PARLIAMENT SESSION LIKELY TO BE STORMY

UNCLAS SECTION 01 OF 02 NEW DELHI 002745

SENSITIVE
SIPDIS

DEPARTMENT FOR SCA/INS, DRL

E.O. 12958: N/A
TAGS: PGOV PTER PREL KNPP ECON IN
SUBJECT: PARLIAMENT SESSION LIKELY TO BE STORMY

REF: A. NEW DELHI 2714

B. NEW DELHI 2556


1. (SBU) Summary: Both houses of the Indian Parliament
convened a session on October 17 to open up a new session of
Parliament, possibly its last before national elections due
before May 2009. The United Progressive Alliance (UPA) is
preparing itself for heated attacks from the Left Parties,
who moved a privilege motion against Prime Minister Manmohan
Singh for failing to consult Parliament before signing the
123 Civil Nuclear agreement on October 10. The Bharatiya
Janata Party (BJP)-led National Democratic Alliance (NDA)
attacks will likely focus on matters of national security and
the UPA's "soft" approach to the impeding terrorist threat.
Claims of economic instability - including unemployment,
inflation, and the government's response to the global
financial crisis - will also be prominently featured during
the parliament session. While the session is scheduled to
run through November 21, some anticipate a "short and stormy"
parliament session as political parties look to prepare for
hotly contested state assembly elections starting November 14
(Ref A) and national elections next year. A shortened
session and heated attacks from opposition parties will limit
the UPA's ability to push through its legislative agenda,
particularly the Minister of Finance's wish list of financial
sector reform in pension, insurance and banking. End Summary.

Left Parties Criticize Nuclear Deal
---


2. (U) On October 17, the opposition Left Parties moved a
privilege motion against Prime Minister Manmohan Singh for
failing to take the Parliament into confidence before signing
the 123 Agreement on U.S.-India Civil Nuclear cooperation.
Speaking to reporters outside the Parliament building,
Communist Party of India Marxist (CPI-M) Rajya Sabha MP
Sitaram Yechury said that PM Singh had given assurances to
consult Parliament before signing the 123 Agreement, but he
went ahead and signed on October 10 without consulting
Parliament. "He (PM Singh) had said that he would abide by
what parliament states before operationalizing the deal. He
specifically told Left Parties, 'Let us go to the IAEA and
the NSG, and then we will come back and discuss it with you."
(Note: If approved by the Speaker of the Lok Sabha and/or
the Chairman of the Rajya Sabha, a privilege motion committee
will be convened to decide the brief of privilege case. The
entire process averages six months to a year. End Note.)
Congress Party officials do not expect the motion to be taken
up by either House. In their opinion, the July 22 trust vote
should be considered the "sense of the House" consultation on
the U.S.-India Civil Nuclear Initiative.


3. (U) The Left Parties had withdrawn support from the
United Progressive Alliance (UPA) government, prompting the
July 22 confidence motion. After winning the motion, the
Congress-led UPA government secured International Atomic
Energy Agency (IAEA) and National Supplier's Group (NSG)
approvals before clinching U.S. Congress support on September
26 and signing the 123 Agreement with the United States on
October 10.

UPA is Soft on Terror, Says BJP
---


4. (U) For the main opposition Bharatiya Janata Party
(BJP),the priority issues are terrorism and internal
security. BJP has repeatedly criticized the UPA for failing
to address the scale of the security threat throughout the
country. BJP spokesperson Prakash Jawadkar has alleged that
the UPA does not have the "political will" to combat
terrorism, referring to the emerging domestic terrorist cell
the Indian Mujahideen. Senior BJP officials have further
accused the UPA of taking a "soft approach" to combat
terrorism in order to appeal to the critical Muslim vote
bank. To confront the terrorist threat, BJP has openly

NEW DELHI 00002745 002 OF 002


called for Home Minister Patil's resignation and demanded
tougher anti-terror laws (Ref. B).

Economy in "Shambles"
---


5. (U) Amid a global financial crisis and liquidity
shortage in the domestic market, economic issues will feature
prominently in parliamentary debate. BJP's Jawadkar told
reporters on October 16 that inflation, which stands at 11.4
percent, and the economic crisis would be a "top priority"
for the opposition. (Note: Most analysts believe that
inflation has peaked and will continue to fall. End Note.)
"We want to know what the government is doing besides
tinkering with repo and cash reserve ratio rates," Jawadkar
added. He warned that the announcement of nearly 1900 jobs
losses at Jet Airways on October 16 could be just the
beginning of similar layoffs in other sectors and called for
immediate UPA action or risk further economic decline.
(Note: The jobs were reinstated in a tearful press
conference by the Jet Airways Chairman, who said his
conscience could not allow it. End Note.)


6. (U) In the run-up to the opening Parliament session, UPA
officials had conceded that inflation poses a serious risk.
The challenge for the government, they said, is to control
inflation while ensuring that India's high economic growth is
not compromised. The UPA had ascribed spiraling food and
commodity prices earlier this year as an "imported problem"
and will likely point to government initiatives, and the
plummeting food and energy commodity prices, that will help
to ease pressures on the average citizen.

No Substantive Agenda This Session
---


7. (SBU) The intensity of attacks from opposition parties
and the general hostile environment in Parliament will limit
the UPA's ability to move forward with any measure of a
substantive legislative agenda. The UPA had hoped to push
through financial sector reforms in pension, insurance and
banking. However, the rising tension in Parliament
surrounding the Civil Nuclear Initiative and prevailing
security and economic issues has disrupted daily business as
usual. Some expect the session to be "short and stormy," and
they anticipate the session to adjourn well before its slated
end date of November 21. A telling sign is that both houses
adjourned before noon during the opening Parliament session
on October 17 amid raucous debate from opposition parties.

Comment: Preview of State and National Elections
---


8. (SBU) The current session of Parliament will likely be
the last before national election, which are due before May

2009. It can, therefore, be seen as a campaign preview,
touching on every major issue that is likely to shape the
coming elections. The opposition parties' challenges hint of
what the BJP and Left Parties' election strategies will be
going into the elections: to highlight UPA weaknesses on
critical issues, particularly economic uncertainty and
resurging terrorism in the aftermath of serial bombings in
Indian regional centers. The UPA will seek to generate a
positive sense of wellbeing by pointing to the historic run
of economic growth and projecting a bright future for India
following the successful passage of the U.S.-India Civil
Nuclear Initiative. End Comment.
WHITE