India Insight

Mamata Banerjee: I’ve got Friday on my mind

September 19, 2012

Mamata Banerjee‘s threat that her ministers would quit on Friday unless the Indian government scrapped its plan to save the economy was her way of giving the government time to consider its options.

I told my colleague Aditya that in reality, it was probably a chance for her to reconsider her move because there was no way that the government would bend to her desires.

That’s not the most auspicious start to an American journalist’s attempt to call outcomes in Indian politics. The government’s reform plan, from which there was to be no retreat, no surrender … is in retreat.

The plot outline is simple: India must take urgent steps to fix its tottering economy, or risk a debt rating downgrade and other economic indignities that could lead to its worst financial crisis since 1991 when it had to ship all its gold to England and Switzerland to secure a loan to stay in business.

The United Progressive Alliance, a coalition government led by Prime Minister Manmohan Singh, dropped a bunch of bombshells last week including:

  • allowing foreign direct investment in multi-brand retail (up to 51 percent)
  • capping the subsidy that the government pays on cooking gas
  • raising diesel prices by 5 rupees a litre
  • allowing more foreign investment in media companies (from 49 to 74 percent)
  • allowing more foreign investment in airlines

Banerjee says the diesel move in particular will make life harder for hundreds of millions of poor people and demanded that it be removed. Her leverage: if the UPA didn’t do what she wanted, she would pull her party out of the alliance. This would hurt the Congress party’s chances of winning the next general elections in 2014, and could force early elections and the resignation of the prime minister.

With that in mind, Reuters reported that the Congress party might scale back the diesel price rise to 3 or 4 rupees a litre. Keep in mind that even 5 wasn’t sufficient. When Singh said, “if we go down, let’s go down fighting,” he might have meant it, but someone in the past 24 hours has edited that sentence to read, “If we go down, let’s go down.”

You might think: if my country is in danger of economic collapse, isn’t the duty of the government to do whatever it takes to save it, including jeopardising its chances of remaining in power — a noble sacrifice to preserve the land we love?

It might be, but for all politicians, the goal is to win, and remain, in office.

Banerjee knows that, and surely is aware that it’s not hard to frighten Singh’s Congress party and its chief Sonia Gandhi with the vision of its main opponent, the Bharatiya Janata Party, steering the ship of state. It’s also a long shot to expect that other political parties could give Congress the power that it needs to replace the Trinamool Congress as an ally.

If I were a reporter covering this story, and I were able to avoid getting sucked in to the minor plot twists and sideshows, I would want to know one thing: why would the UPA, knowing that the chances of Banerjee freaking out were nearly 100 percent, panic and retreat? If I could interview Manmohan Singh, my first question would be: why is your party’s political supremacy worth more than your country’s future?

I understand that these questions might seem obvious and rhetorical, and maybe even doltish, but I’ll chalk it up to my beginner’s discount.

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