People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 28

July 10, 2011


UPA Government: Drift and Deception


Prakash Karat


THE spectre of corruption continues to haunt the government.  Nine months after the breakthrough in the 2G spectrum case, the UPA government has been hit by one corruption scandal after another.  At each and every stage, the image of the Manmohan Singh government has been dented.  The latest being the Supreme Court’s censure that the government is not showing seriousness in bringing back black money stashed away abroad and constituting a Special Investigation Team headed by a retired Supreme Court judge in place of the high level committee constituted by the government. 


A curious political situation has been prevailing.  The UPA government, which marked its completion of two years in office in May, is seen to be drifting devoid of any direction.   Faced with one corruption scandal after another, the government has tied itself up-in-knots – first in trying to evade the issue and then improvising to somehow limit the damage.


That the government is in trouble and adrift is recognised by even its greatest supporters. The big business and its lobbies bemoan the fact that the government has failed to push ahead with neo-liberal reforms.  There are dark mutterings about the loss of investor confidence.  The corporate media has been voicing the criticism that the prime minister is indecisive and ineffective, that there is a discord between what the government and the party is thinking and doing.  Some commentators have gone to the extent of saying that at this rate, the government will be a lame duck one even before it completes its third year in office. 




While the loss of direction is a fact, the situation is curious because there are no obvious factors for instability.  As far as the government is concerned, there is no political threat which has emerged.  None of the allies in the UPA have deserted them nor have any of the parties which have extended support to it from outside withdrawn their support.  Why then is the government appearing to be weak and beleaguered?  The answer to this has to be found essentially in the way high level corruption has been engendered threatening the very integrity and credibility of the government.  The wages of neo-liberalism are the corruption and the loot of public resources.  The government has been acting as the handmaiden and facilitator of this process.   The 2G spectrum case has dramatically exposed the nexus between big business-ruling politicians and bureaucrats, which itself is an outcome of the neo-liberal order.  The prime minister and the union cabinet is at the heart of this process. That is why the architect of liberalisation is now directly feeling the heat of these corruption scandals which are endemic to the policies and the framework that he has pioneered.


Representatives of all the three sections of the nexus are today lodged in Tihar jail – from big business, there are the CEOs and top executives of companies involved in the bribery case; from the ruling politicians, there is the former minister, Raja; and from the bureaucrats, there are the former secretary of the telecom ministry and other officials.


The “paralysis” in the government is precisely because the systemic nature of corruption, i e, the suborning of the State by big business, has been brought out into the open. The credibility of the executive has been further dented by the way the higher judiciary has come into play to check the  cancer of corruption which threatens to undermine the whole system.  At the political level, we saw how the issue of corruption played out in parliament during the 2010 winter session on the issue of the constitution of the joint parliamentary committee and the subsequent popular movements against corruption.


The inability of the Congress leadership and the UPA government to politically address the issue of corruption stems from the fact that it is inherent in the economic regime which it has instituted.  We saw the eruption of high level corruption earlier under the NDA government with the same economic regime.


Whatever firefighting tactics are adopted by the Congress-led government, the issue of high level systemic corruption will not go away.  Two union ministers, Dayanidhi Maran and Murli Deora are under the scanner. The KG gas field affair looms ahead with the CAG report awaited.  That the prime minister and the Congress leadership are airing their criticism about the role of the CAG and criticising judicial encroachment in the sphere of the executive shows how desperate they have become.   The demand for an effective Lokpal legislation has found widespread support among the people.  One may not agree with all the proposals for the Lokpal set out by the Anna Hazare group but the predominant feeling is that the government is bent upon diluting and whittling down the Lokpal to make it an ineffective body.


That the government is losing the battle for winning the minds of the people for its version of fighting corruption is resulting in the Congress leadership spinning the web of a conspiracy.  Recently, Pranab Mukherjee, the number two in the government  and the senior most Congress leader, has accused the BJP and the CPI(M) of ganging up to “support self-appointed messiahs” like Anna Hazare and Ramdev.  He alleged that the CPI(M) was helping their attacks on the parliamentary democratic system.  We should be grateful that the Congress leader has not added the Comptroller and Auditor General and the Supreme Court of India as partners in this conspiracy. As for parliamentary democracy, it is Pranab Mukherjee and his colleagues who have repeatedly displayed contempt for parliament. The latest instance being the postponement of the monsoon session of parliament by two weeks. Already, the budget session of parliament had been cut short by nearly a month due to the assembly elections in some states.


