“Time for big bang reforms has come. If we have to go, we have to go down fighting,” Prime Minister Manmohan Singh reportedly told the all-important Cabinet Committee on Economic Affairs on Friday. There are strong words from a leader who till yesterday was being criticised for being mostly silent and presiding over a near-paralytic government.
His new-found determination reminds one of his grit when he relentlessly pushed for the Indo-US civil nuclear deal five years ago, to the extent of putting the survival of the UPA I government at risk. On Friday, at one go, he cleared FDI in multi-brand retail, civil aviation and broadcast besides announcing disinvestment in four blue chip public sector companies. The decisions also give a breather of a different kind: the headlines change from Coalgate to economic reforms.
Manmohan Singh drew the battle lines not just for the Opposition but also for allies by completely ignoring the Trinamool Congress (TMC) chief Mamata Banerjee‘s open and consistent opposition on FDI in multi-brand retail and civil aviation. The Trinamool, which was still fuming over hike in diesel prices and cap on subsidised LPG found a series of decisions on FDI as challenge to its position within UPA II.
It is not taking it lying down. First, Railway Minister Mukul will not attend Saturday’s full Planning Commission meeting chaired by the Prime Minister. Second, the party has given a 72-hour deadline to the prime minister to rollback on all counts —FDI, diesel and LPG . The Trinamool Congress Parliamentary Party will meet on Tuesday to decide on its future course of action.
TMC spokesman Kunal Ghosh sounded an open threat to the UPA leadership: “We are deeply offended and shocked. The government needs to respond to our demand otherwise, Trinamool Congress under leadership of Mamta Banerjee can take a strong action of any kind on Tuesday. We will decide our future course of action in that meeting.” He did not rule out pulling out of the government. “All options are open”, he said.
In the UPA coordination Committee held last month in Delhi, Mamata Banerjee had once again opposed any move FDI in retail and aviation. TMC has reasons to cry hoarse when it says it was not consulted, it was, in fact, completely bypassed.
The Congress’s intention of not to relent under allies pressure was clearly indicative in several responses made by Commerce Minister Anand Sharma at the media briefing. He named West Bengal in the list of the states, which opposed FDI in retail. Sample some of his comments: “I have spoken more than once to her on the subject. It is her perspective to implement it or not to implement it……Finding a consensus doesn’t mean unanimity, if unanimity were to be sought, we will have to wait in perpetuity and no decision will be taken….As I talk to you the decisions have global resonance.” As Commerce Minister, Sharma, of course, was keen to have it cleared by the Cabinet. It’s time for him to celebrate but Congress strategists will have to do some real firefighting with allies like Trinamool and outside supporter like the Samajwadi Party.
Interestingly, among the allies only the NCP has openly supported the FDI move. The entire Opposition, the BJP, JD(U), AIADMK and the Left Front are unanimous in condemning the government “Hasty decision. Even Congress-ruled states Kerala and Maharastra have not supported the FDI in retail. The list of states that have agreed to the proposal in writing is limited to Congress- ruled states in North-East, Andhra Pradesh, Assam, Haryana, Uttarakhand and Jammu & Kashmir.
The decision has, of course, made the industry very happy, but how the middle class, for whom the reforms are targeted at in the long term, responds will be seen later. How it is crucial now how the prime minister and his team are able to tide over the immediate political storm and bear its cost like they did in the nuclear deal.