the Bengal Tigress would merely withdraw her ministers from the UPA government, but she went the whole hog and pulled out of the alliance. Sure, there is still a small chance that Mamata could return, but by pitching her demands very high – complete withdrawal of FDI in retail, rollback of diesel prices, etc -  she has essentially told the Congress to take a walk. The behind-the-scenes Sonia-orchestrated effort to isolate Mamata has backfired. The Congress thought Mamata needed UPA more than it needed her, but she has neatly turned the tables. By withdrawing support, she is saying: “I can do without you, but can you do without me?” The countdown for the end of UPA-2 has begun (actually it began in 2010, with the 2G scam, but we didn’t know it then). There is no certainty on how long the Sonia-Manmohan vaudeville act can be stretched. [caption id=“attachment_461031” align=“alignleft” width=“380”]  An opportunity missed? AFP[/caption] How did Sonia Gandhi get her script wrong? To be sure, she has got it repeatedly wrong. In 2004, 2008, and, more recently, in the post-2G scam period of 2010-12. Like every your-beauty-and-my-brains argument for tying the knot, the Sonia-Manmohan equation was a Faustian bargain where the mix of Sonia’s political clout with Manmohan’s economic wizardry worked negatively. What UPA got was Sonia’s economic wizardry (bad economics) and Manmohan’s political clout (bad politics). But let’s begin with looking ahead before looking back, now that Mamata has said her piece. The Congress party’s current political compulsions are clear: it needs to make big giveaways in the 2013 budget (food security, health insurance, et al), and it is to finance this profligacy that Sonia has agreed to the Manmohan-Chidambaram bravado on reforms for the next six months. Sonia’s assumption was that Mamata would roar, but not chew up the UPA. But this is what has come to pass. Worse, by opening up all her political cards – the references to the coal block scandal, FDI in retail, and the Muslim vote-bank – Mamata has, in fact, made it impossible for even the Congress’ remaining backers – Samajwadi Party’s Mulayam Singh and Mayawati’s BSP – to be seen as propping up the Congress unequivocally. Mamata’s gambit has effectively made every UPA ally wary of being too closely associated with the Congress’ follies – from corruption scandals to the inflation scenario – to the extent where even the DMK has begun distancing itself from the Congress (the pot being wary of the kettle?). It will be backing the anti-reform bandh tomorrow (20 September). The DMK has stuck with the UPA primarily to save its own skin – the 2G scam was all about DMK’s A Raja and M Karunanidhi’s daughter Kanimozhi and the Marans’ capers in the telecom ministry – but it now sees the Congress alliance as a potential loser in 2014. On the politically untouchability scale, after BJP it is now the Congress which has ascended the league. If the Congress’ fortunes are now tied to two jealous spouses, SP and BSP, not to speak of the half-abandoned DMK, it is anybody’s guess what will happen next. Its future will depend on the political compulsions of these three parties. It is worth looking at what the script could be. It is well known that Mulayam  Singh is more eager for early elections than Mayawati or Karunanidhi, primarily because he will gain and the latter could lose (or, at least, not gain). This leads one to conclude that if anyone will pull the plug first, it will be Mulayam Singh, and not Mayawati and Karunanidhi – who may prefer to make demands but not push the Congress over the edge. But Mulayam alone can’t bring down the government, unless he can rope the DMK into the act. The only issue on which both can unite is Mayawati’s quota-in-promotions plan. Both SP and DMK, with their OBC vote banks, are opposed to it, and would instead want to extend the quota-in-promotions plan to include OBCs. But in doing so, Congress will have to face a dent in its own upper caste votes, and could hand them over on a platter to the BJP. Of course, it will be possible for the SP to try and pull the rug on economic issues – of which there will be plenty, inflation and reforms being only two of them – in a difficult domestic investment scenario. Mulayam Singh’s best chance of doing that will come after the Gujarat and Himachal elections. If Narendra Modi wins, Singh can pull the plug and say he will be the best man to stop the Hindutva icon from becoming PM. If Modi does not do as well, it will be a signal to the SP boss that the Congress will be rejuvenated. He will then have to invent a quick reason for the exit before the Congress gets stronger. Either way, the winter session of parliament after the Gujarat elections will be the best time for Mulayam Singh to move. But this won’t happen unless DMK is also on board – which