The Congress turns the tide...for now

Last Updated: Sat, Sep 15, 2012 20:34 hrs

Recently, a TV news channel conducted an opinion poll to show what would happen if general elections were held now. The results were damning for the ruling government. It predicted that the Congress Lok Sabha seats would go down from 206 seats to 127. That’s a whopping loss of 79 seats.

The BJP would be a major gainer. From its current tally of 116 seats, it would go up to 143. Now the BJP has experience in coalition politics as the 1998-2004 NDA experiment showed. Also, the Congress had just 145 seats in 2004 and yet it completed 5 years in office. So it is very likely that NDA2 would also go the full term if it came to power.

However, as of now there are no general elections and they may well take place in 2014 only, so there’s many a slip between the cup and the lip. Two years is more than enough time for the Congress to regain lost ground or the BJP to lose its current perceived gains.

However, till recently, the momentum did seem to be against the Congress. The scams kept coming and there was a great deal of policy paralysis. With the way things were going, the Congress would do even worse by 2014.

However, “Come September” and the Congress suddenly seems to have made a remarkable turnaround. First the contentious GAAR rules were shelved and then Vodafone got relief in the retro-tax case. This got corporate India smiling.

However there was more to follow and Prime Minister Manmohan Singh suddenly seems to have gone on an overdrive. A series of measures have resulted in new hope for the economy and the Sensex also went on a huge high.

First up is the diesel price hike, which is not as contentious as it sounds. Everyone knows that the diesel subsidy is not meant for the urban consumers, but they continue to enjoy it anyway. Despite everything, diesel is still far cheaper than petrol and diesel car drivers really have no cause to complain.

The hike in the price of the LPG cylinder beyond the sixth one in the year can also be borne by consumers as urban India is the biggest consumer and it can afford it. India is a highly subsidized country and the reduction of subsidies in the long run is inevitable.

No-one denies that the civil aviation industry in India is in the doldrums. In the end the biggest sufferers were the consumers with hefty ticket prices and cancelled flights. FDI in aviation is long overdue and extremely welcome. Passengers can actually heave a sigh of relief now with this move.

Despite all the hypocrisy shown by the BJP and many others, FDI in retail will also benefit the consumers. Foreign firms will greatly improve the infrastructure of the country (including the much needed “cold storage chains”) and also bring down the prices. How many of us know that the local kirana store doesn’t have to charge us at MRP, but can do so at a much lower rate but refuses to do so? Stores like Walmart are known for their cut-throat prices and that will make the end consumers smile.

India is also heavily dependent on middle-men, many of whom add absolutely no value to the chain and foreign players have the best chance of breaking this stranglehold.

Disinvestment in PSUs will also help raise thousands of crores of much needed cash for the government coffers.

All in all it looks like a win-win situation for the economy and the Congress seems to have finally turned the tide in its favour.

However, a couple of questions still remain.

For one, is this a one-off event, or will this momentum stay till 2014? If it’s just a flash in the pan, then the Congress will just go back in its slide. However, if it can continue with such moves right through 2014, then not only will it do the economy good, but the Congress will finally get the chance to retain lost ground.

The second factor is what the SP and Trinamool Congress will do now. Till now they had been content with the way things were going. The Congress was getting mired with one scam after another and showing absolutely no initiative in solving the problems of the nation.

These parties were giving the long rope of support in the hope that the Congress would hang itself. Their strategy was to let the anti-incumbency reach its peak, all the while criticizing the Congress loudly in public.

That would lead to a decimated Congress in 2014 and the SP could emerge as the single largest party and stake claim for prime ministership in the event of even the BJP losing seat share. The Trinamool would also become a powerful factor in the new set-up.

But now the equation has totally changed. If the Congress continues to be on the warpath as it is now, then by 2014, the economy would well have recovered and 2G and Coalgate could be distant memories. The Indian electorate has a very short memory in any case.

These two parties might well push the panic buttons and force general elections right now with the Coalgate controversy still raging on and the current moves though prudent, but still being seen as widely unpopular.

On the other hand, the nation might not forgive the party that brings down the government and punish it for forcing early general elections.

Both the SP and Trinamool are currently caught between a rock and a hard place and the next few weeks will be one of great tension for both Mamata Banerjee and Mulayam Singh Yadav!

Well played Congress!

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The author is a Bangalore-based journalist and blogger.

He blogs at

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