JHARKHAND'S PARLIAMENTARY SEATS ARE UP FOR GRABS

UNCLAS SECTION 01 OF 02 KOLKATA 000295 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV SOCI IN SUBJECT: JHARKHAND'S PARLIAMENTARY SEATS ARE UP FOR GRABS REF: KOLKATA 229 KOLKATA 00000295 001.2 OF 002 ¶1. (SBU) Summary: On October 14-16, CG and New Delhi PolCouns visited the mineral-rich state of Jharkhand, India's newest state. With six governments in the last eight years, newly installed Chief Minister (CM) Shibu Soren of Jharkhand Mukti Morcha (JMM) leads a fragile United Progressive Alliance (UPA) coalition government supported by the Indian National Congress (INC),Rashtriya Janata Dal (RJD) and independent legislators (MLAs). Jharkhand is rich in resources but is plagued by political instability and the lack of leadership. Promised private sector industrial projects are dormant. Jharkhand will soon hold the state's first Panchayat (rural local governance) elections. JMM will most likely lose seats in the upcoming Parliamentary elections, giving the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) an opportunity to pick up seats this time around. End summary. A Rich State in Decline ¶2. (SBU) Despite having 40 per cent of India's mineral wealth, India's newest state of Jharkhand has been unable to translate this wealth into economic growth. Political and business contacts told CG and PolCouns during a recent visit to the state that infrastructure and the overall state of the economy has been declining since the state's inception in 2000. They blame endemic corruption and poor leadership for this decline. In past eight years, the state has had six state governments with four Chief Ministers. Contacts explained that the instability in government has encouraged politicians to siphon off as much money as they can from government coffers because they will soon be voted out of office. While the state government has signed over 65 MOUs with private companies in the last three years, primarily in the mining and steel industries, none of these are moving forward due to the political instability. Panchayat Elections ¶3. (SBU) Even though Article 243 of the Indian Constitution requires states to regularly hold Panchayat elections, they have never been held in Jharkhand. In 2005, the Jharkhand High Court directed the state government to hold Panchayat elections and the state Election Commission issued an election notification. These elections were cancelled when the same High Court struck down key provisions of Jharkhand's Panchayat Raj Act regarding reservations for scheduled castes and tribes. A local NGO filed a Public Interest Litigation case in the Indian Supreme Court challenging the High Court's decision. A senior Jharkhand government official told CG and Poloff that he expects that in the next three to four months the Supreme Court will order the state to hold Panchayat elections. He could not predict whether they would be held before or after Parliamentary elections, but predicted it would be around the same time period. Parliamentary Election ¶4. (SBU) Jharkhand's political leaders appear to be more focused on the upcoming Parliamentary elections than the Panchayat elections. During CG and PolCouns's visit, BJP leader L.K. Advani held his second public meeting in Jharkhand this month, which according to security contacts drew 30,000 supporters. While BJP currently has no Parliamentary seats, BJP opposition leader and former Chief Minister Arjun Munda told CG and PolCouns that BJP will win nine out of Jharkhand's 14 Parliamentary seats. He cited inflation and Jharkhand's history of anti-incumbency as factors favoring a BJP win. ¶5. (SBU) The INC currently has six Parliamentary seats and JMM has four seats. While JMM was a key regional party that helped UPA win the July 22 no confidence vote, INC has so far given Soren only the CM position as a reward. A knowledgeable INC state leader told CG and PolCouns that the INC is pressuring Soren to show immediate success as Chief Minister in order to maintain INC support for JMM. He said that the UPA government at the Center will not give CM Soren anything more (e.g. Cabinet Ministries) until he proves in the elections that he can win seats for JMM and cooperates with UPA. ¶6. (SBU) Soren appears to be hedging his bets between BJP and INC, telling CG and PolCouns that in a democratic country such as India political alignments can change. Contacts speculate that Soren's political future is dependent on the results of Parliamentary elections. Soren was named Chief Minister only with support from INC, which appears to have convinced the independent parties in the state assembly to back Soren for now. If the INC withdraws its support for Soren, the independents may call for a no confidence vote, causing the government to fall. If this happens, the State Assembly election, scheduled for March 2010, may be held soon after the Parliamentary KOLKATA 00000295 002.2 OF 002 elections. It is unlikely that the INC will withdraw its support for Soren before Parliamentary elections unless he clearly sides with BJP. Jharkhand's Forgotten Muslims ¶7. (SBU) According to the 2001 census, Muslims comprise 13.8 percent of Jharkhand's population of 26 million. Muslim community leaders estimated the percentage to be much higher at 30 percent. (Note: While 13.8 percent most likely underestimates the number of Muslims in Jharkhand, 30 percent appears to be an exaggeration. End note). CG and PolCouns met with approximately 30 members of the Muslim community, including NGO staff, religious leaders and students. The group was angry and suspicious, complaining that the government of Jharkhand had provided no support for education and health care. They claimed that they were unable to translate their numbers into political influence because constituencies with large numbers of Muslims were set aside for scheduled castes and tribes. While Muslims have traditionally voted against the BJP-led National Democratic Alliance (NDA),the ones we spoke to did not appear to strongly support any party. Comment ¶8. (SBU) While the BJP-led NDA does not currently have any of Jharkhand's Parliamentary seats, the state's history of anti-incumbency and the lack of current leadership in the state makes it likely that BJP and their allies will win a number of seats this time around. If JMM loses seats, neither UPA nor NDA will need Soren's support and his government will probably fall, with state assembly elections probably being moved forward. It is unclear when the Panchayat elections will be held, but if they take place before Parliamentary elections, they will be a good indicator of what to expect on the national level. End comment. PAYNE