JHARKAND'S GOVERNMENT BEGINS TO CRUMBLE, WITH LITTLE HOPE

UNCLAS SECTION 01 OF 02 CALCUTTA 000401

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV IN PINR
SUBJECT: JHARKAND'S GOVERNMENT BEGINS TO CRUMBLE, WITH LITTLE HOPE
FOR A STABLE OUTCOME

REF: A)NEW DELHI 1519, B)NEW DELHI 1304, C)CALCUTTA 072, D)CALCUTTA 107


1. (U) SUMMARY: The fate of the Jharkhand state government,
led by Bharatiya Janata Party's (BJP) Arjun Munda, has become
uncertain with the resignation of four ministers. However, the
shape of an alternative formation is still unclear, with major
national parties like the Indian National Congress (Congress)
and the BJP taking a cautious approach because of national
ramifications. Jharkhand is going to witness intense political
maneuvering in the short term, even as governance and
development come to a halt. END SUMMARY.


2. (U) On September 5, four ministers of the Jharkhand
government -- Madhu Koda (Parlimentary Affairs),Enos Ekka
(Rural Development),Harinarayan Rai (Forestry) and Kamlesh
Singh (Water Resources) - resigned, citing Chief Minister Arjun
Munda's condescending attitude and lack of confidence in them.
With the four ministers quitting, Munda now has the support of
39 legislators -- two short of a majority -- in the 81-member
House. He met with Jharkand Governor Syed Sibte Razi on
September 6 to say that despite the rift in the ranks, he is
confident of proving his majority. Media reports indicate that
the Governor asked Munda to prove his majority on or before
September 14, giving the CM seven days to drum up support.


3. (U) The Jharkand government had been run by the National
Democratic Alliance (NDA),a BJP-led coalition. While the NDA
is eager to save its remaining state governments, the United
Progressive Alliance (UPA),led by the Congress Party, is
divided as to whether it wants to precipitate political change
in Jharkhand. The Congress does not want to replicate the fiasco
of March 2005, when the UPA-backed JMM candidate was defeated in
a no-confidence motion ordered by the Supreme Court (Note: The
Court had to intervene following a complaint by the NDA that the
Governor had acted in a partisan manner to appoint JMM's Shibu
Soren as Chief Minister even when he did not have the necessary
majority. The Supreme Court's directive and Munda's subsequent
victory at the no-confidence motion resulted in a political
advantage for the NDA. End Note).


4. (U) The Congress party is also chastened by the reversal
they suffered in Bihar caused in part by high-handedness of the
Congress-friendly Governor there, and sources in Delhi indicate
the Congress has decided that the Governor in Jharkhand should
appear above the fray as the Munda government flails about for
the next week to salvage its position. In the meantime,
Congress has supposedly very quietly asked Bihari strongman and
Union Railways Minister Lalu Prasad Yadav to start working below
radar to nudge Munda's government over the edge. Congress took
this decision because it does not want to spark immediate
BJP/NDA reprisals in states where the Congress might also be
similarly vulnerable.


5. (U) Sources told post that a week's time was long enough
for Munda and the NDA leadership to work out a strategy for
remaining in power in Jharkand. Munda appears to have a few
options: he can try to convince the rebel ministers to return to
his fold. He can reach out to smaller parties in the Assembly
and seek their support if the rebels do not fall in line. He
can also possibly engineer a split in the Opposition groups,
many of whom would be eager to be in the government. For the
UPA, the seven-day window will be a chance to decide whether it
wants to stitch together a coalition that can replace
Jharkhand's NDA government. While the Rashtriya Janata Dal
(RJD),the Jharkhand Mukti Morcha (JMM) and the Left - all UPA
allies -- are eager to oust the NDA from Jharkhand, the Congress
has decided to take a "cautious" approach.


6. (SBU) Comment. As the numbers stack up now, any government
in Jharkhand will be unstable. The Congress will not like to
give the impression of a "power-hungry" party, and will, at the
most, back a UPA candidate for chief minister and support the
government from outside. The names of one of the defectors,
Madhu Koda, and former CM Shibu Soren (of JMM) have already been
mentioned as possible UPA-backed candidates for the chief
minister's slot. Federal Railways Minister and RJD leader Lalu
Prasad Yadav is not averse to backing Soren, but will not like
to take any overt action. Meanwhile, the NDA, trying to save
the Jharkhand government, is busy drumming up support for Munda.
In the middle of this fast-changing scenario, the idea of
calling for fresh elections by annulling the legislature is also
making the rounds. The demand for fresh elections will find
backers across Jharkhand's political spectrum if Munda fails to
establish a convincing majority on September 14.


7. (SBU) Comment Continued: Political vulnerability was built

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into Jharkhand's NDA government from the very beginning due to
the fragility of the NDA coalition. Switching of allegiance by
a few legislators is enough to bring down any government. The
UPA coalition in Jharkand is no better, (it is more fractured
than the NDA coalition),and it is equally vulnerable if not
more so. While a section within the Congress will push for fresh
elections, the BJP and its allies - given the adverse national
political scenario - will most likely go all out to save the
present government. Meanwhile, for mineral-rich Jharkhand, lack
of governance will lead to deterioration of law and order and
stalled economic development in a state that has good investment
potential. But until Jharkhand's political establishment cleans
up its act, such investments will remain only in the realm of
possibility. Ultimately, the immediate net effect of all this
local intrigue on politics at the Centre will be minimal, but
does serve as a barometer of the failing health of the NDA
nationwide. End Comment.
JARDINE