NEW DELHI, 18 July 2004 — You can’t get the right answer if you ask the wrong question. What is the wrong question: “How long will the Manmohan Singh government last?” What then is the right question? “How long will this government function?”
Governments have lasted before without being able to function, so there is no reason why they should not do the same again.
This government consists of two kinds of partners. Allies like the DMK and the Telangana Rashtriya Samiti, who have no specific antipathy to the BJP, believe that their political demands will be honored by this alliance.
The TRS is convinced that it will get a separate Telangana state after November, and is ready to wait. The DMK is certain that present equations will ensure victory in the next Assembly elections in Tamil Nadu. The bulk of partners are united by a single desire, to keep the BJP out of power, and, irrespective of differences, that motivation has not weakened.
The Marxists may be genuinely upset by the budget proposal to increase foreign direct investment caps in insurance and telecommunications, but this does not mean that they want to open the door to the BJP.
And yet when an important Marxist like Sitaram Yechury warns the government that it cannot take support from the Left for granted, it is a wake-up call. A familiar of history is the king who reigns but does not rule.
A government that functions is obviously something more than a bureaucracy that administers. Its purpose is defined by the direction it sets, with the economy as the key to the future.
The decision to raise FDI caps in selected industries, and divest a further 5 percent in NTPC was critical in terms of the parameters that the Manmohan Singh government wanted to establish. The signal was that it would not be hostage to the well-known views of the Left.
The Marxist response could have been perfunctory, or vehement without being serious. It became serious because the FDI cap on insurance was raised. Why is insurance so important?
It is common knowledge that a former ambassador of the United States, Frank Wisner, resigned from the State Department after his tenure in Delhi to become a vice chairman American International Group (AIG), with a specific brief: To open up the Indian market to American insurance companies. Lobbying is still an impolite word in Delhi, but a perfectly respectable one in America. Wisner has spent substantial chunks of his time in India working the system to influence policy, including during the preparation of this budget.
Insurance companies hold perhaps the largest resource of capital outside banks. This money comes from that well-known person, The Common Man, who has invested against the uncertainty of post-retirement years, or as a legacy to his family in case of death. (Life insurance is a misnomer, or a ‘semi-nomer’; death insurance is the more lucrative part of the trade, but the term is not used because of the feel-bad factor.) A company like Life Insurance Corporation (LIC) sits on massive resources that are an obvious temptation to men who influence the economy by their control of capital.
Former Prime Minister Indira Gandhi nationalized private banks, to wild applause from the Left, because she wanted to shift control of banking capital from the business elite.
What FDI does is to permit foreigners to become significant owners, and decisive managers, of this resource base. Marxists may have been unable to choke capitalism, but they balk at the thought that Indian resources are being “gifted” away through the transfer of equity. Moreover, their electoral base will not permit them silence. The working class treats foreign equity in sectors like insurance as the death warrant of its protected rights, for the arrival of foreign ownership is tantamount to harsher working conditions and a threat to job-security. This is what the Left means when it says that this decision goes against the commitment to continue reforms but with a human face: That human face is the face of the working class.
The Marxists also know that their real strength comes from their monopoly of power in Bengal; if they lose Bengal, the Left movement begins to dissolve.
While the post-election difference in seats is generally substantial, the hidden fact is that there is not much difference between the Marxist and anti-Marxist vote in Bengal.
The latter vote is conveniently split, but there is no guarantee that it will always remain split. Nearly one third of the seats in the Bengal Assembly, from Calcutta toward the north along the Hooghly River, are either directly controlled by the working class, or influenced by them.
The Left Front cannot afford to alienate this core constituency.
The insurance market was opened to the world by the last government. Premier Dr. Manmohan Singh and Finance Minister P. Chidambaram gave a commitment in their budget that this would not be reversed.
Which brings us to a heresy that the ruling alliance will be loath to admit. But the fact is that as far as economic policy is concerned, the Congress is a natural ally of the BJP rather than of the Left. The Congress moved away from the quasi-Socialism of Indira Gandhi in the Nineties. “Reform” after all was a rebellion against the failed policies of the past, and who had set those policies except the Congress itself? A Congress-BJP government would produce a very smooth budget, heavily endorsed by the stock exchange and Frank Wisner.
The Congress alliance with the Left is built around a shared view of secularism; it is, therefore the Narendra Modi-RSS factor that keeps the Congress and the BJP apart, although in practice the Congress has played footsie with soft Hindutva when it so suited the party.
Equally, the Congress-Left amity is vulnerable to economic policy. One side will have to compromise to sort out the tensions of this budget, and it will not be the Left, since compromise for Marxists is electoral suicide. This is only the beginning.
This in turn is why alliance politics does not easily enter the Congress DNA. The Congress is blocked on both sides.
The normal pattern of a five-year term in office is to take the tough decisions, which will bear fruit over a thousand days or more, in the beginning and keep the populism for later, when the government can alleviate voters’ pain.
The Congress is trapped in New Delhi, but in those states where it has a clear majority there is a marked rush in the reverse direction, toward instant populism. Electricity has become free for farmers in Andhra Pradesh. Such good news has no legs, because free electricity now means no electricity a couple of years down the line. Not a very good idea, therefore, to ask a voter for his invaluable support then.
Similarly, in Punjab, Capt. Amarinder Singh, who was swamped in the elections, places a claim on water. It is a commonplace in futurology studies that the next generation of wars across the world will be over water rather than oil, but trust Indian democracy to pick up wars from both the past and the future and place them at the service of the here-and-now.
Has a calendar been sent to Congress chief ministers indicating that they should get ready for the next round of bloodletting known otherwise as a general election? Congress chief ministers who lost in Rajasthan and Madhya Pradesh, after doing their best, have been rehabilitated in the party.
Digvijay Singh and Ashok Gehlot have been made general secretaries of the AICC to lead the Congress back to victory in their states, now that incumbency is the headache of those who defeated them.
One gets the impression of generals being positioned, troops being arrayed, and the political arsenal being stocked with generous handouts. This is sensible war-planning by Sonia Gandhi.
For a while we were led to believe that there would be dual authority in the country, but this is palpably wrong. There is only one authority, and that is Sonia Gandhi. Allies acknowledge it in their speeches in Parliament.
Congress chief ministers check out decisions with Sonia Gandhi before they check, if at all, with the Congress prime minister. Dr Manmohan Singh accepts reality by sanctioning, from the PMO budget, an unprecedented throne room for his leader. Sonia Gandhi then sets the agenda for both government and her party. She is not going to make the mistake of initiating conflict. But she is not going to shy away from it either, if pushed once too often.
There is also the worry about unforeseen circumstances: What happens if the Supreme Court rules against Lalu Prasad Yadav, turns down his appeal against the High Court judgment and confirms his guilt? She is preparing for the dangers of incompatibility.
Actually, the sooner it comes, the better for her, since the best time for war is when your gathering array is matched by the enemy’s disarray.
There is a term in marketing that applies to electoral politics: Buyer’s Remorse. This is the difference between the dazzle of the shop window and the look of a purchase in the less glamorous atmosphere at home. In politics this translates to hope before the elections and the reality afterward. The trick, if you can manage it, is to go back to the voter before remorse sets in.
You have to be remorseless to succeed.
