Is anyone ready for an early election? Apparently not, though all parties are trying to brazen their way out of a bad political situation. Really bad for the Congress, but a situation that also poses existential questions for the BJP and regional players. The Congress has made it clear that, for the moment, it is not rolling back FDI in retail. “Governments run on possibilities. We don’t see any immediate threat to the government as of now,” says party general secretary B.K. Hari Prasad. “If pushed for an early election, we are ready for it, but I don’t smell anything bad right now. We have enough numbers in the House. The SP and BSP continue to support us. The DMK will remain with us for the entire term. If the BJP thinks we are a minority government and don’t have enough support, they can bring a no-confidence motion in the House. The fact is they don’t have the courage to do so as they will be exposed.”
The BJP, having disrupted an entire session of Parliament, is now backing out of L.K. Advani’s suggestion for a special session. President Nitin Gadkari told Outlook, “We are not going to bring a no-confidence motion in the House. Advaniji has demanded a special parliamentary session, but it is on the issue of FDI. We don’t want to push this nation to early polls. This government is going to die its own death. Why should we bring a no-confidence motion or try to make it fall? Let it be thrown out by the people itself.”
Party sources also reveal that Advani’s anxiety to bring down the government now stems from the realisation that once the Gujarat elections are over this year-end, the leadership issue may well be settled and be out of his reach. BJP spokesperson Prakash Javadekar indicated as much when he said recently that nothing will be decided on the leadership issue till the Gujarat elections.
The SP too is in wait-and-watch mode. UP chief minister Akhilesh Yadav told Outlook that “our support to the UPA is essentially aimed at keeping out communal forces. But once the party leadership takes a decision, we’ll be ready for anything”. That said, the SP cannot be seen as playing to a gameplan that may eventually help the BJP. As such, Mulayam Yadav was careful to keep a distance from the BJP during the Bharat bandh.
The Opp ops BJP leaders, Sharad Yadav and Yechuri at a dharna against govt policies. (Photograph by Tribhuvan Tiwari)
It doesn’t stop Akhilesh, however, from asking a few hard questions of the Congress. “I see no reason,” he says, “why the Congress leadership could not have consulted its allies before embarking on a decision bound to affect the nation’s economy. After all, we do not have a closed mind.” Indeed, minds are open but options limited given the current arithmetic in the Lok Sabha. There is a tentative move to carve a front of leaders such as Mamata Banerjee, Mulayam, Nitish Kumar, Naveen Patnaik, even Jagan Reddy. The problem is, even if Mulayam ditches, there’s still the BSP to bail the government out. Always a solo artiste, Mayawati has never shown the inclination or desire to be part of a regional grouping. Yet, she remains a big player who can tilt the balance in favour of the UPA surviving for some more time.
The writing, though, is on the wall: the government may not technically fall tomorrow, but the process has begun. That is why ally NCP could say that all parties should tighten their seat-belts for polls. Sharad Pawar’s statement raised the question whether he’d join hands with the third front or even the BJP. NCP leader D.P. Tripathi rejects any such possibility. “Sharad Pawar has also said that minority governments have completed their full term successfully and we don’t think there is any immediate danger to the government. But even if such a situation arrives, we’re ready.”
But no one, it seems, is really ready for early elections. All they are predicting is further instability! This cynical strain of politics is one thing the Congress is expert at exploiting during floor management in the House in the event of a vote. Yet, a regime hanging by a thread can well find it snapping all of a sudden.
What the Congress does have going for it is the general confusion in the political class about what to do next. Take the situation the Left is in. Once the anchor for any non-Congress, non-BJP initiative, there’s no clarity at this point on whether it will be part of a third front. CPI general secretary Sudhakar Reddy says, “We have not calculated if early or late elections will benefit the Left parties or not. It hardly matters. The important thing is this anti-people government should be forced to withdraw its anti-poor policies. Yet, that is not an indication of us forming a third front.”
At present, no one really knows if they’re coming or going. It can work for UPA-II for just a little while longer. To survive the full term, it will need to take some drastic steps to give coherence to a polity currently in a tailspin.
