Manmohan regime sends clear signal that it no longer wants to be accused of ‘policy paralysis’

The Manmohan Singh government on Friday sent out an unambiguous signal that it was no longer prepared to be accused of “policy paralysis” and be pushed around either by its junior partners or the Opposition.

A day after it increased the price of diesel and limited the sale of LPG cylinders a household at the current price to six annually, it announced reforms in the retail sector — single and multi-brand — civil aviation, broadcasting and power, and disinvestment in four PSUs, sparking off a flurry of protests from the Opposition — and allies.

Meanwhile, even as senior Congress sources confirmed that these issues were discussed “informally” with its partners, a furious Trinamool Congress gave the United Progressive Alliance (UPA) 72 hours to roll back the decisions on diesel price and FDI in multi-brand retail.

Railway Minister Mukul Roy, Trinamool sources said, called Congress president Sonia Gandhi’s political secretary Ahmed Patel on Friday evening to say that while they had agreed on FDI in civil aviation and even the diesel hike (though they had said they would make a token protest), FDI in multi-brand retail was not discussed.

In Chennai, Dravida Munnetra Kazhagam supremo M. Karunanidhi said he was not consulted on the diesel hike and asked that it be reversed.

As for the Nationalist Congress Party, it left the protest on diesel to be done by its Mumbai unit.

Of greater concern to the government was the opposition to FDI in multi-brand retail from the Samajwadi Party, which supports the UPA government from outside, and places it in a comfort zone — in case the Trinamool pulls the plug.

But on Friday, the government did not seem to be in a mood to relent. An unfazed Prime Minister said in a statement the Cabinet decisions aimed at bolstering “economic growth” and making India “a more attractive destination for foreign investment,” steps that he believed, would “help strengthen our growth process and generate employment in these difficult times.” He ended by urging “all segments of public opinion to support the steps we have taken in national interest.”

At a press conference on Friday evening, Union Commerce Minister Anand Sharma, flanked by Information and Broadcasting Minister Ambika Soni, echoed that sentiment. Mr. Sharma told journalists that the government’s decisions sent out a “very clear message” about the government’s desire to create jobs and wealth, and that it had “resonated globally” to negate the “the motivated campaign” against the UPA government.

Clearly, the Congress’ objective, both of the government and party, is to alter the terms of the debate — and get the spotlight off Coalgate.

Indeed, barely two hours before that, the party’s new spokesperson, P.C. Chacko, vigorously defended the diesel price hike: “The government was very reluctant to take an unpleasant decision, but it was unavoidable,” he said, “as the very existence of the oil companies was in danger. In fact, it does not address even a small percentage of the losses being incurred by the oil companies.”

Asked whether Ms. Gandhi told the Congress Core Group on Wednesday that she was opposed to the diesel price hike, he said: “She had asked whether it could not be avoided. After all, the Congress is as opposed to the hike as any other party, but the government is in a tight position.” He also pointed out that the idea of six cylinders a household annually had emanated from the Parliamentary Standing Committee for the Petroleum Ministry — on which all political parties are represented.

The Congress sources added, however, that the government has kept a cushion for itself in the diesel price hike – and could do a partial rollback, cut back by Rs 1.50, i.e., the Central tax component of the increase, if things get too fraught. But that would be it.

Meanwhile, the Congress is advising the State governments to lessen the blow of the diesel hike — as its own State governments are likely to do — by foregoing the excise tax and VAT.

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