The fragile 13-party United Front (UF) government of Deve Gowda has 170 seats in the Lok Sabha of 545 members; the Congress (I) with 135 members gives it the needed parliamentary majority. His government has moved along in its two months in office without a major crisis. The Prime Minister's earthy pragmatism in dealing with problems and his self-effacing, modest personal style and integrity have caused a favourable impression. The UFOs first budget charted the course for the remainder of the fiscal year. The Congress (I) is so divided and must first settle its own problems, including that of the leadership, before it can expect to challenge the government.
Palaniappan Chidambaram was perhaps the best choice as finance minister. He was Minister of Commerce in the Congress (I) government of Narasimha Rao. A corporate lawyer with a Harvard degree, he has been closely associated with Manmohan Singh, Narasimha Rao's finance minister, in the economic liberalisation policies launched in 1991. Chidambaram left the Congress (I) on the eve of the general election of May this year when Narasimha Rao formed an alliance with Jeyalalitha's AIADMK. He, along with G.M.K. Moopanar, launched the Tamil Maanila Congress (TMC), which won convincingly all 20 of the 39 Lok Sabha seats it contested; 39 out of 40 of its candidates were returned to the Tamil Nadu Assembly.
Presenting a budget of a coalition government including centrists, communists, regional party representatives and deprived castes was difficult enough. But the budget had to be palatable, simultaneously, to the Congress (I) without whose support the Deve Gowda government could not continue in office. Chidambaram performed his task so skillfully that the Congress (I) welcomed the budget for its elements of continuity; the main opposition party, the Baharatiya Janatha Party (BJP) was thrown into confusion and remained mostly silent. Jaswant Singh, finance minister in the 13 day cabinet of the BJP, called it a Congress budget Chidambaram's budget contained more elements of continuity than of change. The finance minister followed in large measure Manmohan Singhs proposals of 1995 but in a different style. He chose not to review the legacy that he had inherited, but he did not criticize Manmohan Singh. After all, Chidambaram was a part of the Manmohan Singh Policy team of the past five years.
The budget made provision for infrastructure development in the rural sector. It sought to enhance the capacity base of the National Board of Agriculture and Rural Development (NBARD) and the public sector banks. It augmented the Jawahar Rozgar Yojana, the main programme for rural employment. Farmers were rewarded by increases in subsidies on fertilizers and agricultural appliances. it promised to restructure the Public Distribution System (PDS).
On the other hand, the budget seems to have failed to convince investors that the United Front government would give the economic reforms process a boost. It has no major resource mobilization thrust. Nor is there any determined attempt to tackle serious problems such as uncontrolled government expenditure. The finance minister made it clear that these issues will have to wait until a political consensus is reached. For this he proposed a Management and Reforms Commission, consisting of distinguished political leaders, economists and administrators. The report of this commission and a discussion paper on subsidies is to be placed before parliament. How successful this exercise will be remains to be seen because a consensus eluded former finance minister Manmohan Singh and was the main reason for the slowdown in reforms in these areas.
The budget does show, however, the finance minister's own predilection for accelerating the reform process. In terms of investment or social sector spending, the budget does little to redeem the pledge to redirect the path of development on the basis of which the government won its mandate and promised to fulfil that mandate in the Common Minimum Programme.
Disarming but tough
While the sophisticated and highly articulate finance minister was walking a tight tope in formulating and presenting his budget, the inexperienced and modest Deve Gowda was settling down to deal with the complex array of tasks that the prime minister of the world's largest democracy and the second largest population has to perform. Not too accustomed to the ways of the Centre in new Delhi, he was adopting his own personal style on guiding the affairs of state .
He has shown that in spite of his disarming demeanour he can get thing done. Yashwant Singh of the BJP comments, He repeats ad nauseam that he is a humble man, but when it comes to getting what he wants, he can be quite ruthless.
The prime minister's ability to solve problems by mobilising the support of the right people has been clearly demonstrated. He has successfully persuaded a controversial minister, Mohamed Taslimuddin, to resign after a Bihar Assembly Committee found against him. In the Cauvery water dispute between Karnataka, Gowda's home state, and Tamil Nadu, Gowda sought the assistance of V.P. Singh and Murasoli Maran to reason with Karunanidhi. V.P. Singh has a good relationship with Karunanidhi and industry minister, Murasoli Maran, is Karunanidhi's nephew. As a result, Gowda's successor in Karnataka, chief minister J.H. Patel was persuaded to release some of the Cauvery waters to Tamil Nadu.
The main political parties are gearing themselves for the forthcoming Assembly elections in the centrally ruled state of Uttar Pradesh. The Congress (I) has already announced an electoral alliance with the Bahujana Socialist Party (BSP) of Kanshi Ram and is trying to woo the Janata Dal into an alliance to defeat the BJP. But Mulayam Singh Yadav, minister of defence in the UF government and a former chief minister in Uttar Pradesh, is intent on regaining the post for himself. The result of the battle for Uttar Pradesh is likely to have a bearing on the future of the United Front government at the Centre.Ladies, Ladies, please....
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