If there hasn’t been any major voice of protest from within the Congress against the reform measures announced last week, party sources attribute it to the complete unanimity between Congress president Sonia Gandhi and Prime Minister Manmohan Singh on the subject.
Govt brings in FDI changes, industry welcomes move
"Sonia Gandhi supports the Prime Minister completely,” a party leader said.
The government had waited until the Parliament session got over before the flash announcements last week, which included allowing FDI in retail and capping the number of subsidised LPG cylinders at six a year. Though the Prime Minister was convinced that this was the way ahead a long time before it actually happened, the announcement had to wait until internal politics became conducive.
The unrelenting global economic crisis convinced a Left-leaning section within the party that there was not much scope for bickering at this stage, and liberalisation and expansion of the economy was inevitable. But the countdown actually began after the exit of Pranab Mukherjee from the finance ministry.
Some of Mukherjee’s decisions, particularly on retrospective taxes and the general anti-avoidance rules, were not favoured by the Prime Minister and then home minister P Chidambaram. But there was not much they could do, given the seniority Mukherjee enjoyed in the cabinet.
Pushed to the wall with those accusing the government of policy paralysis and a sluggish economy, the question was no longer whether, but when. However, even after Chidambaram took over as the finance minister by July-end, the government had to take coalition risks into account.
An analysis of the situation showed that unless the Trinamool, Samajwadi Party and BSP collectively withdrew support, the government was not in any immediate danger. However, the likelihood of all the three parties acting in tandem seemed remote.
FDI in retail, meanwhile, puts the BJP in a peculiar dilemma of having to balance its local trader interests with the aspirations of its middle class constituency. It also divides the National Democratic Alliance, with the Akali Dal-led Punjab government doing a flip-flop on the issue.
Sources say the government will now focus on addressing two issues — first, reclaim more political capital by speeding up the food security law and other welfare measures, and second, induce speed and immunity from reckless allegations in governmental decision-making.