If Congress leadership thinks it can sidetrack the issue of high level corruption by raising the worn-out bogey of the BJP and the Left combining to attack it, it will find no response from the people.  The Congress-led government is in the dock because it has instituted the neo-liberal regime which spawns crony capitalism and high level corruption.


As for the BJP, its chief minister in Karnataka, Yedyurappa, thought of a novel way to tackle the serious charges of corruption against him. He does not believe in the Lok Ayukta or the courts to decide the matter. Yedyurappa wanted to visit the temple in Dharmasthala and let Lord Manjunatha deliver the verdict!  If the Congress has become a byword for corruption, the Hindutva style of fighting corruption has become farcical.




There are two other issues which have come up recently which illustrate the gap between the government and the people and how our rulers resort to deception and maneouvres to pursue their ill-conceived policies.  The UPA government has inflicted yet another price hike of petroleum products.  This time, in the prices of diesel, kerosene and cooking gas, while announcing the increase, the government also withdrew the customs duty of 5 per cent on crude oil and other petroleum products.  This is being heralded as a step to give relief to the people. It should be recalled that the 5 per cent additional tax was levied in the union budget of 2010-11.  The prices of petrol and diesel instantly went up.  At that time, the Left parties and the entire opposition had opposed this additional tax.  At the initiative of the Left parties, all the secular opposition parties gave a call for an all-India strike against this price increase.  Subsequently, the opposition moved a cut motion on the finance bill for removing this 5 per cent tax.  The government refused to do so and earned additional revenue by heaping this unwarranted burden on the people.  Now the government is withdrawing this increased tax without really making any basic changes in the tax structure which is highly iniquitous.


As pointed out in the editorial in People’s Democracy last week, the government earned Rs 1,36,000 crore from the petroleum sector in the year 2010-11.  Of this, the government spent Rs 40,000 crore as subsidy and oil bonds issue to the public sector marketing companies which is 20 per cent of the total contribution from the petroleum sector.  So, out of every Rs 100 earned as taxes and duties, only Rs 20 goes as subsidy, the rest is pocketed by the government. The tax structure for petroleum products illustrates how government policy is instrumental in fuelling inflation and price rise.




The third event which has occurred is the puncturing of the illusions fostered by the Manmohan Singh government about the Indo-US nuclear deal.   The Nuclear Suppliers Group (NSG) comprising 45 countries which met in June has adopted new guidelines about the export of enrichment and reprocessing technologies. The NSG has decided that such sensitive technology cannot be exported to non-NPT countries. So India, which is a non-NPT signatory, cannot import these technologies.  The Left parties had strongly opposed the Indo-US nuclear deal. One of the major reasons for the opposition was that this agreement would not lead to India getting technology for the full nuclear fuel cycle and will not result in full civilian nuclear cooperation. Much before the Indo-US nuclear deal was signed, the United States adopted the Hyde Act in the US Congress. This Act specifically prohibited the transfer of enrichment and reprocessing technology to India.


This went totally against the assurance given by the prime minister in parliament on August 17, 2006 where in he said : “We seek the removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy – ranging from nuclear fuel, nuclear reactors, to re-processing spent fuel, i e, all aspects of a complete nuclear fuel cycle.”


When the UPA government could not deny that such prohibition existed in the Hyde Act, they went on to claim that the `clean waiver’ provided by NSG would enable India to access such technology from other countries.  When India got exemption from the NSG to import nuclear reactors and fuel, it was claimed that we had a `clean waiver’ that would enable India to access all technologies for different stages of the nuclear cycle.  Prior to the NSG clearance, it was known that the United States had initiated along with the G-8 a proposal for a fresh guideline in the NSG to prohibit transfer of sensitive technologies to non-NPT countries which includes India.  Even then the prime minister and the government kept insisting that what they have got is a `clean waiver’.


With the NSG now passing the new guideline, the deception has been nailed. It was amusing to see the outgoing US Ambassador Roemer indulging in double speak when he claimed that the United States “strongly and vehemently”  supports the NSG `clean waiver’ for  India.  He cited the 123 agreement as evidence for this support but scrupulously avoided stating that the United States will supply enrichment and reprocessing technology to India.


What the Manmohan Singh government has done is to tie India into an iniquitous deal.  We have to buy American nuclear reactors and we can import fuel with certain conditions.  We can provide billions of dollars business for the American nuclear industry.  But here too, after Fukushima, no one in their right senses would go in for imported nuclear plants. But then, the Manmohan Singh government cannot be expected to do something so elementary as to safeguard India’s interests when it comes to dealings with the United States.