TNN | Jun 8, 2012, 04.20AM IST
NEW DELHI/KOLKATA: It was meant to showcase the government's new-found resolve to push the reforms agenda in order to stanch the declining growth rate and to repulse the perception of governance freeze. Instead, it ended up publicizing yet again the government's vulnerability as well as its reluctance to speed up decision making at the cost of angering allies on the eve of presidential poll.
The UPA on Thursday withdrew its enthusiastic move and deferred the pension bill after a resolute Trinamool Congress chief Mamata Banerjee put her foot down. Smarting under the CWC's annoyance over sputtering growth rate, the government had put the bill on the agenda of Thursday's Cabinet meeting. However, with Banerjee determined not to let it go through, the legislation — the third item on the agenda — was not even taken up for discussion. "Deferred", cabinet secretary Ajit Seth is learnt to have tersely remarked as he moved on to the next business on the list.
Banerjee, who had got the bill deferred earlier by stressing the need for wider consultations, refused to relent. Her nominee in the Cabinet, railway minister Mukul Roy, wrote to Prime Minister Manmohan Singh and finance minister Pranab Mukherjee on Wednesday night, repeating the argument that the Pension Fund Regulatory and Development Bill, 2011, should not be passed until there was a "broad-based consensus" for it.
The West Bengal CM, determined to overtake the Left in opposing reforms, had raised her ante higher, and wanted the bill to be dropped without even being discussed. Explaining her stance: she told TOI in Kolkata that "We cannot allow a bill that goes against the interests of the people. It is aimed at throwing open the pension fund to private players and foreign investment. We are committed to the people and cannot allow the post-retirement life of employees to become uncertain. If the bill is passed, the future of millions of retired employees will be under severe threat. That is what is feared if the hard-earned money of employees is thrown open to the market." She added, "Trinamool Congress is committed to the common people, and will not allow anything that goes against their interests."
"I have come to know that interests of employees were compromised during the UPA-I regime. We won't allow that once again," the Trinamool chief said, referring to the period when Left had a say in decision-making.
Not willing to take a chance, Banerjee deputed Roy, who had skipped the meeting of infrastructure ministries on Wednesday, to attend the Cabinet meeting, to drive home her point in case the PM had decided to press ahead with his desire to clear the legislation for parliamentary approval in Monsoon session.
Banerjee's latest veto should sting even more because of its timing. She chose to wield it just when the government was trying to beat back the gathering impression of inaction and drift, with the CWC on Monday goading it to get its act together. That explained why UPA chose to put it on the agenda for the meeting on Thursday when the Monsoon session of Parliament is scheduled for end-July.
The week has seen the PM trying to nudge his colleagues into swifter action, and a go-ahead for a reforms' legislation would have amplified the message of UPA getting back into the governance groove. At least this is what seemed to be the reckoning. Only Banerjee had other plans.
The fiasco has yet again trained the spotlight on the political deficit in decision-making, with senior Congress functionaries aghast about the continuing failure to do the political spadework before embarking upon ambitious ventures. The lapse has seen government suffering a series of embarrassments: from the outreach towards Pakistan at Sharm-el Sheikh to allowing FDI in multi-brand retail. Yet, it was manifest starkly over the PFRDA bill, which provides for the setting up of regulator to supervise the pension funds, and has been pending for several years. Prospects of its passage brightened when government, as part of a trade off, accepted the suggestions of Parliament's Standing Committee on finance to change some of the original provisions.
However, speaking after the meeting of the Cabinet, railway minister Roy said that the stand of the standing committee for the pension bill did not reflect the viewpoint of Trinamool. He said that Banerjee has no representative on the parliamentary panel since her last nominee Sudip Bandhopadhyay quit to join the government.
Significantly, Pradeep Bhattacharya, president of West Bengal unit of Congress and a Trinamool critic, is uncomfortable with certain provisions of the Bill. "The government should have discussed with leaders of central trade unions on certain clauses, though I do not think that the bill will push pensioners into uncertainty," Bhattacharya said.
Times View
All the apparent purposefulness of the UPA government over the last couple of days seems to have evaporated into thin air at the first sign of resistance by a difficult ally. This does no good for the image of this government or indeed for India's image in the world. Having lived with coalition governments for quite some time now, we should be able to manage the contradictions that are inherent in such an arrangement. In general, it is better for the government to not moot a step at all than to suggest it and then withdraw hastily. The latter course only adds to confusion and uncertainty in the minds of all, including investors. That is a recipe for economic woes, as we are finding out the hard way.
