Failing at the Art of Politics

The FDI decision has created a crisis that everyone but the Congress could have foreseen

Industry confidence low, business leaders were complaining, the rupee was crashing against the dollar, GDP growth estimates were being revised downwards yet again (to 7 per cent or less), and nothing in the nature of reforms had taken place in the second term of the UPA at the Centre. The Government reacted by announcing a Cabinet decision to allow 51 per cent FDI in the retail sector in major cities. But what the Government had overlooked was that Parliament was in session, its own allies were going to be taken by surprise by the decision, and that an opposition searching for more reason to embarrass a beleaguered government was not suddenly going to act in what the Centre believed was the national interest.

Whatever the merits of the decision, it has compounded the Congress’ crisis. The Government finds Parliament deadlocked at a time when Anna and his cohorts are baying for blood outside. None of this was unpredictable. The only thing unexpected was that a party with such extensive experience of power seemed to have done no work on evaluating the timing of the decision and its possible political repercussions. There had been signs of this all through much of the UPA’s second term, but the latest fracas seems to suggest that the Congress has forgotten the very art of politics. For a party that has practised it so efficiently and ruthlessly for much of the country’s 64 years since Independence, this is nothing if not remarkable.

Call it a midlife crisis or failure of political instinct, the truth is that the party is looking increasingly helpless, and often clueless, in the face of one crisis after another. Worse still, each step the Government takes ends up embarrassing it even further. Coming at a time when the party is facing the formidable task of restoring an image left tarnished by its mishandling of Anna Hazare’s anti-corruption agitation as well as the 2G telecom scam’s fallout, the Union Cabinet’s decision on FDI in retail has left the Congress in disarray.

First, the opposition unity that had started weakening after a bout of success or two—think of the logjam in Parliament in the first few days of its winter session—suddenly got a boost in the form of the Cabinet’s guerilla decision. The FDI decision, in fact, came just when the Government appeared to have negotiated the holding of a House ‘discussion’ on black money with the BJP, while persuading the Left to postpone a contentious debate on inflation, issues on which it was not ready for a vote.

In their original stance, the BJP and Left wanted to move separate adjournment motions on black money and price rise, respectively. The deadlock appeared to be breaking on 24 November, but on that very day, the Cabinet gave FDI in retail its go-ahead. The BJP and Left were once again up in arms, both determined not to allow the Government to run Parliament until it withdrew its decision.

Second, the decision has left the ruling alliance divided. Two major UPA allies—the Trinamool Congress and DMK—have publicly switched over to the opposition on this issue, both demanding an immediate rollback of the FDI okay. The resultant political mess has seen even sworn enemies—such as the BJP and Left at the national level, AIADMK and DMK in Tamil Nadu, Samajwadi Party and Bahujan Samaj Party in Uttar Pradesh, and Left and Trinamool Congress in West Bengal—unite in their opposition to large foreign multi-brand retailers opening shop in India. At the same time, states like UP and Tamil Nadu have declared that they would bar such retailers on their geographical territory (as allowed by the rules), thus raising questions about the viability of such large-format retail operations by foreign companies, which would need to expand widely for their business models to work.

Third, even the Congress has not been immune to differences over allowing FDI in the sector. The party stands so openly divided on the issue that Ramesh Chennithala, chief of the Kerala PCC, shot off a letter on 27 November to Prime Minister Manmohan Singh opposing the move. Fearing that the Left (in opposition in Kerala) would capitalise on the issue by weaning away small and marginal retail shop owners, Chennithala also asked the state’s Congress-led UDF government not to implement the decision. “I have written to Prime Minister Manmohan Singh opposing the Union Cabinet decision to throw open the doors of the country’s retail market,” he told reporters.

All these point to another serious crisis for the UPA. Clearly, even before an ailing Sonia Gandhi left for her treatment abroad, Rahul Gandhi was already playing a far more active role in the party. But as a result, the communication between the Government and the party, which used to be mediated by the direct interaction of Sonia Gandhi and Manmohan Singh, seems to have slipped to a new low. Questions of the timing of the FDI decision could not have been settled in the Cabinet, which, after all, decides policy matters and includes representatives of the entire UPA. What it required was political inputs from the party to the PM on what (if any) would’ve been an appropriate time to make such an announcement from a political—as opposed to economic—point of view.

However important the economy may be, it is still only a part of the polity, and the party and its government seem to have no meeting ground to address this wider arena. The all-party meeting called to break the deadlock on 29 November failed utterly in resolving the issue. In general, the political parties opposing the decision demanded that either FDI in retail be rolled back or it be discussed in Parliament under an adjournment motion that entails voting. As expected, the Government accepted neither. For, a rollback would mean a severe loss of face, and allowing an adjournment motion could have meant risking the Government’s survival. At the end, Finance Minister Pranab Mukherjee, who presided over the meeting, promised that he would get back after talking to the PM. But he never did, and a few hours later, the PM, addressing a Youth Congress function, reiterated the country’s need for FDI in retail, saying that it would help contain inflation.

The PM apparently does not have everyone’s attention within his party. Even Sanjay Singh, family loyalist, ‘Raja of Amethi’ and Congress MP from the family borough of Sultanpur in UP, has distanced himself from the decision. He seems to have sensed trouble ahead in the upcoming UP polls. With politics in the state heating up, the Congress has been trying to revive its influence not just here but in the entire Hindi belt. Given its 2009 Lok Sabha election resurgence in UP, the Congress is hopeful of gaining clout in the Assembly, come 2012.

