The bugle sounded, but elections only in 2014
It had been our consistent view in past many months that the
Congress is completely in election mode. They have a strategy and executing
that well, so far.
The Congress strategy appears to be focused primarily on:
(a)
Diverting the popular debate away from
corruption and non-governance to economic (price rise) and social (food and
women security) issues.
(b)
Weakening NDA and work on reconstitution of UPA.
(c)
Present a transformed youth looking party image
to people.
(d)
Keep the government alive till May 2014, and
demonstrate Congress’s ability to run governments in adverse conditions and
wait for inflation situation to improve a little.
By completely ignoring the concerns of DMK on A. Raja, Kanimozhi
and Sri Lanka, the Congress has endeavored to show distance from DMK and thus
2G scam. The other side of this coin could be an attempt to come closer to
AIDMK whose leader has appreciated Narendra Modi but has remained non-committal
on issue of joining NDA. Similarly, it has distanced itself from Jagan Reddy in
Andhra Pradesh, but got promise of support from his mother.
Knowing well that Congress will have to choose between Mulayam
Singh Yadav (MSY) and Mayawati before next election, they have been
systematically increasing distance from MSY. Steel Minister’s recent statement
should be seen in this context. The pictorial proximity to Nitish Kumar is also
an attempt to create confusion in NDA’s rank.
There had been a concerted effort led by the finance minister in
past 6months to present a reform oriented, progressive, and business friendly
image to the media and the world. Sudden influx of youth leaders like Pilot,
Scindhia on TV channels and media events, in conjunction with anointment of
Rahul Gandhi as crown prince is aimed at conveying the message that the
Congress has transformed and should not be judged by the governance record of
past 10years.
Promise of support from Nitish Kumar, in lieu of Special Status
would make sure that the government completes its full term. DMK withdrawal is
inconsequential in that sense. Anyways, even if the government falls tomorrow,
it might take 6months to complete the elections and form a new government.
Developments in 2G scam trial took an interesting turn with
summoning of CEOs of some telecom companies in NDA period spectrum allocation
case. The political ramifications of this will be known in next few weeks.
Insofar as the economic situation is concerned, we can expect it
to worsen only, as the priorities of the government would be different in next
12months.
On a side note, RBI did what was most expected and said what is
widely known. We regard this as another opportunity missed and see little
impact on market or corporate bottom lines in near term.
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