Congress conundrum

Prime Minister Manmohan Singh told his Cabinet colleagues last week that the ruling United Progressive Alliance (UPA) would be “working against the political calendar” during the remaining one-and-a-half years of its tenure.

This frank admission, at one level, betrays the dilemma facing the reformers within the Government, as the country heads for an extended period of elections with small breaks in between.

While polls to the Himachal Pradesh assembly have just got over, Gujarat’s turn will come in December.

The current phase of electioneering has already claimed its first victim: The Rs 26.50 price hike in non-subsidised LPG cylinders, announced by public sector oil marketing companies (OMC) last Thursday, has since been put “on hold”. Now, there is talk of even the cap of six subsidised cylinders a year for each family being “reviewed”, even while the Petroleum Minister Veerappa Moily has said it is for the OMCs to “take a decision”. That is, of course, assuming they really have a choice in the matter!

Reforms agenda

But after Gujarat in December, a series of major assembly polls follow. It starts with Karnataka in May and, then, in Madhya Pradesh, Chhattisgarh, Rajasthan, Delhi and Jammu & Kashmir. In all these, barring the last, the Congress is in direct contention with the main opposition, Bharatiya Janata Party. In effect, the window for undertaking politically difficult reforms — raising urea prices or rationalising petro-product subsidies further — is mainly between mid-December and the presentation of the Union Budget in February-end. That Budget, being the UPA’s last full-fledged exercise, is bound to be a populist one.

Under the circumstances, the Congress high command is left with two choices. Go back to the tried-and-tested ‘socialist’ formula that comes most naturally to the party. The second is to make reforms part of the political agenda, which is what was sought to be projected at the party’s massive rally in Delhi’s Ramlila ground on Sunday.

All block, district and State unit presidents of the party — apart from senior Congress functionaries, Union and State-level ministers, and members of Parliament and State assemblies — were invited to the rally, where both Sonia Gandhi and her son Rahul Gandhi strongly backed the UPA Government’s decision to allow foreign supermarket chains to set up shop in the country.

But not many in the party — especially its ‘socialist’ lobby looking for greater elbow room — are convinced about the political marketability of economic reforms.

These tensions are bound to be reflected in a brainstorming samvad baithak meet of the All India Congress Committee office bearers and all Congress ministers in the UPA at Surajkund, Haryana on November 9. A senior Congress source said that the session will be “informal”. It will not be open to the media, so that “we and those of us in the Government have enough time to hear, criticise and counsel each other”. The recent political developments, implementation of the UPA’s manifesto (especially progress of the Government’s flagship programmes) and the emerging economic challenges are likely to figure in the meet, though no resolution is expected to come out of it.

One-time spectrum fee

The coming week may also see the Union Cabinet decide on the issue of collecting a one-time fee from incumbent mobile telecom operators on the ‘excess’ spectrum held by them.

This, as per a proposal already cleared by the Empowered Group of Ministers, would amount to airwaves in excess of 4.4 MHz for the balance period for which their existing licences are valid. For spectrum in excess of 6.2 MHz, there would be a separate fee to be collected retrospectively from July 2008.

If approved by the Cabinet, the proposal would lead to operators shelling out nearly Rs 30,000 crore. The biggest impact will be on Bharti Airtel and Reliance Communications, who would have to pay about Rs 4,000 crore each. State-owned BSNL and MTNL, too, may have to pay even more, but they are likely to get a waiver in some form.

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