New Delhi:
Congress president Sonia Gandhi and the Prime Minister met with their senior-most party leaders today to explain the recent economic reforms that have reduced their government to a minority. "There is no threat to the government, it is stable," Mrs Gandhi is reported to have told the 30 people at the meeting chaired by her.
The decision to increase diesel prices and open up the retail sector to foreign mega-store chains led to Mamata Banerjee divorcing the UPA - she withdrew her support on Friday, and her six ministers quit the government. The UPA still has more than the 272 votes it needs in the Lok Sabha to remain in power, but the coalition is now more fragile than ever, and heavily dependent on the twin support of Mulayam Singh Yadav and Mayawati. Mrs Gandhi referred at today's meeting to them as "two new allies" while explaining the timeline of Ms Banerjee's exit.
At the meeting, Delhi Chief Minister Sheila Dikshit reportedly said that the chief ministers of the Congress-ruled states could have at least been consulted on the recently announced reforms including a cut in diesel subsidy and a cap on subsidised LPG cylinders. The government, after announcing a six cylinder per household cap on subsidised cooking gas cylinders, had said that the Congress-ruled states will give three extra subsidised cooking gas cylinders. Congress General Secretary Janardhan Dwivedi is also reported to have said that the party should have been consulted and taken into confidence.
The government is also on the defensive after reports of a major coal scam, worth 1.86 lakh crores according to the national auditor or CAG. The Supreme Court has asked for an explanation of how coal fields were allotted between 2004 and 2009. The auditor says there was lack of transparency and that an auction, which would have ensured fair play, was delayed. The coal scam is the latest installment of a series of financial scandals that threaten to become the hallmark of the sophomore version of the UPA. The Opposition BJP has demanded the PM's resignation, and paralysed the last session of Parliament, refusing to allow a debate on the controversy. Once again, today, Mrs Gandhi attacked the BJP for not acting like a responsible opposition and for targeting the Prime Minister, making it clear that she supports the economic agenda introduced in the last few days by Dr Manmohan Singh. A few weeks ago, she had described the BJP's tactics of preventing the functioning of Parliament as "blackmail."
At the Congress Working Committee meeting this morning, the Finance Minister P Chidambaram elaborated on the need for economic reforms to rein in fiscal deficit, boost investor confidence, and protect the country from the global economic crisis. The PM explained that the UPA's flagship schemes, designed largely to benefit the rural poor, will be hurt if the economy continues to sputter.
The party is finalising a strategy to counter the Opposition's campaign against Foreign Direct Investment or FDI in retail. Last week, the Opposition called a nationwide strike supported by trade unions and shopkeepers to protest against the entry of super-chains like Wal-Mart. A day later, the PM in a rare televised address urged the country not to be misled by misinformation. He said it was time to make tough decisions, and that he wanted the people's trust, cooperation and understanding. Dr Manmohan Singh stressed that his reforms will not hurt the poorest families.
The BJP and the Left have been joined by Ms Banerjee's Trinamool Congress in the demand that a special session of Parliament be called to debate FDI in retail, which has already been notified and is now law. The government does not need Parliament to endorse the FDI move as it is an executive decision, but the opposition parties are holding the government to a promise it made last year that it would consider the views of all political parties before making that decision.