INDIA DIARY by COOMI KAPOOR
IT has turned out to be the worst year for the ruling United Progressive Alliance Government of Prime Minister Manmohan Singh. Everything that could go wrong, went wrong.
As the year draws to a close, the public image of the Congress-led coalition was at its nadir, with the Government scoring a series of self-goals. Indeed, such was the disenchantment with Singh that in certain sections of the ruling alliance there was hush-hush talk of replacing him with a far more politically savvy leader.
The latest fiasco that further damaged the standing of the Government concerned the unilateral decision a few weeks ago to allow majority Foreign Direct Investment in multi-brand retail. Once the announcement was made, all hell broke loose, with members of the ruling coalition itself opposing the entry of the western supermarket chains to set up shop here.
The timing of the FDI move was all wrong. The Government was mired in corruption cases of its key members. The Gandhian activist, Anna Hazare, was mounting public pressure through his hunger fasts for creating a strong and effective anti-corruption ombudsman (Lokpal). Food inflation was running high in double-digit numbers. And the stage was being set for crucial Assembly elections in UP and four other States.
Under the circumstances, the Government invited trouble by opening itself to the combined attack from the Right and the Left when it unilaterally decided to allow majority FDI in multi-brand retail. And a disaster it turned out to be.
When the Parliament opened, the Government resisted any move to debate the FDI decision on a motion involving voting. For more than a week, there was a standoff.Finally, the Government wilted under the combined pressure of the Opposition and its own allies. Finance Minister Pranab Mukherjee, virtually the lone trouble shooter for the Government, ensured the return of normalcy in Parliament by categorically stating the FDI proposal was put on hold. The Government, he admitted, did not want to debate the matter since it did not have the requisite numbers in the Lok Sabha.
Significantly, the Prime Minister, who personally pushed the FDI decision, not only spoke forcefully in its favour but also ruled out its rollback at a rally of the Youth Congress at which both Sonia Gandhi and son, Rahul were on the dais. Neither Gandhi said a word in favour of the FDI, a broad hint to the Congress troops not to go out on a limb to back it. Observers noted that increasingly the PM and the Gandhis were no longer on the same page on key issues.
That the Americans were pushing hard for opening up multi-brand retail was widely known, especially after the recent publication of the leaked US cables by WikiLeaks.
In one of these cables, US Secretary of State Hillary Clinton, a one-time board member of Wal-Mart Inc, is quoted asking a high-ranking US diplomat in New Delhi about the position of key members of the UPA Government vis-à-vis multi-brand retail.
On its part, the Prime Minister justified the decision on grounds of potential benefits to consumers, farmers, etc. Also, it was meant to boost the economic sentiment and foreign investment into the country. Politically, the Government believed that the decision would counter the common criticism that it suffered from policy-paralysis.
But sheer movement is a poor substitute for a purposeful and thoughtful action. Virtually rolling back the FDI decision pulled the image of the Government several notches down. Besides, it proved that despite their inherent differences, the Left and the Right could jointly mount pressure on the Government.
The FDI fiasco was the latest in a long series of rebuffs suffered by the Government during 2011. In a year in which key members of the ruling alliance were arrested in corruption cases, when there was record food inflation, more than 16% depreciation of the rupee against the dollar, and overall growth declining sharply, the Government had very little credit to show.
That was not all. A bigger crisis lurked in the corner, with the Gandhian leader Anna Hazare threatening to sit on another indefinite fast at the end of the on-going winter session later this month if a strong and effective Lokpal Bill was not passed by Parliament. A standing committee of Parliament had not embraced main points of the draft Bill presented by Team Anna, leading the Gandhian to accuse the Government of its wanting to pass a toothless law which would completely fail to check rampant corruption.
Given that the Government was busy fire-fighting round the year, captains of industry expressed concern that the policy paralysis would cripple the economy.
In such a gloomy scenario, it should not come as a surprise that many observers believe that the India Story is already over.
Singh, critics insist, does not have the skills and the temperament to manage a difficult coalition. Even his USP that he was personally clean is no more an advantage, with people saying that he has presided over the most corrupt government since Independence.
Of course, his fate can be decided only by Sonia Gandhi. Should she find a better alternative, or her son, Rahul, is ready to take over as prime minister, there is now little doubt that Singh will find himself eased out.