Sucheta Dalal :Challenges to the new Alliance
Sucheta Dalal

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Challenges to the new Alliance  

June 1, 2004

Can a mixed bag of characters and ideologies run a successful coalition and keep up the pace of reforms?


United Progressive Alliance – its pros and cons


By Sucheta Dalal


“It felt proud to be an Indian that day” says a top executive returning from a conference abroad just after Dr.Manmohan Singh was sworn-in as Prime Minister. He had the amazing experience of having complete strangers walking over to him on reading “India” on his delegate badge to congratulate him on the quality and the resilience of our democracy.

Global perception about India is running extremely high at the moment, and with good reason too. Consider the facts from an outsiders’ perspective. We have a muslim President, who is also a world renowned scientist and has had the courage to transform the highest office in the land. He is also a person of high personal integrity, who has quickly become a role model instead of a mere figurehead – especially for children.

We also have a Catholic woman of foreign origin was chosen to become Prime Minister as head of a coalition of secular political parties; yet, she stunned the world by renouncing her claim, rather than create discord in the nation. She then went on to choose a Prime Minister whose appointment only added to India’s image. Dr.Manmohan Singh, is also a man of unusually high integrity and a well-known and respected economist. Then, just when it seemed that the good news wouldn’t get any better the Congress government announced the appointment of P.Chidambaram as Finance Minister.

It is no wonder that the capital market has switched from complete panic to cautious optimism in just over a fortnight.

Dr.Singh and Mr.Chidambaram have been making all the right noises on reforms. Continuity with change is their slogan and ‘reforms with a human face’ is their laudable objective. Union Power Minister, P M Sayeed’s statement that States that want to dish out free power and subsidies to certain segments of society must do so out of their own budgets is another step in the right direction.

But this avalanche of good news could however have the dangerous effect of drowning out some of scary signals that continue to be emanated from the other constituents of the United Progressive Alliance (UPA).

The biggest weakness of this government is that the Congress has only 141 seats, and all its good intentions can be dashed to the ground by its strange bunch of allies.

The Communist Parties, who are the biggest support group have toned down their rhetoric after causing stunning damage to the capital market; but every other party with a ministerial portfolio under its belt has begun to express its views.

So, Shipping Minister T.R.Baalu ruled out privatisation of Shipping Corporation of India and Telecom Minister Dayanidhi Maran ruled out privatisation of MTNL and BSNL in their first appearance before the media.

As for Laloo Prasad Yadav’s Rashtriya Janta Dal, several of its ministers have multiple charge-sheets filed against them and have also spent a stint in police lock-up; yet their numbers continue to swell, with more MPs with prison records and criminal charges winning seats. Will Laloo Prasad Yadav’s entertainment value compensate for the dubious record of his party? And won’t it severely damage the UPA government’s credibility.

If that weren’t enough, some Congresspersons want to reopen the investigation into Rajiv Gandhi’s assassination. A foolish move that could only embarrass the government; after all, the Social Welfare Minister from the DMK Party is among the 21 “suspects” investigated and later acquitted by the TADA court in connection with the murder.

If stock indices have been floundering a little after their initial welcome to this government, it is because of the contradictory signals that are being sent out by the UPA’s constituents. In the initial years, managing the ragged coalition will be a bigger test for this government, than pursuing reforms or boosting the economy. And the nervousness on this front gets worse everyday.

The latest is the decision by the Congress allies to form a “Front within Front”. On the face of it, the non-Congress parties in the UPA are projecting this as a way to improve the operational efficiency of government. According to them, they plan to join forces, so that issue and grievances can be taken up jointly with the Congress.

In fact they will collectively be able to hold out a more formidable threat to the Congress and weaken the coalition. Even if the communist parties stay away from such a ‘Front’, the sheer numbers of the rest of the allies will allow from much greater pressure and even political blackmail.  

If the Front within a Front is successfully formed, then the capital market will remain in turmoil, since each new day could bring fresh and divergent perceptions about the stability of the government.

Email: [email protected]

This article appeared in Gujarati in Divvya Bhaskar on May 28,2004

-- Sucheta Dalal