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Govt takes political insurance
- Second wave of reforms primarily aimed at exposing Opposition stand

New Delhi, Oct. 4: The UPA today green-lighted a second wave of decisions that drew a vow of vengeance from Mamata Banerjee but sources said the government’s fresh drive was tied more to political strategy than a legislative push on economic reforms.

“It is a question of mood, not numbers,” said a senior minister, responding to questions on the government’s strength to pass the related bills in Parliament.

The two most contentious decisions taken by the Union cabinet today — 49 per cent foreign investment in insurance and pension funds — need to be passed in Parliament to come into force, unlike FDI in retail that was notified through an executive decision.

Mamata this evening issued an open call for a no-trust motion against the “minority government” for taking the “immoral and unethical” decisions. The Samajwadi Party has said it will not support the cabinet decisions on foreign investment.

The BJP has taken an ambiguous stand, though it had earlier taunted the government for not showing the spunk to take policy decisions.

The fate of the bills, however, does not appear to be vexing the government at present. It was content taking decisions on a single day that required a 30-page media release. It is also happy to shed the “policy paralysis” millstone — the BSE sensex today crossed 19000 points for the first time in 15 months.

Asked if Mamata’s exit helped the government develop wings, finance minister P. Chidambaram smiled and then quickly deadpanned: “No political questions will be answered.”

Such is the sense of relief in the UPA at being able to take decisions that some ministers suggested it wouldn’t mind bowing out of office on reforms as, at one point, it almost looked like being kicked out because of corruption scandals.

The government will not fall even if the two pieces of legislation are voted out in the House as they are not money bills. But the government feels that such an eventuality will expose the opposing parties, especially the BJP that swears by governance when it suits the party’s purpose, to the criticism of blocking reforms.

Asked if the BJP would let the government pass the bills, Chidambaram gave a terse reply: “It depends on what you support. The BJP is on record saying they are pro-reforms.”

The BJP had said it wanted foreign investment in insurance and pension funds capped at 26 per cent and the parliamentary standing committee had supported that position. But the government decided to make the cap for pension funds similar to that for insurance (49 per cent), citing paucity of domestic investments and need for large infusions of cash.

Asked about the lack of support in Parliament, Chidambaram said: “I don’t think we should jump to conclusions. Lawmaking is a process of discussion and negotiations. I have given a list of bills that deserve to be passed to the leaders of Opposition in both the Houses. We have accepted the bulk of the recommendations of the standing committees that have members of different parties. We hope to pass the bills in the winter session.”

The government feels that it has sent out a bold message to the pro-reforms lobby and the world, which are also aware of the limitations in a parliamentary democracy. The UPA is hoping that now that the ball is in the other court, the blame too will fall that side if the bills fall through.

That’s why the government went ahead with so many decisions at today’s cabinet meeting in spite of the absence of crucial allies like the NCP and the DMK. Asked if these allies supported the decisions, Chidambaram said: “Why should we presume they don’t?”

From the Congress, too, the government had found unequivocal support yesterday when Sonia Gandhi forcefully referred to FDI in retail at her first election rally in Gujarat. In the past, the party had rarely mustered the courage to seek votes on the reforms agenda.

But Sonia surprised many by defending the tough decisions and asking at the rally, “Itna hungama kyon (why so much fuss?)”