BJP’s Flip-Flop On FDI In Multi-Brand Retail
By Panini Anand in Delhi and Sharat Pradhan in Lucknow
The country needs a prime minister who is an active politician and knows the pulse of the people, not an economist, however eminent. Manmohan Singh (An Extended Coda, Oct 1) was made prime minister because he submits to the will of Sonia Gandhi. Since he was not directly elected, he doesn’t feel the sense of accountability as acutely as someone who was so elected would feel. And we know all too well his biases, given his imf-World Bank employment background. I think that in the light of one coalition partner pulling out and another speaking up against recent policy decisions, Manmohan should resign. Either a new coalition should be formed or a mid-term election should be held.
S. Raghunatha Prabhu, Alappuzha
UPA leaders assert there is no threat to the coalition as the Samajwadi Party and Bahujan Samaj Party have kept up their support. But continued support from these parties can never be certain, for Mulayam Singh Yadav and Mayawati keep circling each other to get a sense of which way their rival will move.
Pramod Srivastava, Delhi
Has Mamata Banerjee withdrawn support to the UPA out of concern for the aam aadmi? Not at all. She hopes to divert attention from her failures as the chief minister of West Bengal. The Congress too is trying to hide its failures. After the poor and the middle class were hit by inflation—and so-called bold economic decisions like FDI in retail, hike in diesel prices and curtailment of gas subsidies—it hopes to win votes by claiming to have gone strong with reforms.
M. Kumar, on e-mail
Organised retail is good for all, farmers and consumers. It’s certainly not the case that kirana stores would be badly affected. First, we don’t really have correct figures for the number of kirana stores in the country. Second, most of them will find ways to retain customers by changing business practices in the face of competition from big retail. Wholesale trade as it exists today only benefits middlemen: neither farmers nor consumers get the right price. This must change and FDI in retail—if it can benefit all sections—should be welcomed.
Narendra M. Apte, Pune
Big retail, fuelled by FDI, could check bad business practices. In India, there’s no dearth of buyers: there are those who will buy a Rs 4,000 lunch at a big restaurant, there are those who will line up for a Rs 50 lunch at a roadside shop. Kirana stores needn’t fear FDI.
Hemavathi A., Hyderabad
Big bang reforms—as the recent decisions of the government are being projected—will affect the common man most. But none of our politicians—not even activists like Anna Hazare—have voiced any cogent counter-argument. Amartya Sen says there’s a strong link between policy and equity, with the former aimed at achieving the latter. In India, though, the opposite effect is being achieved.
Padmini Raghavendra, Secunderabad
The 'rush' of reforms by UPA is nothing of the sort.Incraesing Diesel prices is reform?Getting FDI in REtail notified by excutive fiat is clearly a backdoor ploy.Other'reforms' such as incresasing PDS Sugar price, increasing subsidised LPG from 6 to 9(some reform !)cylinders is tinkering not reforming.Only die hard accolytes of knee jerk UPA , will be happy that UPA is still on its feet. Congress + Mayavati+ 9 LPGs+ RiffRaff - TMC is stability ?Surving by the skin of their teeth, I would say.Clutching at every straw in the wind(such as Arun Shourie's gaurded response to an inane questioning by chattering channel 'compere' s is not stability but extreme nervousness. So called news analysts were aghast at S&P's reaction, downgrading India's growth rate.How could they do it after the 'host' of reforms enacted in a day ?Rest assured the remaining reforms would also come through executive fiats, which was made clear by a 'weighty cabinet Mantri"the other day.These are the afficianados of a well functioning Parliament !! In point of fact, UPA -II is afraid of Parliament.
FDI In Retail : FDI in retail in its current episode is coal - mines- full of red-herring & doing fine what red herrings are supposed to do.Those who are making huge hugh & cry on it are helping to bury the black scams deep underground. Main opposition & ruling regime are in agreement that coal is too much black , cannot be cleaned howsoever much do you wash it. So let it alone.
