UPA steps into third year with hope, confidence

New Delhi, May 14: The Manmohan Singh government steps into its third year next week with the hope and confidence of completing its full term and a reasonable sense of satisfaction over its achievements on political, economic and external fronts.

The Congress-led UPA government's completion of two years in office on May 22 belies BJP's initial expectation that the coalition, propped up by a highly critical Left from outside, would crumble within a matter of months due to ''adverse'' planetary and conflicting political configurations.

It also signals the Congress coming to grips with the nitty-gritty of coalition politics which, according to political pundits, is here to stay for a long time -- a view endorsed also by the Prime Minister and his party President Sonia Gandhi.

However, the Congress suffered major political reverses at the state-level as it lost power in Karnataka in January following the withdrawal of support by the JD(U) and in Kerala after losing the just-concluded assembly elections to the LDF.

The party was able to offset these setbacks by returning to power in Haryana last year and retaining, at least partly, its rule in Assam and Pondicherry and helping its major Tamil Nadu ally, DMK, dislodge the Jayalalithaa government in the April/May elections, which also covered West Bengal.

The UPA's optimism about running its full five-year course at the Centre stems from the fact that it has successfully placated its on-and-off sulking allies and the vociferous Left, which often has threatened to go beyond barking to really bite, but without pulling the rug from under the government.

Even after their stupendous show in West Bengal to return to power for a record seventh time in a row and and in Kerala, leaders of Left parties have only talked of assuming a bigger role for themselves at the Centre, not of rocking the boat.

The UPA can also take heart from the political developments in the past one year which saw the BJP book major losses -- its former Chief Ministers Uma Bharti and Madan Lal Khurana parted ways and Mr L K Advani stepped down as party President after enraging the RSS with his comments on Mohammed Ali Jinnah. The BJP also took a body blow in the death of its General Secretary Pramod Mahajan, widely viewed as a Prime Ministerial material.

Also, the office-of-profit controversy which appeared to blow up in the face of the Congress was deftly turned into an advantage through the resignation of Ms Gandhi as an MP and her subsequent re-election with a thumping margin of over 400,000 votes in the Rae Bareli Lok Sabha constituency.

The bypoll also provided an opportunity to her son, Rahul, who was her campaign manager, to prove his political mettle, prompting the Congress President to indicate that elevating him in the party hierarchy is an idea whose time has come.

The crisis sparked off by the Paul Volcker committee, which had named the Congress and the then External Affairs Minister K Natwar Singh besides some other individuals and entities as non-contractual beneficiaries in the Iraqi oil-for-food deals, was managed by removing the Minister from the Cabinet and the setting up of the Justice R S Pathak Inquiry Authority, whose term was recently extended by three months.

The principal opposition at the Centre, however, had some solace as it won the assembly elections in Jharkhand and teaming with the JD(U) brought down the RJD-led government in Bihar.

If politics was a mixed bag for the UPA in the two years, economy was a virtual crowning glory, save disinvestment. The GDP growth has clocked about eight per cent, the free bull-run taken the sensex to an unimagined 12,000 plus mark and exports are in the 20 per cent range and the foreign exchange reserves at record levels. All this helped the government register a significant rise in tax collections and managed to keep inflation under control despite the rising crude prices in the international market, besides meeting the stiff targets for fiscal and revenue deficits.

On foreign relations, the government forged a historic agreement with the United States for cooperation in civil nuclear energy that is expected to end decades of India's isolation in the field in the international arena, subject to the US Congress' approval and the two countries going ahead with the planned reciprocal steps.

India-Pakistan relations, perceived to be dominating the country's foreign policy, looked up with the two neighbours taking several confidence building measures, including the launch of several bus and train services.

Notwithstanding its past record, the road ahead for the Manmohan Singh government appears to have in store an arduous journey with the Opposition and the Left alike ready to create several potholes as the UPA caravan embarks upon its third year of rule.

Among the tough challenges that lie ahead are carrying forward the economic reforms, particularly allowing FDI in the retail sector and disinvestment, the WTO negotiations, especially on agriculture subsidy, the assembly elections in the all-important Uttar Pradesh and Punjab around February next year, the inquiry report on the Iraqi oil-for-food scam and above all keeping the Left and the allies in good humour.

Dr Singh had, in an interview to the Financial Times of London last week, admitted that running a coalition has not been easy.

However, he said the performance of his government in the second year had not deteriorated as compared to the first year in office for which he had reportedly claimed six out of ten.

The other major tasks are finding resources for implementing the several mega projects, including Bharat Nirman, Jawaharlal Nehru Urban Renewal Mission and the National Rural Employment Guarantee Scheme, which would entail an outgo running into about Rs 5,00,000 crore.

The UPA government's political acumen and diplomatic skills will be subjected to another acid test on the Iranian nuclear issue when the UN Security Council decides to act tough against Tehran for going ahead with Uranium enrichment in violatin of its international obligations under the Nuclear Non-proliferation Treaty.

The immediate concern of the Centre, however, is to contain the Mandal-like agitation against the proposed OBC quota. Though, law and order is a state subject, the Centre has its fair share of responsibility since the development is a direct fallout of its move on the issue.

UNI