The state is crucial not just for an overall revival of the party, but also as Rahul Gandhi’s launchpad for prime ministership. At such a crucial political juncture, the Cabinet’s decision, instead of helping the party, may make the going harder for Rahul along the campaign trail. It is no surprise that the other major stakeholders in Uttar Pradesh—the BSP, SP and BJP—have sensed an opportunity in opposing retail FDI, as is evident from the unrelenting manner in which these parties have rubbished the decision. The BSP’s Chief Minister Mayawati has slammed Rahul Gandhi himself for the Centre’s decision, alleging that the move was made in aid of his foreign friends. “[The FDI decision] seems to be geared to please Rahul and oblige his foreign friends, even though it would finally prove perilous for the nation’s economy. If allowed, this would surely take India down the path of slavery,” Mayawati thundered.

On her part, Uma Bharti, the BJP leader in charge of UP, has threatened to “set fire to the first Wal-Mart store, whenever it opens here, regardless of the consequences…,” making it clear that, “I don’t care if they jail me for this.” Mulayam Singh Yadav, the chief of the SP, has been no less energetic in opposing FDI in retail. Not to be outshone, he too has echoed Uma Bharti’s threat to set Wal-Mart stores afire if they dared open in UP. “Our stand is that we will burn any such shop in the state—we will not allow it,” he said.

These proposed bonfires are political in nature, of course. Already, Congress leaders in UP fear that the ire of traders could hurt their party’s poll prospects. Ask, and they concede that the FDI decision may lose votes in a state where such traders constitute a sizeable and increasingly assertive vote base.

The jitters in UP reinforce mounting doubts about the political bearings of Congress party managers. But this is not the only indicator of a complete absence of political inputs that ought to go into Government decisions. Even in the handling of the anti-corruption agitation led by Anna Hazare and fallout of the 2G scam, the Congress-led Government faced similar embarrassments, first creating a political mess for itself, then desperately trying to figure out how to fix it, and finally losing its credibility in further attempts at damage control.

A few months ago, when Anna Hazare decided to go on an indefinite fast, the Government and Congress displayed a similar political bankruptcy. It all started with loud assertions by Congress ministers and spokespersons that Hazare and his small group of advisers were clothed in corruption, and had no right to take away Parliament’s power, and went on to threaten action against all those taking the law into their own hands and trying to blackmail the Government with such threats. Hazare was even detained early on 16 August, but the move merely ended up escalating the protests. Though Hazare was released that very evening, he had become a national anti-corruption icon by then.

Within 24 hours of facing a burst of public wrath, the party changed its tune. It claimed that it was Rahul Gandhi who’d secured the release of Hazare and persuaded the Government as well as party spokespersons to refrain from making personal attacks against Hazare and his team. At the end, the Government and Congress only appeared to be crawling to meet Hazare’s demands.

That the Government and Congress had developed a talent for letting crises spin out of control, ironically through their own attempts at damage control, was clear even in the 2G case. First, they tried to play around with the numbers. Kapil Sibal, having succeeded A Raja as Telecom Minister, declared earlier this year that the astounding figure of Rs 176,000 crore—the notional loss put out by the CAG report—was needlessly sensational and utterly erroneous. “These figures are on alleged losses and have no basis,” he pointed out, waving a sheaf of papers at a press conference. Demolishing the arithmetic of the CAG, Sibal concluded that the loss to the Indian exchequer on account of the Telecom Ministry’s lapses in awarding 2G licences was actually zero.

Sibal’s bid only made the Government a target of fresh attacks. The political tsunami that the 2G scam had touched off gained even more force, as it appeared that the Centre was trying to fool people. If anything, Sibal’s move only contributed to the erosion of the UPA-II regime’s credibility.

Even on the question of a Joint Parliamentary Committee (JPC) to probe the 2G spectrum scam, the Congress displayed a testy lack of political maturity. Initially, the party stood totally opposed to a JPC probe, even as the opposition refused to budge from its demand for one during last year’s winter session. The entire session was lost to this deadlock, but once the Budget session came round a couple of months later—with the opposition still seething—the Government relented. “We could not succeed in spite of our sincere efforts to persuade the opposition not to insist on a JPC probe,” the PM said, announcing a JPC probe, “We can ill afford a situation where Parliament is not allowed to function during the crucial Budget session. It is in these special circumstances that our government agrees to the setting up of a JPC.”

So, what was the point of the Government’s stance during last year’s winter session? Political maturity could have saved the session. Though most opposition leaders welcomed the setting up of a JPC, saying that it should not be seen as anyone’s victory or defeat, Mulayam Singh Yadav opted not to play the diplomat. As a result of the delay, he claimed, “The people of the country have learnt that the Government has something to hide.”

If the last winter session was a washout, the ongoing one may yet be salvaged. The Government is not entirely out of ideas, and has made a rare display of courage in okaying FDI in the retail sector. If it rolls the decision back, however, it would send out an unambiguous signal: the opposition can block anything it so wants. The other option for the Congress is to re-adopt its old trick of differentiating ‘the party’ from the ‘party-led government’. It’s easily done. But what if the electorate sees through it?

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