Friday, June 29, 2012

Pranab & Mamata out, Mulayan in – Reforms On !

Within just a few days of Finance Minister (FM) Pranab Mukherjee having resigned, the Prime Minister, (PM) Manmohan Singh, has started to reverse some of the regressive tax policies being pushed by the erstwhile FM.

Venky Vembu in his fantastic story on says” Let’s be very clear about it: there is nothing wrong with plugging tax loopholes……But where Pranab-da erred was in going overboard with his exertions to knock the stuffing out of Vodafone….”

The messaging from the Prime Minister’s Office is clear : Reforms are On !

When the PM of a country reverses the decisions of its FM and provides pro-reforms clarifications within one day of the FM resigning, the messaging there cannot be ignored. The PM did not wait for a month, he did not even wait for a week - he started acting even "before the body got cold".

No doubt the fact of PM Manmohan Singh’s responsibility for the slowdown in the reforms process, and the large scale corruption going on right under his nose, cannot be denied. But possibly, he might still have a chance to redeem himself and set right the wrong that has happened.

As for the numbers game in Parliament, Manmohan Singh’s government is well placed with Mulayam in its fold and Mamata being sidelined.

There was a great story on First Post: With Mulayam on its side, UPA won’t need Mamata anymore , which had correctly identified the changing political equations in the country. To quote from the story:

“ Indicatively, the Samajwadi Party has 21 MPs in the Lok Sabha and eight in the Rajya Sabha; the Trinamool Congress, on the other hand, has 20 MPs in the Lok Sabha and nine in the Rajya Sabha. But it’s not just about the numbers. As The Telegraph reported, citing Congress sources, having Mulayam Singh by its side gives the Congress much more elbow room on policy matters: for all the “samajwadi” economic philosophy that his party embraces, Mulayam Singh is perceived to be “more flexible” than Mamata when it comes to economic reforms.”

So what does that mean now for some of the major reforms and other governance measures that have been on the backburner?

Many of those measures are likely to go through. However, Karuna can still play the spoilsport, but only to a limited extent. CBI (Congress) has cases pending against his daughter and Raja, one of his key lieutenants.

Mulayam is expected to be flexible. But why is that so? For the same reason that Lalu Prasad is flexible … all the CBI cases pending against him, his relatives and his friends, cases ranging from murder to bribery. Congress has done this kind of deal with Mulayam before, withdrawing a CBI case in return for support. That’s the kind of deal they must have worked out this time.

All in all, with Mamata sidelined, Mulayam in its fold and Pranab as President, Congress has not had it so good in many years.