New Delhi / Kolkata:
Mamata Banerjee's announcement last evening that she was pulling out of the UPA coalition, in which her party was the second-largest member, has sent the Congress into an early morning huddle. Top leaders of the party, most of them also senior ministers, will meet Congress president Sonia Gandhi and Prime Minister Manmohan Singh at 10 am. Ms Banerjee has pulled the plug in protest against a menu of new reforms introduced by the government last week, including raising diesel prices, restricting the supply of subsidized cooking gas to six cylinders per household, and opening up India's huge retail sector to foreign super-chains like Wal-Mart.
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The Congress core group - which includes the PM, Sonia Gandhi, AK Antony, Ahmed Patel and P Chidambaram - will meet at the PM's 7 Race Course Road residence to assess where they stand. Congress sources say Mamata Banerjee's decision needs a political call as a new situation has emerged that is threatening the government.
Ms Banerjee's announcement yesterday reduces the Manmohan Singh government to a minority. It now has to see where it will get the numbers to survive its term - BSP chief Mayawati is being seen as crucial to its plans.
While announcing that she was exiting the UPA, Ms Banerjee also said that her six ministers will submit their resignations only on Friday. Senior members of her Trinamool Congress denied that the next 72 hours provide a window for compromise.
Sonia Gandhi, who is also the UPA chairperson, has reportedly decided to raise Ms Banerjee's objections with the government.
Ms Banerjee has rejected the centre's decision to increase diesel prices by Rs. 5, place a cap on subsidised gas cylinders and allow Foreign Direct Investment or FDI in multi-brand retail. A compromise, navigated by Mrs Gandhi, could lie in a partial rollback of diesel prices and increasing the number of subsidized gas cylinders per household. There will be no rethink of FDI in retail.
The Prime Minister has told senior ministers that they must stay the course on introducing reforms. Sources say he said that the government has "an unfinished agenda" for the economy and will count on "like-minded people" to help out.
Ms Banerjee said her party, the second-largest member of the coalition, had been shown minimal respect by the government and had not been consulted on important decisions. Her decision came after a three-hour consultation in Kolkata with her party's state and national legislators.
The government had rejected her 72-hour deadline that asked for a rollback of the new policies. Finance Minister P Chidambaram had said that there is no question of any reversal, and that the government would bring its allies on board.
Regional powerhouses like Mulayam Singh Yadav and Mayawati can prop up the government. Mamata has 19 Lok Sabha MPs; Mr Yadav has 22 ; Mayawati can offer the support of another 21. Both Mayawati and Mr Yadav have committed their external support in letters to the President. However, both are opposed to FDI in retail. Mayawati will make a call on her relationship with the UPA on October 10 at a meeting with senior party leaders.
The government has stressed that states have the freedom to decide whether to allow FDI in retail. Ministers have said that while Ms Banerjee may oppose the reform in her state, others would like to implement it. Ms Banerjee's party says that once super-chains like Wal-Mart enter some parts of the country, they will lobby and pressure the government to open other regions to them. Last November, the cabinet cleared the proposal to allow foreign companies to buy majority stake in Indian firms to sell directly to customers but the policy went into cold storage after Ms Banerjee threatened to exit the government.
(With input from Agencies)Post a comment