Compared, FDI in retail is harmless game. No multinational retailer at this stage of market configuration in India, is going to sink big time money in retailing here , given the state of the economy worldwide & India in particular. Indian market is also not ready to sustain world class retail. And to assume that they would come & sink billions of dollars to create cold-chains from the farms to city outlets is fanciful thinking & there is any no reason to believe farmers would get better price becauase if at all, it will make better business sense for organised retailers - foreign or domestic- to make use of ready made chain of exhisting intermediaries who now brings farm produce to city markets.
Already in a span of a week, FDI in reail has done what it was supposed to do. It has helped get rid of a tetchy co-alition partner, coalgate to disappear from TV & news papers. FDI in retail would also disappear from public discourse in a while.
One more time, Dr. Manmohan has proved to be a more cunning political opertor than all other opposition & allies taken togather. Political acumen should have told opponents to welcome FDI retail & that would have been end of it.
Oil Price Hike : One of the worst kind of misinformation is that government subsidies petrolium products of common use like petrol , diesel , gas etc. Poltical parties of all hues , mainstream media , phony economists help to spread this canard.
When the government increases prices of these products what happenes in effcet is tax collections governments increases. If on rare occasions prices of are decreased, they would actually reduce tax collections.
It would have been a subsidy had refiners sold products at pre-tax price below their cost. That is never the case. The prices are increased at the retailers' end. Had real reason for increasing prices been crude price hike or higher cost of dollar, inceasing pre-tax prices at refinerers' end only would have made sense. The so called subsidy- a charade - is refund of portion of tax collected at the retail end.This explains the paradox that refiners & OMCs shows substantial profit in their annual reports while government & interested quarters cry hoarse about subsidy. In reality by hiking petrolium product prices, governments enhance their take from the OMCs who in their turn passes them on to the consumers. Important point must be remembered that distribution & marketing are by & large fixed costs.
So instead of consumers being subsidised, consumers subsides government by way of increased taxes on these products.
One point must be made. The rationale usually doled in such cases is government's fiscal defecit. It is common wisdom that indirect taxes increases poor man's cost , direct taxes affect the rich. Over the years direct taxes like income, excise, customs , corporate, wealth etc. has been steadily decreased. Indirect taxes - mainly on oil products - which has cascading inflationary effect on items of common man's use has been increased.
OIl price hike etc. are devices to subsidise the rich & not the other way round.
A very stark example is shelving of proposed GAAR. The name itself tells the story- General Anti-Avoidance Rules. It was deviced to plug loopholes which allows avoidance of tax by legal tricks. GAAR, if codified & implimented, would have fetched substantial revenue to government & would have gone long way to narrow fiscal mis-match. What problem could an honest government have in stopping tax avoidance while every modern tax regime has some sort of GAAR in place? But they would rather shelve GAAR to give releif to the rich & increase prices of oil products which would burden the poor.
Now FDI in Retail ::
FICCI Chairman has written a letter rto Manmohan Singh asking him that in 2002 when Bajpai Sarkar wanted to adopt FDI in Retail then Manmohan Singh pontificated that instead of increasing jobs the FDI in Retail will cut short the number of Jobs drastically -thus FDI was a retrrogative step .MMS advised Bajpai to go for some thing big in reforms instead of FDI in Retail.
However Bajpai sarkar finally dropped the FDI in retail due Elections in the corner.
Well now same Manmohan and his Govt says that many Millions jobs will be created by allowing FDI Retail .
How can it be ? What has changed in 2002 and 2012 ??
Has the Wall-mart agreed that it will appoint 12 persons where only one is needed ???
Now to Opposition and Aam Admi ::
It is a fact that big companies give generally rebate of 5 % Plus on all the purchases where as the Ordinary Bania does not .Also the quality of the goods sold by the Big Companies is of superior quality wise .
But still ordinary Bania has brisk sales . Why ??
Because Small shop owners give food stuffs and other items on credit where as the Big Chains don't. Also poor house holds purchase the stuff in small quantities on daily requirements where as the Big Chains go per the packed quantities. I have observed that daily wage earners purchase stuff per daily requirements as they don't have the money to purchase on weekly or monthly requirements basis.
