Manmohan on spending spree
It seems Congress thrives on controversies while it makes its opposition succumb to those surrounding them. Having mastered the art of weathering scams -- one after another in the last four years and seemed potentially devastating when they first unfolded -- the poll-bound party seems to be hell bent to court another round of political slugfest by dishing out permits, licences, subsidies and approvals worth almost Rs. 30 lakh crore ($ 500 billion) in their total business impact.
If successful, the assorted nature of approvals might become the biggest ever term-end ‘clearance sale’ by any government in history. The life of the present government could at best last another nine months.
The array of mega-approvals listed and some already given away by the Congress-led government comprise an undisclosed number of new bank licences waiting to be issued, 50 airports, 10 seaports, 23 big-ticket power projects, fresh allotment of dozens of coal blocks, environment clearance to a large number of stricken infrastructure and core sector private projects, award of highways and industrial corridors building contracts, airwaves auction, 74 per cent FDI permit across industry, including defence, telecommunications, banking, insurance and retailing, permission of massive gas price hike linked to global market rates to largely benefit the country’s largest private enterprise, Reliance Industries, food subsidy to ensure food security for 67 per cent of countrymen, subsidy to gas-based power and fertilizer plants and authorization of a one-sided bilateral air services agreement with Abu Dhabi to favour the country’s largest private airline among several others.
The proposed grant of fresh banking licence, which alone has potential to raise deposits worth several lakhs of crores of rupees, has created an unprecedented enthusiasm among bidders, including some habitual licence peddlers, with entry point investment requirement kept at a modest level of Rs. 500 crore. It is no wonder that quite a few small-ticket lenders, non-banking finance companies and known business wheeler-dealers have thrown their hat in the ring for banking permit along with a handful of large business houses representing the Tatas, Anil Ambani group, Aditya Birla group, L&T, Bajaj and the government’s own LIC and India Post.
The latter has lately fallen into bad times due to the collapse of the traditional government post-and-telegraph service and is surviving mostly on small-savings collections from the public. Post offices are already operating like savings banks with cheque facility and public outlets to sell imported gold.
The cost of two government approvals – food security and additional fertiliser and power subsidies to offset the impact on the industry and the common man of possible multiplication of the prices of offshore petroleum gas in the next three to four years from the original level of a little over two dollar per unit– alone could exceed Rs. 15 lakh crore ($225 billion) over the period. At least four opposition parties from two big southern Bay of Bengal basin states – Andhra Pradesh and Tamil Nadu , namely J Jayalalithaa’s AIADMK, Telugu Desam (TDP), YSR Congress and the Communist Party of India (CPI), have asked the union government to withdraw the gas price hike decision. The one-sided bi-lateral civil aviation deal with Abu Dhabi is bound to make state-owned Air India lose millions of dollars worth foreign air traffic business to Etihad and Jet.
But, having nearly succeeded in putting its key opposition into total disarray and confusion, the Congress-led union government does not seem to be in a listening mode any longer. The government has survived long enough after the split of Trinamool Congress and DMK, the two original regional partners of UPA II, from the ruling alliance through shrewd political manoeuvres using the carrot-and-stick method to secure support, whenever necessary, of parties such as SP, BSP, JD (U), LJP and JMM and almost totally isolating the main rival, BJP.
The food security ordinance and an apparent effort to establish a direct involvement of Gujarat Chief Minister Narendra Modi, BJP’s national campaign manager for the forthcoming Lok Sabha election, and former Gujarat home minister Amit Shah, the party’s poll campaign chief for UP, in the Ishrat Jahan ‘fake encounter’ case to put them behind the bars before the election, could prove to be the last political master stroke by the Congress party in its bid to lead the third successive government at the centre after the polls.
It appears that the government has almost successfully weathered the storm over a spate of corruption and bribery charges it faced over the last four years by seemingly influencing its investigating agencies, the proceedings of the Parliamentary accounting committee (PAC) and joint Parliamentary committee (JPC), and using the familiar go-slow method in the conduct of official investigations and enquiries against its ministers and leaders. The government is most unlikely to be fatally nailed by any of the corruption investigation reports and final judicial verdicts in pending corruption cases before the coming Lok Sabha election.
The kind of giveaways, having far reaching implications on the national economy and security, being dished out by the government gives an impression that the Congress party is arrogantly confident that it is in full control of the situation and political environment.
Instead, Congress strategists are talking in hyperboles about the government’s achievements and mocking at hopes raised by those sample surveys among some of the fighting regional opposition satraps providing them the indulgence of dreams of a much weaker Congress presence in Lok Sabha after the election and improving the prospect of each of them to become the next PM. But Congress is cocksure that it will have the last laugh in the election.