While Coal Minister Sriprakash Jaiswal of ruling Congress maintained that the investigation only showed the ruling dispensation’s commitment for probity (sic) in public life, the Opposition spokesman Prakash Javedkar said the raids and probe only “proved” his party’s persistent stand that there has been wrong doing in allocation of coal blocks to private operators.

The allegation of kickbacks and nepotism has hit Indian polity ever since the official auditor Comptroller and Auditor General (CAG) in its report estimated that by “avoiding” auctions, the state exchequer has suffered a loss of Rs 1.86 lakh crore ($37 billion) vis-à-vis resulting in windfall gains to private operators. Previous to that also the CAG reports had embarrassed government on 2G, CWG and Adarsh housing scams leading to resignation of a minister and imprisonment of politicians.

The Opposition has been demanding the resignation of the economist Prime Minister Dr Manmohan Singh for the “wrong doing” more so because during the period that has been scanned by the  CAG, Dr Singh himself was the country’s coal minister. The Opposition had also disallowed the functioning of the ongoing Monsoon Session of Parliament.

Pushed to the wall, the government resorted to the life saving drug called reforms and ushered in the biggest economic reforms in two decades allowing big foreign retailers like Walmart, foreign broadcasters and foreign airlines to invest in the country.

Under heavy pressure to kick-start India’s slowing economy, boost employment and improve the country’s hapless infrastructures, the government also announced hike in diesel prices and cap for LPG gas.

“The objective of the policy is to attract investment, create local manufacturing and employment,” said commerce minister Anand Sharma.

However, the Didi from Bengal lost her cool and after her 72 hour deadline ended, she announced withdrawal of support to the UPA regime.

Prior to that, remarks attributed to Prime Minister Dr Manmohan Singh have him saying that if his government would go down, it would go down fighting. Remember this is the same Prime Minister, who for months sounded a rather helpless mute spectator to the “compulsion” of coalition politics. And adding insult to the people’s injuries, when it came to inflation: he virtually mocked: “I am not an astrologer”.

On September 20, the day Trinamool Congress walked out of his ministry, Dr Singh chose to again mock at millions of Indians when he tried to preach that the “money does not grow on trees”.

Not many Congressmen have been able to defend him so far on this. The next day in high security Vigyan Bhavan, a shirtless lawyer, allegedly owing allegiance to Lalu Prasad Yadav’s party RJD, shouted slogans at him.

Whither Public Sector Oil Companies! When government hikes diesel price to help oil companies tide over financial crisis, the story is only half truth. In November 2011, the Trinamool Congress delegation had told the Prime Minister that applying service rules as provided under the Union Public Service Commission and bringing down “unnecessary expenditures” are the only ways to ensure profits for the public sector oil companies. Sources said in his brief intervention in the meeting with Prime Minister,  Sishir Adhikari, former MoS Rural Development, had told Dr Singh that state-run PSUs enjoy “indiscriminate privileges and perks” for their employees. “We have a situation wherein a mere guard of ONGC enjoys more perks and other emoluments than the chief secretaries in states,” he had stated urging the need to curb wasteful expenditures. The Trinamool leaders also had made a strong case of bringing the state-run oil companies under the provisions of section 15 of the Company Act and also ensure that the employees’ salaries and other emoluments are governed by the provisions as recommended by the UPSC. This was not an exception. From time to time, the public sector oil firms do come under fire. Even ruling establishment politicians have questioned the profits posted by the oil firms. In June 2012, a joint statement from the chairmen and managing directors of Indian Oil, Hindustan Petroleum and Bharat Petroleum said that while they had declared nominal profits of Rs 6,177 crore, this was only because of package from the government and the upstream oil companies ONGC, OIL and GAIL. People generally question that where as service were sole intention of these companies, in the name of pragmatic business modules this has been forgotten. Salaries and other perks paid to different categories of employees remain alarmingly high. In metro city Mumbai, ordinary engineers are provided with market house rent in posh colonies and cash-rich societies. There is also talk about avoidable tours by executives. However, the state-run oil companies dismiss the charges as mere ‘propaganda’. They claim incurring huge administrative expenses (nearly 90 per cent) of their entire costs going towards crude oil and products bought from outside and also because the rupee has depreciated sharply.

Perhaps the message is getting clearer that people are anguished with corruption as well as on the typical know-all ivory tower expert views of the Prime Minister.

“Yes, Prime Minister, “money does not grow on trees”. That is why governments must spend wisely and avoid scams like Coalgate,” says Chandana Devi, a housewife in Delhi perturbed over hike in LPG prices.

Nevertheless, in a rare prime-time speech to the nation for about 15 minutes, the Prime Minister said, “The time has come for hard decisions”.

“We need to do more, and we will do….Only rapid growth would generate millions of jobs the country needs,” he said and even drew parallels with 1991 when as finance minister he had engineered the opening of India’s failing economy, the liberalization.

Ironically, skeptics even vouch that the so called liberalization had actually legalized corruption and almost made a virtue of corporate corruption.

Close Scrutiny

Then comes the need to examine politically and in futuristic term, what does really the reforms mean.

According to Mamata Banerjee, “We need reforms. But reform does not mean to sell out everything to satisfy some sections of individuals.”

Unfortunately for Dr Singh the reforms process is generally being understood by common Indians today, as a tool to divert the attention from the series of corruption cases his government has embroiled into.

