UPA II report card: Downfall continues, proxy war on, future imperfect

The only silver lining for the Congress is its huge victory in the Karnataka polls, which indicates that all is not lost for the party

Time was when the aam aadmi hailed him as the liberator of the economy, a modest soft-spoken economist, an honest man surrounded by probably corrupt, capricious allies. That image was shattered in no time as the United Progressive Alliance began its second innings. The secret of the Congress-led UPA’ longevity lies almost completely in the contradictions inherent to coalitional politics. Despite Mamata Banerjee’s Trinamool Congress’s exit and the Dravida Munnetra Kazhagam’s departure, the united Opposition failed to topple Team Manmohan on the floor of the House. The Bharatiya Janata Party didn’t even attempt despite the UPA’s obvious lack of numbers in the Lok Sabha and its apparent unpopularity outside. 

 

The government hangs by a thread, which no party seems able or willing to cut. Political pundits are of the view that the Manmohan Singh-led government was a boat with several holes that was bound to sink but it overturned the logic in the past nine years to keep itself afloat. It is no exaggeration to say that Singh’s biggest achievement has been to keep Congress in power for almost a decade.

 

For Singh, 2009 was a priceless mandate. Experts believe that his unofficial power-sharing agreement with Congress chief and UPA chairperson Sonia Gandhi has tied his hands. The most serious difference of opinion between Singh and Gandhi arose over the fate of senior cabinet ministers Pawan Bansal and Ashwani Kumar.  Singh is pro-free market and she strongly believes in socialist ideology -- a larger role for the state. Ironically, Singh, who has been called the father of India’s economic reforms, could not launch much-needed second-generation reforms as Prime Minister during UPA-I and UPA-II as well.

As UPA II is set to celebrate its last anniversary before 2014 general
elections, Business Standard examines the performance of the
government at the end of its fourth year

...  Bouquets  

. Direct Cash Transfer 

The DCT scheme provides cash benefits to the needy through Aadhar-linked bank accounts. It was launched on January 1 in 20 districts in six states and three union territories.

The government termed it as a game-changer and was expected to increase liquidity in the system as more money is made available to consumers.

 

Reality check: Several glitches have surfaced in its implementation and its impact is yet to be felt by the people.

. Food Security Bill

On May 7, the UPA government made an attempt to pass the Bill in the Lok Sabha. It was seen by the Congress as a remedy to all its ailments.

The National Food Security Bill was introduced in the Lok Sabha on December 22, 2011, and sent to a standing committee.

 

At the coverage and entitlement now proposed, the total estimated annual grain requirement will be 612.3 lakh tonnes and the corresponding estimated food subsidy in 2013-14 cost will be Rs 124,747 crore. Compared to the estimated food subsidy requirement under existing, the total additional food subsidy implication will be around Rs 23,800 crore a year.

 

Reality check: The food security bill is still pending in Parliament after going through years of grinding debate

Karnataka Victory

A Congress win in Karnataka was a foregone conclusion. It was the margin by which it won that has come as a real surprise even to the party.

The grand old party has managed to perform so well despite the shroud of gloom and doom attached to it nationally shows that all is not lost for the party, especially in areas where it has strong roots and a relatively robust organisation.

Reality check: The Congress must remember that the victory is not enough to suggest that the people of the country are happy with the performance of the Central government. It also does not indicate that the masses will tolerate corrupt practices.
ALSO READ | After nine years in power, UPA faces questions of credibility

. Poverty Declines

Poverty has declined on an average of 1.5% during nine years of the UPA regime but inequality between the richest and the poor has increased, the Economic Survey for 2012-13 has said.

The survey said the fall in poverty numbers by 54.2 million can be attributed to increased spending of the government on social sector and gains from high economic growth. "The central government expenditure on social services and rural development has increased 14.77%...showing higher priority to this sector," the survey said.

Reality check: One in three of the world's poorest people are living in India, the world's second-fastest growing economy, according to a new study by the World Bank

. Retail FDI

On December 5, 2012, the Lok Sabha voted in favour of allowing foreign supermarket chains such as Walmart, Tesco and Carrefour to set up shop in India, after two days of heated debate on the issue.

In 2011, the UPA government announced that it was opening its $450bn retail sector to foreign supermarkets to strengthen and increase the efficiency of its farm-to-fork supply chain.

 

Reality check: Foreign direct investment into the country fell 38% in the 11 months through February. The Center for Monitoring Indian Economy, a think tank, reckons new capital investment announcements in the March quarter dropped 75% from the same period last year.

. Land Acquisition Bill

The government was set to roll out Land Acquisition, Rehabilitation and Resettlement Bill through the ordinance route. The Land Acquisition Bill proposes the payment of compensation that is upto four times the market value in rural areas and two times the market value in urban areas.

It seeks to compensate 50% to the original farmers whose land has been purchased after the introduction of the Bill in Lok Sabha on September 5, 2011. The Bill will replace the current Land Acquisition Bill, which dates back to the 19th century.

 

Reality check: The fate of the bill still hangs in balance. It is being perceived as a popular poll plank for the government even as several sticky areas continue to dog the Bill.

. Diesel Decontrol in Doses

In January 2013, the government took its first decisive step towards deregulating diesel when it allowed oil refiners to raise prices “from time to time”.

India plans to trim its subsidy bill for food, fuel and fertilizer to Rs 1.9 lakh crore ($34.9 billion), or 2% of gross domestic product, this financial year. The state refiners lost Rs 73,820 crore from selling diesel below cost in the nine months ended December 31.

