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India India's Beleaguered Coalition Wins Respite in State Votes

Discussion in 'Breaking News' started by kds1980, May 13, 2011.

  1. kds1980

    kds1980 India
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    Apr 4, 2005
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    By Rupak De Chowdhuri

    KOLKATA | Fri May 13, 2011 8:09am EDT

    (Reuters) - India's beleaguered ruling coalition has managed to avoid a major voter backlash over a series of embarrassing corruption scandals, winning three of five regional polls and overturning two communist state governments, results showed on Friday.

    The coalition fared worse than expected in Tamil Nadu, where voters punished a regional ally over a $39 billion telecoms scam that paralyzed the national parliament for months and hit foreign investment in Asia's third-largest economy. But the loss came as no surprise. It also lost tiny Pondicherry state.

    But it took two states from the communists -- West Bengal in the northeast, where the world's longest serving democratically elected government was finally unseated, and Kerala in the south. It also won the northeastern state of Assam.

    Overall, the results were the first good news in months for the suddenly accident-prone government of Prime Minister Manmohan Singh. The main national opposition, the Hindu nationalist Bharatiya Janata Party, scarcely improved on its scant presence in West Bengal and Tamil Nadu, a sign Congress is still the party to beat ahead of 2014 general elections.

    "The election results will lead to some stability at the center," said R. K. Gupta, managing director of Taurus Mutual Fund. "It gives Congress more muscle to push through its reforms."

    The victory of populist Congress-party ally Mamata Banerjee's in West Bengal may stabilize the coalition. But the unpredictable maverick, who holds the balance of power in the national parliament, will prove a thorn in the side of government economic reform plans.

    "Regional forces are again asserting their importance, and the Congress will have to make all kinds of bargains and compromises to fit them in," said Ramachandra Guha, fellow of the Indian Institute of Management in Kolkata.

    The complicated post election scenarios highlight how Singh faces hard times in his second term amid signs the 78-year-old is increasingly out of touch with both reform-hungry investors and voters angry at inaction over corruption and inflation.


    Banerjee, a 56-year-old who wears a traditional sari with bathroom slippers and lives alone with her mother, is the latest in a string of women in this traditional society, like Congress chief Sonia Gandhi, who have risen to political power.

    Millions of Bengalis rebelled against three decades of communist rule that left a moribund state economy and a leftist government stuck in a Cold War time warp.

    It highlighted how many Indians were keen to embrace more free market policies that have helped transform much of India since 1991.

    "The people of West Bengal have won their freedom today," Banerjee said. "The victory is of hapless people who have faced exploitation, violence, and discrimination."

    Jubilant supporters thronged outside Banerjee's house in the state capital Kolkata, punching the air, dancing and shouting her name and waving their tricolor party flags. They pasted green paint on their foreheads to mark the victory.

    The final results, due in a few hours, may also define how aggressively the left-of-center government moves ahead with long-awaited reforms such as raising fuel prices and a land acquisition bill for farmers and industry.

    India's 30-share benchmark BSE index rose 2 percent, in part due to the election results.

    The loss in Tamil Nadu of a family-run dynasty may also be a silver lining for Congress, allowing Singh more leverage over a weakened ally.

    There is talk of a cabinet reshuffle in New Delhi after the election and a push by the government to pass bills in the July parliamentary session, including one to help industry acquire land from farmers.

    With neither of the main national parties -- Congress and BJP -- able to secure majorities in general elections, electoral power in India comes down to forging coalitions with regional allies, who often have chequered records.

    The results were a gauge of the political temperature in states that jointly make up a fifth of the 545-strong lower house of parliament and will help redraw the political map ahead of federal elections in 2014.


    India's 28 states, with strong linguistic and cultural identities, have a high degree of autonomy and their leaders are some of the most important powerbrokers in India, often blocking policies by the federal government.

    West Bengal sends 42 lawmakers to parliament and its long domination by the communists is one of the biggest reasons India's founding socialist ideas retain political currency even after two decades of market reforms.

    Banerjee's Trinamool party in West Bengal is the biggest coalition ally of Congress and holds the balance of power in parliament. Her victory may force the government to be more dependent on a mercurial partner opposed to several key economic reforms.

    Analysts say Banerjee's victory will give her a louder voice when the government mulls raising fuel prices or cutting down subsidies -- measures that are key to keeping the fiscal deficit at the targeted 4.6 percent of GDP in 2011/12, when slowing economic growth may see a sluggish tax intake.

    As the federal railway minister, Banerjee has kept fares untouched and expanded freebies. She has several times forced a deferral of decisions on raising fuel prices. Her party is also against more foreign investment in insurance.

