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