Kolkata:
West Bengal chief minister Mamata Banerjee has pulled out of the UPA coalition, in which her party was the second-largest member.
Ms Banerjee said her six ministers will resign on Friday at 3 pm in protest against a menu of new reforms introduced by the government last week, including raising diesel prices, restricting the supply of subsidized cooking gas to six cylinders per household, and opening up India’s huge retail sector to foreign super-chains like Wal-Mart. Ms Banerjee described those decisions as “a disaster for the poor” and said her party had been shown minimal respect by the UPA.
Sources in the Congress say that party president Sonia Gandhi will now try to negotiate a compromise – while there will be no reversal of the retail reforms, the government may agree to a partial rollback in diesel prices, along with increasing the cap on LPG cylinders from six to nine per year.
The Prime Minister has , according to sources, driven home the point that he is committed to the reforms needed to jumpstart the economy; he allegedly told senior ministers that their government “must stay the course” and that it has “an unfinished agenda” for the economy for which it will allow “like-minded people” to help.
With the support of Mulayam Singh Yadav and Mayawati, the UPA still has more than 300 MPs on its side. It needs 272 to stay in power. But the government will now bw more vulnerable to demands from those partners, who are both opposed to FDI in retail.
Before it decided to implement 51% Foreign Direct Investment or FDI in retail, the government had calculated its political risks. Ms Banerjee has 19 Lok Sabha MPs. Mulayam Singh Yadav and his Samajwadi Party, who provide external support to the UPA, have 22. Mayawati and her Bahujan SAmaj Party have another 21. So though the UPA is in a minority without the Trinamool Congress, it can be propped up by Mr Yadav and Mayawati.
“Don’t take us for granted,” said the Samajwadi Party’s Ram Gopal Yadav after Ms Banerjee’s announcement, driving home the vulnerability of Dr Singh’s government. “We will not join the government. Any party that does so will be wiped out in 2014,” he said, referring to the next general election. Party chief Mulayam Singh Yadav also reached Delhi soon after Ms Bannerjee's decision. He is likely to meet parties across the board to see where the political winds are blowing, specially among non-Congress, non-BJP parties. He had earlier talked about "sowing the seeds" of a third front.
Another member of the UPA, the DMK, said this evening it will participate in a nationwide strike on Thursday against the centre and its decisions on FDI and the new diesel prices.
The Congress is now said to be counting on Mayawati’s Bahujan Samaj Party and some Independents to keep it in a majority in the Lok Sabha. Sources in Mayawati’s party say she will decide on her relationship with the UPA at a meeting of her party on October 10. The BSP has voiced demands very similar to Mamata Banerjee’s - a rollback in diesel prices and on the new norms for LPG. It also wants the government to withdraw the decision on FDI in retail. But unlike Mamata or Mulayam, who are riding recent electoral successes and would not mind mid-term elections to extend their gains, Mayawati is still smarting from her defeat in UP this year and she will not want early polls since she is unlikely to make too many gains.
West Bengal chief minister Mamata Banerjee has pulled out of the UPA coalition, in which her party was the second-largest member. Ms Banerjee said her six ministers will resign on Friday at 3 pm in protest against a menu of new reforms introduced by the government last week, including raising diesel prices, restricting the supply of subsidized cooking gas to six cylinders per household, and opening up India's huge retail sector to foreign super-chains like Wal-Mart. Ms Banerjee said today that the UPA had shown her party minimal respect, and had not consulted it on important decisions.
Sources in the Congress say that party president Sonia Gandhi will now try to negotiate a compromise - while there will be no reversal of the retail reforms, the government may agree to a partial rollback in diesel prices, along with increasing the quota of subsidized gas cylinders for families.
The Prime Minister has, according to sources, driven home the point that he is committed to the reforms needed to jumpstart the economy; he allegedly told senior ministers that their government "must stay the course" and that it has "an unfinished agenda" for the economy for which it will allow "like-minded people" to help.
Before it decided to implement 51% Foreign Direct Investment or FDI in retail, the government had calculated its political risks. Ms Banerjee has 19 Lok Sabha MPs. Mulayam Singh Yadav and his Samajwadi Party, who provide external support to the UPA, have 22. Mayawati and her Bahujan SAmaj Party have another 21. So though the UPA is in a minority without the Trinamool Congress, it can be propped up by Mr Yadav and Mayawati.
"Don't take us for granted," said the Samajwadi Party's Ram Gopal Yadav after Ms Banerjee's announcement, driving home the vulnerability of Dr Singh's government. "We will not join the government. Any party that does so will be wiped out in 2014," he said, referring to the next general election. Another member of the UPA, the DMK, said this evening it will participate in a nationwide strike on Thursday against the centre and its decisions on FDI and the new diesel prices.
The government's announcement on Friday that it was going ahead with 51% FDI in multi-brand retail was a surprise. Other reforms like allowing foreign airlines to buy stake in Indian carriers were expected. But the plan to allow a foreign party to pick up majority stake in an Indian partner to sell directly to customers meant that the government was ready to go head-to-head with Ms Banerjee. Last year, her strident opposition pushed FDI in retail into cold storage, a surrender that hurt foreign investor confidence and cast the government as a lame-duck administration unable to implement crucial decisions.
