Jayalalithaa: Sorry for UPA?

Chennai, May 29: Jayalalithaa today appeared to blame Union finance minister P. Chidambaram for the Congress’s defeat in Karnataka, but said not a word against Sonia Gandhi.

Another hint that she was keeping her political options open relating to the Congress high command came in her failure to congratulate the BJP for its victory.

In an at best indirect compliment to the BJP, she said the poll outcome “reinforces the widespread feeling that the UPA’s popularity has waned”.

But she sounded almost sympathetic as she said the UPA government “could not have had a more disastrous start” to its fifth year in office, first with the Jaipur blasts and then the Karnataka verdict.

Observers felt the ADMK was still undecided whether to tie up with the BJP for the 2009 Lok Sabha elections. The minorities, who are 10 per cent of the electorate, seem to be Jayalalithaa’s main worry. In the 2004 general elections, the BJP-ADMK combine had lost all 40 seats in Tamil Nadu and Puducherry.

Jayalalithaa’s three-page statement began its analysis of the Karnataka verdict by saying two issues had “shaken” the Indian people in recent months: “unbridled inflation and equally unbridled acts of wanton terrorism”.

She then blamed Chidambaram’s “inaction” for both, accusing the government of failing to monitor terror funds.

The former chief minister focused on foreign institutional investors being allowed to invest in the Indian stock market through participatory notes (PNs). She said market regulator Sebi had confirmed that “anonymous PN investors” held one-fourth of the market.

The source of this “huge amount of money flowing into the country” is unknown and there is every possibility that militant outfits are using the PN route to “fund terrorist activities in India”, Jayalalithaa said.

She cited how national security adviser M.K. Narayanan had last year expressed concern that terrorist outfits could be investing in the Indian stock market. Yet the finance ministry “had done nothing about the system of PNs”, Jayalalithaa said.

She claimed that the controversial double-taxation avoidance treaty with Mauritius had emboldened the process of “slush funds going out of the country and being ploughed back as legitimate funds via the tax haven of Mauritius”.

Jayalalithaa ripped into Chidambaram for his “ominous silence” on these matters.

“Chidambaram has to do something tangible about these issues. Otherwise, it will have to be presumed that he has some vested interest in jeopardising the security of the Indian nation and the Indian people,” she added.