“The truth is the corruption and the gross impropriety in the name of coal blocks allocation will end at the Prime Minister’s doorstep. He has to do moral introspection and quit,” says BJP’s Arun Jaitley, the leader of the Opposition in Rajya Sabha.

The allocation of coal blocks for private companies for “captive use” had started in 1993, two years after Indian government with none other than Dr Manmohan Singh as the Finance Minister of India had launched the liberalized economic policies. This was done as government-own Public sector undertaking Coal India Ltd was unable to meet the growing demand.
 
Thus essentially coal block allocation is part of that reform process only. But the problem is crony capitalism or corporate corruption.

What has put the ruling establishment into quandary is that the ‘Coalgate’ scandal is perhaps the fifth corruption case that has hit them.

Prior to that in the last two years, mis-governance and corruption in government’s “own mirror”, the CAG report, had alluded to kickbacks and similar scandalous deals in the allocation of 2G Spectrum in telecom sector, organizing of the Commonwealth Games in Delhi, Adarsh Housing Society meant for family members of Kargil War martyrs and Civil Aviation to name a few.

All these have combined together to put the government and the ruling Congress, which has been governing India for about 50 years in last six decades, on the defensive ,if not, on the  mat.

The fungus of corruption has eaten into all spheres of life. The CAG is a constitutional body. The auditor’s report on Commonwealth Games and now on coal blocks allocation has definitely nosedived the credibility of the Prime Minister, who was credited till the other day for honesty.

The Didi from Bengal lost her cool and after her 72 hour deadline ended, she announced withdrawal of support to the UPA regime.

JD(U) chief and NDA convenor  Sharad Yadav is more angry as he calls for ‘sending back’ Dr Manmohan Singh to the place he worked earlier, the World Bank.

Now demystifying Manmohan Singh’s ‘big ticket reforms means understanding the real polity. “This is a desperate act of a student who has not studied the entire semester and wants to top the class by burning mid-night oil. It’s as if the government has come out of Rip Van Winkle slumber. The Washington Post article called the Prime Minister becomes a tragic figure,” Yadav says.

“The ‘underachiever’ Prime Minister, as Time magazine featured Dr Singh, now wants to become over achiever overnight,” laments CPI leader Gurudas Dasgupta.

On a different plane, now, post exit of Mamata Banerjee, on the face value, the government has managed to survive ostensibly with the support of highly unpredictable Mulayam Singh Yadav and of course Mayawati’s BSP.

Perhaps, the government is breathing easy. Moreover, the two UP-based players are not known for strong left-oriented anti-reform stance of Mamata. So far so good! The government survives; and if it survives the country can expect more reforms.

At least the stage is set for opening up pension and insurance sectors.

“The move to increase FDI caps in these sectors will help mobilize capital into these sectors, which the country needs and would also improve the current financial deficit situation,” says economic analyst Vidyarthi Kumar

Corporate players have, however, cheered the government move. “From a famine of policy action, we’ve moved to a feast,” tweeted Indian auto giant Anand Mahindra.

However, skepticism remains about real results coming in. The new reforms initiatives come with qualifications. In particular, foreign investors must make a minimum investment of  US $100 million, 50 percent of it in infrastructure.

Complex Issues

“It’s time even Sonia Gandhi realized that the Prime Minister is working at the behest of Americans and. . . . .

Moreover, the real polity is more complex. Ultimately, Dr Singh and Sonia Gandhi have to ensure victory for Congress.

Sharad Yadav has already taunted the ruling party. “It’s time even Sonia Gandhi realized that the Prime Minister is working at the behest of Americans and jeopardizing the future of thousands of small time shopkeepers”.
 
According to him, foreign direct investment will fuel unemployment at all levels, leading to major social problems. He also warned that India would witness trouble from Maoists and sectarian forces too.

Reaction from small businesses and the general populace has also been largely negative and that these have stuck cruel blows.

“It was a desperate act. But in the name of reforms, they have acted against the common man, especially against us small time shopkeepers,” said Vijay Agarwal, a retailer in Delhi.

Many people in the capital including shopkeepers, students and auto drivers  participated in the September 20, Bharat Bandh – India shutdown, something Congress has sought to brush aside.

The magical dynastic prowess too has failed and Rahul Gandhi is simply not the answer Congressmen and women are looking for.
 
These would make Mulayam Singh only more undependable especially for someone harbouring strong Prime Ministerial ambitions.
 
He is simply buying his time, playing his game. However, the concern area for him is that many regional players are staying away from him. BJD of Naveen Patnaik and AIADMK of Jayalalitha have snubbed him more than once. He also conclaved with Akalis once.

“I still do not have a guarantee that he (Mulayam) will not do the same thing again,” CPI-M leader Sitaram Yechury told Eastern Panorama alluding to Mulayam’s repeated betrayal to the cause of opposition unity and bailing out Congress since 2008.

BSP is eyeing to play its own game and asked Congress to show detachment from Mulayam to bank on her support. The Congress MPs are themselves not sure whether FDI can ensure their victory or defeat. The prophets of doom already predict a possible split in Congress rank and file and thus, the general election can come sooner, say November 2013.

In the meantime, FDI will remain on a table — to be utilized and debated as economic reform tool or something to be flaunted only in about 2 years from now!