Ms Banerjee said her six ministers will resign on Friday at 3 pm in protest against a menu of new reforms introduced by the government last week, including raising diesel prices, restricting the supply of subsidized cooking gas to six cylinders per household, and opening up India’s huge retail sector to foreign super-chains like Wal-Mart. Ms Banerjee described those decisions as “a disaster for the poor” and said her party had been shown minimal respect by the UPA.
Sources in the Congress say that party president Sonia Gandhi will now try to negotiate a compromise – while there will be no reversal of the retail reforms, the government may agree to a partial rollback in diesel prices, along with increasing the cap on LPG cylinders from six to nine per year.
The Prime Minister has , according to sources, driven home the point that he is committed to the reforms needed to jumpstart the economy; he allegedly told senior ministers that their government “must stay the course” and that it has “an unfinished agenda” for the economy for which it will allow “like-minded people” to help.
With the support of Mulayam Singh Yadav and Mayawati, the UPA still has more than 300 MPs on its side. It needs 272 to stay in power. But the government will now bw more vulnerable to demands from those partners, who are both opposed to FDI in retail.
Before it decided to implement 51% Foreign Direct Investment or FDI in retail, the government had calculated its political risks. Ms Banerjee has 19 Lok Sabha MPs. Mulayam Singh Yadav and his Samajwadi Party, who provide external support to the UPA, have 22. Mayawati and her Bahujan SAmaj Party have another 21. So though the UPA is in a minority without the Trinamool Congress, it can be propped up by Mr Yadav and Mayawati.
“Don’t take us for granted,” said the Samajwadi Party’s Ram Gopal Yadav after Ms Banerjee’s announcement, driving home the vulnerability of Dr Singh’s government. “We will not join the government. Any party that does so will be wiped out in 2014,” he said, referring to the next general election. Party chief Mulayam Singh Yadav also reached Delhi soon after Ms Bannerjee's decision. He is likely to meet parties across the board to see where the political winds are blowing, specially among non-Congress, non-BJP parties. He had earlier talked about "sowing the seeds" of a third front.
Another member of the UPA, the DMK, said this evening it will participate in a nationwide strike on Thursday against the centre and its decisions on FDI and the new diesel prices.
The Congress is now said to be counting on Mayawati’s Bahujan Samaj Party and some Independents to keep it in a majority in the Lok Sabha. Sources in Mayawati’s party say she will decide on her relationship with the UPA at a meeting of her party on October 10. The BSP has voiced demands very similar to Mamata Banerjee’s - a rollback in diesel prices and on the new norms for LPG. It also wants the government to withdraw the decision on FDI in retail. But unlike Mamata or Mulayam, who are riding recent electoral successes and would not mind mid-term elections to extend their gains, Mayawati is still smarting from her defeat in UP this year and she will not want early polls since she is unlikely to make too many gains.
West Bengal chief minister Mamata Banerjee has pulled out of the UPA coalition, in which her party was the second-largest member. Ms Banerjee said her six ministers will resign on Friday at 3 pm in protest against a menu of new reforms introduced by the government last week, including raising diesel prices, restricting the supply of subsidized cooking gas to six cylinders per household, and opening up India's huge retail sector to foreign super-chains like Wal-Mart. Ms Banerjee said today that the UPA had shown her party minimal respect, and had not consulted it on important decisions.
Sources in the Congress say that party president Sonia Gandhi will now try to negotiate a compromise - while there will be no reversal of the retail reforms, the government may agree to a partial rollback in diesel prices, along with increasing the quota of subsidized gas cylinders for families.
The Prime Minister has, according to sources, driven home the point that he is committed to the reforms needed to jumpstart the economy; he allegedly told senior ministers that their government "must stay the course" and that it has "an unfinished agenda" for the economy for which it will allow "like-minded people" to help.
Before it decided to implement 51% Foreign Direct Investment or FDI in retail, the government had calculated its political risks. Ms Banerjee has 19 Lok Sabha MPs. Mulayam Singh Yadav and his Samajwadi Party, who provide external support to the UPA, have 22. Mayawati and her Bahujan SAmaj Party have another 21. So though the UPA is in a minority without the Trinamool Congress, it can be propped up by Mr Yadav and Mayawati.
"Don't take us for granted," said the Samajwadi Party's Ram Gopal Yadav after Ms Banerjee's announcement, driving home the vulnerability of Dr Singh's government. "We will not join the government. Any party that does so will be wiped out in 2014," he said, referring to the next general election. Another member of the UPA, the DMK, said this evening it will participate in a nationwide strike on Thursday against the centre and its decisions on FDI and the new diesel prices.
The government's announcement on Friday that it was going ahead with 51% FDI in multi-brand retail was a surprise. Other reforms like allowing foreign airlines to buy stake in Indian carriers were expected. But the plan to allow a foreign party to pick up majority stake in an Indian partner to sell directly to customers meant that the government was ready to go head-to-head with Ms Banerjee. Last year, her strident opposition pushed FDI in retail into cold storage, a surrender that hurt foreign investor confidence and cast the government as a lame-duck administration unable to implement crucial decisions.
