The second edition of the United Progressive Alliance, or UPA, may have chosen to celebrate its third anniversary in power with a certain degree of spurious self-congratulation, but it was the dining arrangements at the celebration dinner that should have prompted much greater optimism, at least for the coalition’s remaining two years in government. Samajwadi Party Chief Mulayam Singh Yadav’s place at the high table and brief but conspicuous conversation with UPA Chairperson Sonia Gandhi suggest that the government may finally be in a position to shake off the policy paralysis inflicted by coalition partners. The renewed Samajwadi Party-Congress bonhomie underlined the truism that politics is the art of the possible, and the numbers that Mr Yadav can deliver in the Lok Sabha could ease the passage of politically tough reforms, much of it glossed over in the “report card”.
The significance of Mr Yadav’s presence is this. The Samajwadi Party has 21 MPs in the lower House, two more than the Mamata Banerjee’s Trinamool Congress, the UPA’s most troublesome ally in its second stint. Certainly, the Congress must shoulder a large part of the burden for discouraging the global investment community, especially the burdens placed on the exchequer via imperfectly implemented populism, poor inflation management and an inability to stoke the policy environment for infrastructure investment. But equally, Ms Banerjee’s extreme devotion to populism has played a part too. If the rupee is resolutely weakening, the cause lies in her steadfast refusal to countenance a desperately needed fuel price rise. Her tantrum over foreign direct investment in multi-brand retail, which caused the government to backtrack cravenly, sent the worst possible signals to international investors. Her incandescence over railway passenger fare hikes and replacement of an eminently sensible railway minister with an MP known only for his unflinching commitment to his party leader suggest an inability to grasp the fundamentals of commerce.
In many ways, the Trinamool Congress has played the same obstructive role in UPA II that the Left parties played in UPA I (the difference being that the latter offered support from the outside and did not join the government). It may be recalled that it was the Samajwadi Party that helped the UPA push the Indo-US Civil nuclear agreement through Parliament when the Left declined to co-operate. Going forward, that is what makes a possible alignment with the Samajwadi Party significant. Mr Yadav has always displayed a consummate understanding of realpolitik, rarely allowing ideology to obstruct the path to power. The fact that he chose to break bread on Tuesday night with Congress General Secretary Rahul Gandhi despite the latter’s behaviour during the Uttar Pradesh state election campaign is a case in point. It is not yet clear what exactly he or his party will get in return — though his son and Uttar Pradesh Chief Minister Akhilesh Yadav has indicated various expensive demands – but the pay-off for the UPA is considerable. India urgently needs to return to a faster growth track, and it finally has a slim opportunity to do so.