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Wednesday, February 20, 2013

The bold decisions on economic policy reflect the growing clout of the Congress Core Committee, reports Pramod Kumar

The Congress, on the defensive over a spate of scandals, has suddenly got second wind. Ostensibly to boost the economy, the UPA is in the process of initiating a series of radical measures: the prime minister does not want to go down in history as a weak leader and what better way to demonstrate his strength than preside over the execution of economic reforms Part 2?

That Singh continues in office for a second term is a demonstration that the party is comfortable with him and his government's policies. The government is also persuading ministries that deal with social welfare issues tobegin programmes that benefit the 'last man standing' – at least in the run up to General Elections 2014.

The party's good news comes from president Sonia Gandhi's health bulletin.After being cleared by doctors, she is now fully in command and according to party sources, raring to go. Sources say indication of it has come in the growing clout of the party's Core Committee and the declining importance of the Congress Working Committee (CWC), when it comes to taking important policy decisions.

The power of the Core Committee flows from its attendees: Manmohan Singh, Finance Minister P Chidambaram, Defence Minister AK Anthony, Home Minister Sushil Kumar Shinde, Ahmed Patel, political aide to the Congress president and special invitees Rahul Gandhi and Ghulam Nabi Azad. It cannot get higher in the party and with an economist Prime Minister at the helm, the mood is to initiate reforms at a breakneck pace –as if to catch up on all that was left undone in the last three years or so.

Party leaders say that in recent months the prime minister has not been in the best of spirits. The constant opposition attacks on him personally and the government have left him exhausted. The current Core Committee of the Congress, despite its heavyweight attendance, misses the presence of its heaviest member, Pranab Mukerjee, the party's most important trouble shooter.

The prime minister, along with others, miss his experience and sage advice, mostly on how best to deal with a noisy opposition. Pranab, as the man who presided over most high-level committees of the government, was eminently suited to tackle thorny issues. "His advice (when he was here) to the prime minister was to ignore the opposition and continue to do good work," says a Core Committee member.

In his absence, the Committee which meets every Thursday, now has a carefully calibrated agenda in which agenda papers, in the manner of a Union Cabinet meeting, are circulated before the meeting begins.

Sonia's instructions are categorical: all those who attend should be well briefed on the agenda. Hence, say observers, the last four Core Committee meetings have seen key decisions: FDI in retail, discussions on Coalgate and hikes in petroleum and railway prices.

According to a member who attended, the discussions have been quite detailed. For instance, in the case of FDI in Retail, the political fallout of introducing it was discussed threadbare before the actual announcement. The committee mulled over all aspects, from the reaction of opposition parties to what its allies may do. In the end, they decided to take a calculated risk and it appears to have worked.

The party's calculation is indeed the right mix of pragmatism and opportunism. The way Congress sees it, in a bad scenario, the FDI bills would be defeated in the Rajya Sabha in the winter session of the Parliament. Worse, if the bills are defeated in the Lok Sabha and the government falls, it would continue to remain a care taker government, which would then seek to introduce provisions with the help of special ordnances.

Both Singh and Finance Minister P Chidambaram believe that the rupee has to be strengthened and if that means taking harsh decisions, then so be it. Party general secretary Digvijay Singh, told TSI, "The government is only interested in pushing through economic reforms so that the common man gets succour.''

Interestingly, after the Core Committee meetings were more or less unanimous that hard decisions were the need of the hour, new member Rahul Gandhi suggested that hard decisions needed to be pushed through with some sweeteners.

Soon after, social welfare ministries were issued instructions for inducing a little bit of populism to ease the impact of tough decisions.

One of the important outcomes of this calculated populism is relief to the country'sforest population. Honey, a major forest produce, will be brought under the category of agriculture products and a minimum support price, like in crops, would be paid. The Planning Commission is expected to give its final recommendations on the subject.

Likewise, attempts would be made to hasten the pace of the Jawaharlal Nehru Urban Development Programme in cities, prioritise low cost housing for the poor and a revision of rates for daily wage earners. The bugle for the elections have clearly been blown.

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