The 58th birthday celebrations of the Congress president and chairperson of the ruling United Progressive Alliance, Sonia Gandhi, found her partymen in a more festive mood than at any time since the end of the Eighties. The last Congress government of P.V. Narasimha Rao never really inspired the party faithfuls with the confidence that he could retain or rebuild their mass base. Now, with a Congress-led ministry in place and a second generation of the Gandhis being groomed for a higher station in life, there is reason to celebrate.
A touch of realism may still be in order. Yet, the wave of expectations on which the present government rode to power will impose on it a very major responsibility. The slogan of 'Congress ka haath, aam admi ke saath' never quite had the emotive appeal and pull of another Mrs Gandhi, that is, Indira's call of 'garibi hatao' in the 1971 general election. The call to abolish poverty enabled the party to single-handedly rout a grand alliance of virtually all the non-communist parties. Indira led her party to a win in 352 seats. In a far more divided and fragmented polity, Sonia's 145 carried it across the threshold to power.
In doing so, she had to turn her back on her late mother-in-law's central legacy, the idea that India ought to be ruled both in New Delhi and in its states by one party. The question really is whether the Congress, having reached half-way up the hill, has the ideas and the energy to complete the job.
This does not take away from Sonia Gandhi's achievements but it does help put them in perspective. Six-and-a-half years ago, when she took over the party, it was unclear what strategy, if any, would work. The single largest factor in her success was the sure-footed way in which the ruling National Democratic Alliance underestimated her. Once she began forging ties with other parties and shed the Pachmarhi policy of a one-party monopoly on power, the tide started to flow her way.
Its predecessor in coalition building, the Bharatiya Janata Party, had a steady rise through much of the Nineties but seems to be undergoing a serious crisis at the moment. One place where it had signally failed in its six long years in office was to broaden a social coalition that could hold together and give it a consecutive five-year term in office. Having the machinery of government in hand gave it an air of invincibility, which was to shatter as the ballots were counted.
The Congress's dilemma is a different one. It needs to rebuild and expand its base of support while in office in New Delhi even as it is distant from power in several key states. Much will hinge on its economic performance and its ability to back up its promises on employment and growth with fairness, with programmes that work. Rajiv Gandhi's prescient remark that 'people's expectations are scary' should spur the government on.
The big ticket issue is how to or how not to expand the base of employment. The divide between those who would dilute and others who would retain a strong guarantee of employment in rural India reproduces the division among economists. But it also goes to show how things are moving forward, even though there are differences in the pace and scope of the movement. If nothing else, the clutch of employment schemes that now exist will be brought under a unified banner and the resources allocated will increase.
But political change cannot and should not be delinked from the changes in the configuration of economic power. The other major transformation is indirectly related ' though only indirectly ' to the feud within the leading business house of Reliance. Ever since Anil Ambani's entry into the Rajya Sabha with the support of the Samajwadi Party, it was clear there were elements in the family who saw their business as going beyond mere business. Further, the public closeness of the younger scion of the family with the Sahara group chairman and the Samajwadi Party leader, Amar Singh, could not have endeared him to the new ruling party.
But it all goes well beyond personalities to the renewed thrust on the public sector in the new regime. The political economy of petrochemicals and telecommunications, both critical to the wider Ambani empire, also looked and looks set for changes. Reliance Energy's 3,750 mega watt plant in Dadri in Uttar Pradesh has been much in the news. Only the public sector company, Gail, has the right to build gas pipelines that cross state borders. Transporting gas from the Godavari basin oilfield will entirely depend on cooperation from Gail.
The emphasis on the public sector found early expression in the call of the petroleum minister, Mani Shankar Aiyar, for considering the merger of the four big public sector companies. Were this to happen, the resultant group would have a valuation of at least Rs 240,000 crore, and (if smaller related public sector undertakings were included) possibly as much as Rs 300,000 crore. If the latter figure were the base, the resultant company would be about ten times the size of Reliance Petrochemicals and three times the size of the unified assets of all Reliance companies.
On a very different plane, the newest Reliance company, Reliance Infocomm, has been facing tough competition from Bharat Sanchar Nigam Limited. The telecom minister, Dayanidhi Maran, of the Dravida Munnetra Kazhagam, himself a former head of a leading cable television company, is pressing on fast with the merger of Mahanagar Telephone Nigam Limited and BSNL.
All this tends to make the government and public sector a much bigger player than was the case under the NDA. It also makes it difficult for any business house, no matter how large it may be, to antagonize the party in power. Nobody is privy to what the actual equations between the Ambanis, either of them, and the Gandhis are. But it can be said with some confidence that relations are not what they were in the times of Dhirubhai Ambani and Indira Gandhi. The government's role in the economy in the post 1991-era is very different from its stranglehold in the era of licences and permits.
But it would be folly to imagine that the Union government and public sector units are not players in the economy. The concentration of economic power in a large private sector business house would mark a major change not only for business but also for the way the government relates to the economic process. The loosening of ties within the Ambani clan comes at a time of a renewed assertion of the government's role in the economy.
It is nevertheless significant how much has really changed since the change of guard in summer 2004. It is a sign of the times that the largest debate under Atal Bihari Vajpayee was not how much and how fast to privatize key PSUs. The perspective now is to modernize profit- making public sector units and, where possible, as with oil, to enable them to be global players.
The latter half of the calendar year has seen not only a new ruling dispensation but also the beginnings of significant shots in welfare policy and also in the relationship of key elements of the public and private sectors. The revival of the Congress hinges not only on the issues of internal organization and leadership style but also on how it walks the tightrope and carries through the changes it has initiated.