... Brickbats

. Economy in Mess

The Reserve Bank of India has said the space for monetary policy to support economic growth remains constrained by elevated consumer-price inflation and a record current-account deficit. India’s economy expanded at the weakest pace in a decade last fiscal year, and wholesale-price inflation slowed in March to a more than three-year low even as consumer inflation held above 10%.

Further reforms, such as a push to increase the limits on foreign ownership in insurance and a land reform bill, stalled when the latest parliamentary session ended early amid noisy political acrimony.

. Allies Dump UPA

When the government was entering the last year in office five allies – the Trinamool Congress, DMK, VCK, AIMIM and JVM - pulled out and two more scams – Coalgate and Railgate – shook the alliance. 

 

Perhaps for the first time in Parliament history, an entire (winter) session was washed out following the standoff between the government and the Opposition on the latter's demand for a Joint Parliamentary Committee probe into the 2G scam.

. Coalgate

The Comptroller and Auditor General (CAG) of India's report on coal blocks allocation created a massive upheaval in political circles with the government being heavily criticised for causing a Rs.1.86 lakh crore loss to the exchequer.

The CAG came to the conclusion that the government's decision to not auction 194 coal blocks between 2004 and 2011 meant that the country lost a huge amount in revenue.  In Coalgate, the Prime Minister was also the coal minister when the controversial allocations, now under investigation by CBI, were made.

. Railgate

Pawan Kumar Bansal's  fall from grace has come as a shock to the Congress, which had got the railway portfolio after 17 years and had promised radical reforms. On May 3, news about a Rs 10 crore bribery scam involving the railway minister was out for the first time.

Reports said that Bansal's nephew Vijay Singla received Rs 90 lakh part payment for the transfer of railway board member Mahesh Kumar from Member (Staff) to Member (Electrical), which is considered a lucrative posting.

The actual money involved in the transaction was Rs 10 crore which would be distributed among the other officials involved in the transfer of Kumar.

HAPPENING TIMES | Some pivotal moments of UPA-II government

• May 22, 2009: Manmohan Singh takes oath as prime minister of UPA-II government
• Oct 22: Congress wins polls in Arunachal Pradesh, Haryana; wins in Maharashtra in alliance with NCP
• April 1, 2010: Right to education becomes a fundamental right
• April 18: Shashi Tharoor resigns as minister of state for external affairs after a row over his links to the Kochi Indian Premier League franchise bid
• Nov 9: Maharashtra Chief Minister Ashok Chavan resigns over Adarsh Housing Society scam; Congress removes MP Suresh Kalmadi as secretary of parliamentary party following allegations of corruption in the preparations for the Commonwealth Games
• Nov 14: DMK's A Raja resigns as communications and IT minister over 2G spectrum allocation scam
• Nov 16: CAG's report on the 2G controversy tabled in parliament
• Feb 17, 2011: Government cancels controversial S-band spectrum deal between Antrix, the commercial arm of ISRO, and Devas Multimedia
• Feb 24: Joint Parliamentary Committee (JPC) set up to look into the 2G spectrum allocation controversy
• March 3: Supreme Court quashes appointment of P J Thomas as central vigilance commissioner as appointing panel did not consider a pending criminal case against him
• April 9: Govt forms joint drafting panel on Lok Pal Bill following a fast by social activist Anna Hazare
• April 25: CBI arrests Kalmadi
• May 13: Congress wins polls in Assam, Kerala; loses Puducherry, Tamil Nadu and bypolls in three states; wins in West Bengal as junior partner of Trinamool Congress
• May 20: DMK MP Kanimozhi arrested in 2G spectrum scam
• July 7: Dayanidhi Maran resigns as textiles minister after allegations of his role in the 2G spectrum allocation scam when he was telecom minister
• August 27: Parliament passes resolution in support of Lok Pal Bill
• December 3: Decision to allow foreign direct investment in multi-brand retail put on hold
• February 2, 2012: Supreme Court declares 2G spectrum allocation illegal
• March 9: Congress wins Assembly polls in Uttarakhand and Himachal Pradesh; BJP retains Punjab
• March 16: Finance Minister Pranab Mukherjee proposes changes to tax rules with retrospective effect, which means closed tax cases could theoretically be reopened
• August 1: P Chidambaram becomes finance minister
• Sept 17: Trinamool Congress withdraws support to UPA
• Oct 17: DMK withdraws support
• Nov 12: Govt auctions 2G spectrum on court directions
• Nov 21: Terrorist Ajmal Kasab hanged
• Dec 5: UPA wins vote on foreign direct investment in multi-brand retail
• Jan 2, 2013: Govt launches direct cash transfer scheme in 20 districts
• Jan 19: Rahul Gandhi becomes Congress vice-president
• Jan 23: Justice J S Verma panel gives recommendations to stop crimes against women; panel set up after gang-rape of 23-year-old paramedic student in December
• Feb 9: Afzal Guru hanged for his role in Parliament attack
• April 18: Draft report of JPC on 2G spectrum allocation scam leaked; report gives clean chit to PM
• May 8: Supreme Court raps CBI for sharing coal block allocation probe report with govt; says Centre should ensure CBI has autonomy; Congress wins Karnataka Assembly elections
• May 10: Ashwani Kumar resigns as law minister for his role in changing a CBI draft probe report on the coal block allocation scam; Pawan Kumar Bansal resigns as railway minister after his nephew was arrested for accepting a bribe from a Railway Board member for a plum posting