When Prime Minister Manmohan Singh bit the bullet on September 14 and cleared the decks for global retail giants to set up shop in India, Congress leaders in Delhi just could not believe it. The party chief had, only in February 2007, gone on record against foreign direct investment (FDI) in retail. Since then that had remained the party’s policy.
Congress ranks had initially hoped that the party leadership would find some ways to circumvent the decision on retail, diesel and gas, at least until after the next elections.
But within hours their expectations were belied. Signals from 10, Janpath suggested that the decisions were here to stay. It took 11 days and two core-committee meetings for the Congress party to formally put its full weight behind the PM at the working committee. Before that, the party president held protracted consultations with her close aides and trusted colleagues — in all, about half a dozen of them.
New power equation
However, everyone seems to have overlooked the real import of the two crucial weeks in mid-September. Suddenly, the carefully crafted
Subsequent developments tend to reaffirm this stark reality. The PM has forced the hitherto all-powerful party chief to play second fiddle to him. He will set the agenda, and next elections will be fought on his reform showpieces such as retail revolution and dollar infusion.
The sweeping declarations by the PM and his Finance Minister P. Chidambaram to push the whole set of ‘big-ticket’ reforms points to this prospect.
In his address to the nation, Singh accepted full responsibility for the decisions. Even before the CWC’s formal endorsement, Chidambaram kept asserting no one could force a rollback.
Compare this with the power structure that existed before September 14. From the hard bargaining with the Left on the common minimum programme to the nuclear deal, 10, Janpath had maintained an umpire’s role.
As a result, the reforms brigade would repeatedly charge her with blocking Montek Singh Ahluwalia-led Planning Commission’s initiatives to truncate her welfare programmes such as Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), and the Bills on food security and healthcare.
Now the free hand to the PM’s team could alter the trajectory and future of these flagship aam aadmi programmes.
The power shift has induced subtle changes in party leaders’ behaviour. Now, more ministerial aspirants are flocking to well-known PM aides and corporate friends, than to Janpath.
The first victim of this tectonic shift in the UPA will be Sonia Gandhi’s public image as saviour of the poor. Besides, for the first time, the Sonia Congress has taken a decisive right turn from its aam aadmi -style Left-of-centre posture. In 2009, she relented at the last minute when the PM persuaded her on the nuclear deal. But after the Left’s exit, she zealously tried to retain the aam admi stamp.
Her National Advisory Council was seen as a parallel economic policy body. In 2009, it was her welfare schemes such as MGNREGS and the farm-loan waiver that had swung votes in the Congress party’s favour.
Electoral outcome
Now, Congressmen shudder to face an election without the crucial Sonia advantage. It is like Mahabharata’sKarna going to war without his kavach-kundal (mail armour). At election rallies, the Congress party’s USP has been Brand Sonia, not GDP-FDI statistics or grading by the ratings agencies. Congressmen cite how the Bharatiya Janata Party in 2004 fell victim to the elitist ‘Indian Shining’ poll plank. As against this, the Jairam Ramesh-coined aam aadmi did the trick for the Congress.
Congressmen, as they are, are not used to airing their feelings against the party. Hence, none openly expresses disagreement. Yet, just two days before the PM’s gambit, Union Minister for Science and Technology Vayalar Ravi had publicly objected to scrapping the 30 per cent sourcing norm for IKEA. FDI in retail was unthinkable even then.
Three days after the PM’s decision, a desperate Minister of State for Agriculture K.V. Thomas pleaded for a slab system for gas cylinders.
A few days before September 14, Rural Development Minister Jairam Ramesh had to seek Rahul Gandhi’s help to save the land acquisition Bill from colleagues such as Anand Sharma, Kamal Nath and C.P. Joshi. The grievance against them is that they allegedly wanted to dilute the Bill to favour the corporates.
This month, Ramesh protested to Chidambaram against fund cuts for Indira Awaas Yojana. Those such as Environment Minister Jayanti Natarajan and Health Minister Ghulam Nabi Azad have been opposing Montek Singh Ahluwalia on issues such as privatisation. Sections of media, that dub them as being of pre-liberalisation vintage, tend to dismiss them as ‘Sonia loyalists’.
Many of them have been persistently striving to salvage the essentials of the NAC-sponsored Bills. In the changed power equation, they are likely to avoid any further tussles with the powerful PM aides.
That apart, the Congress party is faced with a dire situation in the forthcoming elections. As of now, the odds seem stacked against UPA2. It needs to battle a series of scams worth over Rs 6 lakh crore, whichever way you interpret the Supreme Court’s pronouncements.
Some of these scams occurred under the PM’s direct supervision. Steep price increases and loss of jobs have enraged the middle classes and poor, Sonia Gandhi’s own constituency. ‘Electricity for every village’ after the nuclear deal has a pathetic ring to it, what with endless power cuts and steep tariff raise.
Antagonising masses
As part of the new reform push – forced power tariff hike in exchange for Central assistance; sugar de-control, enabling cartels to hoard and increase prices; and cash payment for curtailed BPL families in lieu of PDS foodgrain -- every section of voters is being alienated.
The Congress encounters a two-pronged resistance on the issue of foreign retail firms. At one stroke, the PM has offended the three crore small shops and their supply chain. Besides, there are hawkers and squatters. They have a wide network of customers along village streets and towns.
Delhi’s hard-nosed technocrats, under the pressure of lobbies, cannot even visualise the influence these grassroot traders enjoy among voters. When so many political parties and civil society groups simultaneously harp on the same issue, it will generate a multiplier effect on voters’ mind.
The establishment now highlights the ‘shopping experience’ FDI will bring. This elitism has come in handy for the opposition campaigners to stoke the ire of poorer sections and marginal farmers. Despite these developments, there are no signs of the party chief trying to reclaim the mantle.
(The author is a veteran political commentator.)