is something Congress will do anything to prevent. From this, we can conclude a few things – tentatively. The Congress will be living a charmed life from now on. And it will need to survive at least till the next budget to get its aam aadmi political story right. But since reform is not going to be a vote-winner, it will not be able to do much to turn the tide of business negativism from now on. The stock market optimism may be short-lived. The Manmohan Singh-Chidambaram reforms act is thus likely to sink in the sands of UPA-2’s declining popularity - even though the government itself may survive on the basis of day-to-day political compromises with increasingly demanding allies. Governance will take a beating as UPA panders to every passing pressure group to stay in power. In retrospect, Sonia Gandhi may well wonder is she backed the wrong horse for PM in 2004 – Manmohan Singh. His only strength was his loyalty, when his instincts were different from hers. It was widely reported in 2004 that she did not accept the job of PM because she had no lust for power. We now know this is not the case, for despite installing Singh as PM, real power stayed with her. Nobody is convinced otherwise. She probably didn’t accept the job since she didn’t want to head a minority government and take the blame for its failures. Manmohan Singh was the perfect fall guy. Let’s see with the benefit of 20/20 hindsight if the alternative scenario would have worked better for her. In this case, she would have become PM in 2004, and Singh would have been her high-profile reformist Finance Minister and Chidambaram her reformist Commerce and Industry Minister – almost the same roles they played in Narasimha Rao’s government of 1991-96. We didn’t know this in 2004, but the Indian economy was just about to hit the high notes and boom like never before. As presiding deity, Sonia would not have had to do anything more than what Singh and Chidambaram anyway managed to do in 2004-08. But she could have taken credit for the boom. She would have been a winner. In 2008, when the Lehman crisis struck, Sonia could have unleashed the goodies – farm waivers, the economic stimulus, etc – and claimed credit for these too. But, most important, given her welfarist leanings, it is highly unlikely she would have opted for the Indo-US nuclear deal. It was Manmohan Singh who pushed for it in the face of strident Left opposition. Sonia was more comfortable with the Left than the Trinamool Congress. In short, there would have been no withdrawal of Left support and the 2008 stimulus would have helped Sonia to induct Rahul into the party to oversee social sector spending, positioning him splendidly for the Prime Ministership. Once cannot also discount the possibility that the Congress may have done even better than its 206 seats in 2009 with Sonia in charge instead of Manmohan. By letting Manmohan appear to be the decisive leader of 2008 (in the nuke deal), she had to hand over the crown for political savvy to Singh, instead of claiming it for herself. Moreover, the Trinamool got the benefit of the Left’s failure in West Bengal at the cost of the Congress. In a three-way fight, the Left would have retained a lot of its seats, and the Trinamool would have got much less. Post-2009, the UPA would still have had Left support – and a more stable one at that. So let’s repeat what could have been Sonia’s report card, if she had been PM instead of Manmohan in 2004. One, she could have taken credit for the 2004-08 boom. Two, she could have taken credit for the post-Lehman spending binge. Three, with the Left as partner, she would have had the aam aadmi tag anyway. Four, she would have avoided the nuclear deal, which has turned out to be a pyrrhic victory for Manmohan – look at what is happening to nuclear power all over the world after Fukushima (Kudankulam, Jaitapur). In UPA-2, Manmohan’s reformist hankerings are again going to cost her her Left-of-centre image. Five, there would have been no perceptions of policy paralysis since her government would have been seen as essentially Leftist, and hence purposeful from that angle. She could have managed allies better. By letting Manmohan run the government, the government was seen as split between a Left heart and a Right brain – a freak creature. Both the politics and the economics of the UPA were managed badly as a result. The other side of the coin would, however, remain. There is little doubt that a UPA-2 under Sonia or Rahul would have been equally unable to tackle the slowdown-inflation crisis because it simply has no sensible answers. But then, does a Sonia-Manmohan dichotomous alliance have better answers? Clearly, Sonia’s script went wrong as far back as 2004. Given her inclinations, she backed the wrong horse in 2004. Whatever her loyalties, Manmohan Singh has led her to a dead end.