Hence the small Bania is the answer to their needs.
Big Chains are located 15 to 20 kms from the House Holds .Aam Admi can't afford Time and to and fro Transport charges which not only nullify the cheap rates offered by the Big Chains but also in the end goods cost more if one add the Transport Charges .
I have seen three to four Big Indian Chains in India folding up even though they were rendering good services and had decent sales.
Religare the chain selling Medicines and few house hold items closed shop in our area as it could not afford the Rent of its rented establishment .Though it was offering 10 % Rebate on all items to the Sr Citizens and 5 % Rebate to others. And medicines were genuine not the spurious ones. In Maharashtra 33 % medicines being sold are either expired ones and repacked or even are just spurious duplicate ones.
Hence I have now to go to Churchgate area at quite a distance from my residence.
So what Wall Mart will achieve in India when Retails manned by big houses like Reliance are facing problems ?? And they are employing minimum number of persons to man their Stores .
So where are the Millions of Jobs being tom tomed by the Ministers of UPA??
I don't think Wall- marts are coming for charity and not for Profits .
And this theory they will purchase directly from the farmers is hardly workable.All the big chains in India are purchasing from the Main Mandies in the Cities not from the Kissans .
Both Opposition and UPA are lying the Aam Admi .
BJP is really foolish in playing into the hands of the Left .It has become B Team to Commies like its Nuke Opposition . And at the first instant after being used BJP was given a solid kick by the Commies on its back declaring BJP as a Communal Party.
Again BJP will get a big kick now from the Commies.
Better BJP should adopt practical and Project Policies independent of Mulayam and Commies.
Congress must remmebr that in the last Elections in 2009 the Middle class gave it nearly 70 MPs extra and the Congress has abandoned the middle class this time .
BJP has a better chance due the various Scams Congress Ministers have indulge din but BJP leaders are brainless and don't know how to go ahead and convert the anti Congress mood into a Victory .
Where was the need to close the Parliament for whole of the Session where as protests for 2 to 3 days were enough ??
They could have availed the floor of the Houses to hammer and expose the Ministers !
Cylinders 6 on Old Rates + 3 on enhanced Rate has unleashed a major Wave of Black marketing by the Dealers in all the Cities.
Nearly all the House Holds have already consumed 9 Cylinders at the rate of One Cylinder per Month .Specially the Joint Families are the sufferers .
Till now even normal supplies were irregular and waiting period for receiving a refill was about 2 Months in many cities in India. The big families could not afford the time lag in supplies .Hence they were fleeced Rs 600 per Cylinder for immediate refill. Now the going rate has gone up to Rs 1200 .
Hence the people are crying as the Norms have been fixed without allowing the gestation period for the system to set in.
Then Sehila Dixit and other Congress Chief Ministers have bravely declared that they have increased the Quota to 9 cylinders per Month in their States .
But the Distributors say they are answerable to the Oil Companies and if they supply extra 3 cylinders on old Rates then who will give them the excess amounts ?? They don't want to go for Refund Route from the Sates as none neither the Distributors nor the People Trust the one line Declarations of the Chief Ministers.
There are no orders from the Central Govt nor from the Oil companies and none trusts rightfully the State Chief Ministers .
Hence the Gas Distributors will go on strike from 1st October till Central Govt lay down the clear cut guide lines and instruction about the New Policy
The logical action is the Central Govt should have first drawn the procedure and then issued the 6+3 Policy. But as usual the Govt showed no such Wisdom !
Part 2 : The FDI
Opposition Parties are not fully correct in opposing the FDI Policy in toto :
FDI in Aviation Sector : We all know that all the Aviation Companies are under stress and are facing major Financial crisis .Lenders like Banks are also worried about their Loans given to the Aviation Sector .
The Companies themselves wanted FDI to improve their Financial Health .
So what objections the Opposition Parties have on FDI in Aviation Sector ???
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