PM defends reforms as UPA woos parties after Mamata's exit

New Delhi: Heading a minority government after the Trinamool Congress withdrew support to the United Progressive Alliance and faced with an economy that is showing no signs of taking off, Prime Minister Manmohan Singh in an emotive address on Friday asked the nation to support his tough but unavoidable reforms measure taken over the last few days.

The Prime Minister reminded the country of the 1991 economic crisis while pointing out those opposing reforms today are the same people who were standing in the way of economic liberalisation then too even as the Congress was busy securing the support of others smaller parties to make up the deficit caused by Trinamool’s exit.

Singh said that tough times demand tough measures and the government cannot allow India to slip into a Europe-like situation where several countries had been downgraded and were on the brink of bankruptcy. He also made it clear that "money does not grow on trees" and subsidy bill must be contained.

Perhaps emboldened by Samajwadi Party chief Mulayam SinghYadav’s statement that he would continue to support the Congress-led UPA to keep the "communal" Bharatiya Janata Party (BJP) out of power, the Prime Minister, donning his economist hat, defended diesel price hike, cap on subsidised LPG cylinders and foreign direct investment in retail, saying the measures were a must to revive economic growth and control the precarious financial condition.

He added that FDI would benefit farmers and they shouldn't get scared by the critics. "I need your support in saving Indian economy; I don't want the Opposition to mislead you," said Singh.

Revealing that the government had run up a huge subsidy bill of Rs 1.40 lakh crore on petroleum products last year, the Prime Minister said, "If we had not acted, it would have been over Rs 2 lakh crore this year." The Prime Minister also pointed that while the subsidy on diesel was Rs 17 per litre, there was a hike of just Rs 5 per litre.

"To remove total subsidy on diesel, we needed to raise price by Rs 17 per litre, we raised only by Rs 5. Diesel is now widely used including by SUVs, won’t be fair to subsidise it," said the Prime Minister.

The Prime Minister defended the decision to put a cap on the subsidised LPG cylinders, claiming that most of the households in the country used just six cylinders in a year. Singh also said that the government had not touched the price of kerosene as it is used by the poor.

Defending the reform measures by his government, the Prime Minister said, "We have insulated you from global petroleum prices for long; our subsidy bill would have bloomed."

Meanwhile, UPA’s battle for survival continued despite Mulayam Singh Yadav’s assurance. The Congress has been in touch with other parties to ensure that the UPA has the numbers in the Lok Sabha in the event of a trial of strength.

The UPA’s strategy includes getting all allies to strongly stand by the government on reforms and keep Mulayam in good humour as his 22 MPs can provide the adequate buffer.

While Mulayam did say that he would be supporting the Congress to keep the BJP out, political analysts say that he would bail out the government only if it managed to survive without his help. If there was an indication that the number game has gone against the UPA, Mulayam would not hesitate to pull the plug as an early Lok Sabha election would help him win more seats in Uttar Pradesh and let him play a more decisive role at the Centre.

To keep the UPA guessing, Mulayam while announcing his support for the UPA also cautioned against FDI in retail. "We can't force mid-term polls. Ask Congress if they want it. Why should I withdraw support to Congress," said Mulayam.

The Congress is also eyeing the support of another Uttar Pradesh leader – Bahujan Samaj Party chief Mayawati, who can also play a very crucial role with her 21 MPs. Mayawati does not want early elections as she feels that anti-incumbency should percolate down in Uttar Pradesh before she could hope to gain.

UPA is also talking to smaller parties and fence sitters like Jharkhand leader Babulal Marandi, the Janata Dal (Secular) and Jharkhand Mukti Morcha to garner their support. With the indirect support of the Biju Janata Dal and Janata Dal (United), the UPA hopes to stem the anti-FDI tirade.

Surprisingly, sources in the Telangana Rashtra Samithi (TRS) said the party is keen on a possibility of merger with the Congress. Political discussions have been on for last two weeks on Telengana and there is a hope for a statement or clear indication from the Congress before September 30.

Without the support of TMC (19), the UPA (273) is 17 short of the half way mark of 271 in the Lok Sabha. But with support from the BSP (21), UPA's number tally would be at 275, which is four more than the half way mark. Similarly, with the support of the SP (22), its tally reaches 276 which is five more than the half way mark.

And together with both the BSP and the SP, UPA's tally would stand at 297.

Taking support from smaller regional parties like the RJD (4) and the TRS (2), UPA could cross the 300-mark. And if UPA is joined by the JDU (20), its numbers could stand at 323. Further with BJD (14) support, the number could be at 337.

The undecided numbers remain with the JMM (2) and the JVM (2).

Meanwhile, the Trinamool Congress' strategy is to continue targeting the UPA and blame it for adopting anti-poor policies. Mamata would also try to derail the UPA's reforms momentum and campaign that economic reforms haven't had a trickle down impact.

The TMC will also remain equidistant from the UPA, the NDA and engage with the Third Front. The party will also try for a sense of the House in the winter session of Parliament and position itself as leader of possible Third Front pack.

The way forward for the UPA government seems to be pushing ahead with reforms and disinvestment. This will boost investor sentiment and shift agenda from corruption and woo smaller parties like TRS by announcing measures like statehood for Telangana.

The UPA will in all likelihood target secular parties like the JD(U) and the BJD. The UPA can also bank on Mulayam and Mayawati to bail out the government during vote of confidence.

Moreover, the revenues earned from disinvestment should be pumped into big ticket social sector schemes as the dates for the next Lok Sabha election nears.