INDIA: Bihar polls to test government's stability

Analysis

When the Congress Party-led UPA coalition came to power last year, doubts that it could serve out its term precipitated a crash in the local stock market. The market only recovered on Manmohan Singh's appointment as prime minister (see INDIA: Reform to continue as Singh takes the helm - May 21, 2004). Since then, with Congress holding just 145 of 545 seats in the lower house of parliament, Singh's government has had to rely not only on its coalition with regional parties but also on backbench support from the communist parties, which control 61 seats.

Regional rivalries. In recent weeks, there have been indications that Congress's rivalries with its regional allies at state level are harming its relations with them at the centre:

1. Bihar troubles. Laloo Prasad Yadav, leader of the Rashtriya Janata Dal (RJD) party that has ruled Bihar for the last 15 years, brought 23 seats into the ruling coalition and is thus a crucial government ally. He was appointed railways minister but has proved a controversial figure for the prime minister. Laloo has been charged with embezzling agricultural subsidies from the Bihar state treasury during his tenure as chief minister of the state during the 1990s (see INDIA: Supreme Court advances anti-corruption drive - November 15, 2004). Last month, he was charged for the second time for alleged embezzlement. If found guilty, Laloo would leave the cabinet and his party may withdraw support for the government.

   To complicate matters, state elections in March produced a hung parliament and led Delhi to impose direct rule (see INDIA: Direct rule imposed in Bihar - March 8, 2005). This step and the government's decision to dissolve the local assembly have been interpreted as moves by the central government to shore up the RJD, which lost its majority in the March poll. Fresh elections will give the RJD an opportunity to regain its majority. However, the centre's interference in local politics proved very unpopular; and the RJD may fail to improve on its previous performance.

2. Mayawati threats. In neighbouring Uttar Pradesh (UP), Mayawati, head of the Bahujan Samaj Party (BSP), has threatened to withdraw from the central government the backbench support she enjoys from her 18 members of parliament. Mayawati's threats follow the Central Bureau of Investigation's recent announcement that it will press ahead with an investigation into her alleged role in a major corruption case (see INDIA: UP change suggests BJP nationalist revival - September 23, 2003).

The loss of BSP support would do less harm to the government's majority than that of the RJD. However, Mayawati, like Laloo, leads a low caste party, and there is a risk that the UPA could be perceived as 'caste-ist' or anti-low caste if it ends up breaking ties with both of them. In this way, Congress risks losing its wider appeal to the lower castes at the next general election.

Communist influence. If Congress loses support from either the RJD or the BSP, it would be increasingly reliant on its communist allies (see INDIA: Left will advocate emphasis-shift, not u-turn - May 27, 2004). Their control of 61 of the 543 seats in parliament has enabled them to blunt some of the pro-reform efforts of Singh and his liberal Finance Minister P Chidambaram. These include the government's privatisation plans and the opening up of certain sectors to foreign direct investment (FDI) (see INDIA: Left frustrates Singh's privatisation drive - March 29, 2005).

More recently, members of the Communist Party of India-Marxist (CPI-M), while expressing their discontent at the government's performance, have suggested forming a 'third front' coalition with smaller regional parties to challenge the government. However, recently elected CPI-M General Secretary Prakash Karat has said that the withdrawal of communist support was unlikely if it were to precipitate the fall of the government. The communists would not risk giving the Hindu nationalist Bhartiya Janata Party (BJP)-led opposition, the National Democrat alliance (NDA), an opportunity to return to power. In this respect, the threat to secularism posed by the BJP is proving to be a strong uniting force for the UPA coalition.

Policy impacts. Nevertheless, Singh has felt compelled to placate his communist allies by pushing forward a major rural development programme, while trying to implement his liberal economic agenda. Last month, the government launched its 'Bharat Nirman' policy -- a rural investment programme that proposes substantial public spending on irrigation, roads, housing, drinking water, electricity and telephone connectivity -- for the next four years. Singh has described this as the most important government initiative this year.

The policy is a major concession to the communists. In return, the government has been allowed to press ahead with its reform agenda. It recently sold a 10% stake in Bharat Heavy Electrical and passed a law that will pave the way for the creation of Chinese-style Special Economic Zones, which are intended to stimulate FDI and export-orientated Indian manufacturing companies. Nevertheless, the communists have already forced the government to back down on plans to offer labour laws concessions to companies operating within these zones.

NDA pressures. The NDA has focused on criticising Singh's inclusion of Laloo in the government, and due to the recent charges brought against him, has boycotted parliament. However, the BJP is riddled with leadership and ideological divisions, especially concerning the extent to which the party should draw upon its Hindu nationalist ideology. It also suffers from similar problems as Congress in holding its coalition together. For example:

• early last month, the Andhra Pradesh-based Telugu Desam Party broke ranks with the NDA;
• leaders of another ally of the BJP, the Jharkhand-based Janata Dal United party, have publicly criticised the party's treatment of minorities in India and may also break away from the NDA; and
• the BJP's recent boycott of parliament appears to have backfired because it has alienated public support, which enabled the government to pass legislation more easily.

Thus, for at least the rest of the year, it is unlikely that the BJP will be able to recover its former popularity and its weakness should ensure that Singh's ruling coalition remains in office, despite the recent threats to its stability.