With Mamata Banerjee pulling the rug from under UPA's feet, the government has to run faster to avoid toppling over. Nowhere is this more apparent than in the economic sphere, where the window of opportunity is now closing rapidly as all political parties lose their appetite for reform.
On the assumption that there will be no parliament session before December, the UPA has to execute all its economic rejuvenation plans between now and November - or even earlier, before the Gujarat elections gather momentum in late-October- early November.
The best strategy for the UPA (or the Congress, in fact) in this scenario is to focus on reforms that don't call for any political backing, and this may be what the finance ministry may be about to unleash.
The first priority is clearly to avoid a sovereign rating downgrade (the next one will move India to junk status), and keep the foreign investment inflows coming. Without this, there is no chance of improving the budgetary gap (the fiscal deficit could rise to an unheard of 6.5-7 percent in 2012-13, careening out of control.) And without dollar inflows, the rupee will sink and make the deficit worse as oil import costs balloon in rupee terms.
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