India Focus

S t r a t e g i c    A n a l y s i s    a n d    F o r e c a s t s

Vol 4, No 1

January 1999

Politics    •    Business        Economy    •    Society        Culture    •    Diplomacy

Major Political Trends

It has become difficult to keep up with the daily dose of political controversies, re-alignments, threats, splits, ousters, resignations, and wild speculations. A popular Naval Chief has been sacked (for the first time), government in six states (Delhi, Rajasthan, Maharashtra, Goa, Orissa, and as we go to the press, even Bihar) have either been removed or changed, an old political coalition almost collapsed over the game of cricket, brutal anti-Christian incidents have shocked the nation, and a senior BJP cabinet minister has resigned and spoken against the RSS (another historical first). Even for a country like India, where political volatility has become quite regular, these past few months have been a real roller-coaster ride.

Worsening BJP-RSS relations: Serious difference between moderate and hard-line elements (those owing loyalty to RSS) of the BJP have emerged for the first time, and the influence of the right wing RSS/VHP combine over a BJP government is at an all-time low. Prime Minister Vajpayee knows that this is perhaps his last, and only, innings at the helm, and he is following an increasingly independent (but also somewhat uncertain) course of action, both in economic and diplomatic fields. The RSS has few trusted friends left in the Cabinet, except LK Advani and MM Joshi, and the ministers of Finance, Power, Information and Broadcasting, Industry, Foreign Affairs and Communications are all either moderates, or have moved away from RSS thinking (like the Finance Minister). Advani is on the backfoot for his hasty statements related to attack on Christians, and over the last few months he has effectively been upstaged by George Fernandes as the second most powerful minister in the government.

Sonia Gandhi is already the 2nd most important Indian: Sonia Gandhi is now the undisputed leader of the Congress party, has reinvigorated party cadres after winning 3 state elections, and has initiated major organizational reforms, such as reserving 33 percent seats for women in all party posts and nominations. She is acting with quiet dignity and purposeful caution, and has established links with all important opposition leaders. The national media and visiting foreign dignitaries already treat her as the PM-in-waiting, and nobody -- not even Left parties, at one time bitterly opposed to the Congress -- talks anymore about the Bofors scandal or Congress corruption. Under her charge, the Congress is now going through a generational shift: younger leaders have emerged in important posts, and the Congress has the most media-friendly and suave public spokesmen. She has so far not responded to offers from other parties to join hands in toppling the Vajpayee government -- she is the only opposition leader who appears in no hurry to wrest power -- because she knows that, within the current parliament, her government would equally shaky and fragile.

BJP’s allies continue to huff, but have few choices: The threat of withdrawal from the coalition by some ally or the other has now become a weekly occurrence. Vajpayee has so far been rather patient with these tantrums, and has occasionally even placated sulking partners by giving in to their demands, but much of these threats are bluff and bluster. Many allies face problems in their own backyard, and need BJP help. The Akali Dal is close to splitting. The AIADMK has few political friends left, and not even the Congress would be able to overtly help Jayalalitha against corruption charges. Mamata Banerjee has now gone hand-in-hand with the BJP too far down the road to withdraw, and her public tantrums and frequent coverage in the media have ensured that many of her statements against Sonia Gandhi or the Congress party are now a matter of public record. And the TDP, perhaps the most important ally for the BJP, now faces a resurgent Congress in its home state, and therefore needs to stay with the BJP, at least till November when local elections in Andhra Pradesh will be held. There is a lot of talk about new political alliances and permutations, but the numbers and personal equations among Indian politicians do not favour an alternate government in the current parliament.

UF is getting marginalized, and desperate: The constituents of the erstwhile United Front are getting increasingly desperate because they see their economic and social base being eroded by a resurgent Congress, while their leaders are being personally marginalized between Sonia’s ascendancy and Vajpayee’s personal popularity. They continue to give out conflicting signals over possible support to a Congress government, but are largely united on one stand: nobody wants new elections soon. The only ones wanting fresh polls are the Communists -- most of their leaders are old, and may not be around very much longer -- who face declining support due to the emerging middle class. Relations between the Congress and UF have recently become cold, and it appears very unlikely that the two will get together soon.

OVERALL FORECAST: Despite appearing fragile, and despite occasional tensions with its allies, the current regime will survive at least until August ‘99.


Other Sections in January 1999 Issue

Industry Forecast: Part 1

Consumer Goods
Pharmaceutical & Health Care
Industry Forecast: Part 2

Oil & Gas
Industry Forecast: Part 3

Tourism & Aviation
Mining & Metallurgy
Ports & Highways
Political Trends Anti-Christian Agitation
Analysis & Implications
Economic Summary
(including Budget Forecast)

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