    In Tamil Nadu, the regional DMK party facing a series of arrests over a telecoms scam is the second biggest coalition ally and Singh may be forced to switch allegiance to the likely winner, the regional AIADMK party, nearer to the 2014 election.

    Singh's government has been considering lifting controls on diesel and fertilizer prices and streamlining a bloated food subsidy program, but these measures are politically unpalatable given inflation is at nearly 9 percent.

    Rising tax revenue from an economy powering away at close to 9 percent growth has long let India avoid taking hard decisions on slashing expenditure, including subsidies on food, fuel and fertilizers that supporters say are needed to protect India's half-a-billion mostly rural poor from inflation.

    But growth this year is expected to slow down to 8.5 percent, weighed down by the nine rate hikes since last March aimed at curbing inflation.

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  3. kds1980

    kds1980 India
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    Apr 4, 2005
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    India: Mamata Banerjee routs communists in West Bengal

    Mamata Banerjee's supporters have been celebrating outside her house in Calcutta

    The world's longest-serving democratically-elected communist government has lost elections in the Indian state of West Bengal.

    The communists - in power since 1977 but now blamed for the state's economic decline - have conceded defeat.

    Mamata Banerjee's Trinamool Congress (TMC) is on course to win a landslide.

    In Tamil Nadu, a key ally of the governing Congress party has also been defeated following allegations of corruption which have rocked India.

    Vote counting is also taking place in two other states and the union territory of Pondicherry.

    The communists are facing a stiff challenge in the southern state of Kerala. In Assam in the north-east the Congress party looks set to be returned with a large majority.

    Correspondents say the results again prove that the focus has shifted to regional parties in Indian politics. The elections also provide a distraction from corruption scandals which have dogged the government for months.

    The election results will come as a breather for India's Congress-led government which has been battling corruption scandals for months.

    While the victories in Assam and Kerala will give the party a much-needed boost, it will be satisfied with its ally, the Trinamool Congress, heading a rout of the communists in Bengal. Ironically, the defeat of its ally, the DMK, in Tamil Nadu may end up helping the Congress as it will make the party less vulnerable to pressure from its powerful southern ally, two of whose leaders are charged with corruption.

    At the same time, the Congress will be also worried about the fact that corruption has emerged as a big issue in the polls in Tamil Nadu.

    That has led many party leaders to wonder whether it could end up hurting the party in general elections in 2013 unless it shows some resolve to crack down on corruption decisively.

    The Reds are out, the Greens are in!

    Although Congress will be pleased its ally has done so well in West Bengal, results from the south may give the party pause for thought ahead of general elections due by 2014.

    In Tamil Nadu support for its ally, the Dravida Munnetra Kazhagam (DMK), has slumped. In Kerala, Congress, which won 16 of 20 seats in the last general election, has also seen its vote share significantly eroded.

    Correspondents also point out that the mercurial Ms Banerjee will negotiate from a position of strength in future alliance talks, and her participation cannot be taken for granted.

    'End to autocracy'

    Ms Banerjee is a crucial federal ally of the Congress party and the two parties fought the election together.

    She says the communists have failed West Bengal's 90 million people by causing its economic decline.

    "This is a victory of democracy, victory of 'Maa, Maati Manush' [mother, land and people]," Ms Banerjee told her supporters after early trends gave her party a massive majority.

    "We will give good governance. There will be an end to autocracy and atrocities. This is the victory of people against years of oppression," she said.

    The BBC's Soutik Biswas in Calcutta says a large number of supporters have gathered outside her house, waving TMC flags and chanting victory slogans.

    By early afternoon India time, and with most votes counted, the scale of the communist defeat was clear and outgoing Chief Minister Buddhadeb Bhattacharya tendered his resignation to the state governor.

    The BBC's Sanjoy Majumder in Calcutta: People are celebrating

    Provisional results on the Election Commission website show the left-wing alliance winning only about a quarter of the 235 seats they took in 2006.


    In Tamil Nadu, the All India Anna Dravida Munnetra Kazhagam (AIADMK) opposition party, led by former film actress J Jayalalitha, has also won a landslide. Ms Jayalalitha's supporters have already begun distributing sweets and dancing in the state capital, Madras (Chennai).

    Her rival, DMK party leader Karunanidhi, has tendered his resignation.

    Correspondents say the DMK, a federal ally of Congress, is blamed by many for power cuts and price rises in Tamil Nadu.

    The anti-incumbency factor is also thought to have played a role in its defeat, as well as accusations that the state government failed to speak up for Sri Lankan Tamils.

    In Assam, Congress seems to be heading back to power with a large majority, while Kerala appears too close to call.

    More than 140 million people were eligible to vote in the assembly elections held over April and May.


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