TURBULENCE IN PARLIAMENT AWAITS PRIME MINISTER ON RETURN

UNCLAS SECTION 01 OF 03 NEW DELHI 002354 C O R R E C T E D COPY - (PARA MARKINGS) SENSITIVE SIPDIS DEPARTMENT FOR SCA/INS, DRL, DS/IP/SCA E.O. 12958: N/A TAGS: PGOV PTER PREL PINR KDEM EAGR IN SUBJECT: TURBULENCE IN PARLIAMENT AWAITS PRIME MINISTER ON RETURN FROM THE UNITED STATES NEW DELHI 00002354 001.2 OF 003 Reftel: 09 New Delhi 2330 ¶1. (U) SUMMARY: The winter session of Parliament kicked off ON a stormy note ON November 19 as the opposition parties brought parliament and the capital to a halt over the issue of sugarcane prices to farmers. The Opposition effectively mobilized over 25,000 farmers from western Uttar Pradesh to rally outside of the Parliament, while opposition leaders united ON the parliament floor. Revealing a surprising lack of confidence, the government quickly folded to the farmers' demands, with the Prime Minister, Rahul Gandhi, and Finance Minister Mukherjee springing to action. Given the reinvigorated Opposition and tight schedule, the government may find it challenging to push through its ambitious agenda of 62 new pieces of legislation, from women's empowerment initiatives to judicial reform. The Cabinet approved the Civil Liability for Nuclear Damage Bill ON November 19, paving the way for its introduction to parliament. In the run up to the UN Climate Change Conference in Copenhagen, the government may also face a fierce challenge to legislation ON climate change, a contentious new issue on the domestic political scene. With the opposition parties determined to confront the government ON a host of issues, Prime Minister Singh may need to rally his United Progressive Alliance (UPA) upon returning from the United States to assure some legislative successes and prevent a political battering by the opposition in the winter session. END SUMMARY. Caned by Sugarcane -------------- ¶2. (U) ON November 19, the Winter Session of Parliament began ON a stormy note as the opposition parties' plan to put the government ON the defensive succeeded. Effectively holding Parliament hostage ON its opening day, the parties forced an adjournment of the Lok Sabha (lower house of parliament) within minutes of its start. The Opposition seized upon a seemingly obscure issue -- the government's proposed legislation to rework the support prices paid to farmers for sugarcane produce. However, the issue proved an effective rallying cry to over a rent-a-mob of 25,000 farmers bused in from western Uttar Pradesh (U.P.) who brought the capital to a standstill with raucous protests in the city center. ¶3. (U) The sugarcane issue provided a convenient way for the Samajwadi Party (SP) and the Bharatiya Janata Party (BJP) to raise their profiles after suffering humiliating defeats in the recent U.P. by-elections (reftel). SP leader Mulayam Singh Yadav barely allowed Speaker Meira Kumar to finish reading the customary obituary references in the opening session before storming the floor yelling "stop the robbery of sugarcane farmers." Yadav was soon joined by BJP leaders Rajnath Singh and Sushma Swaraj, as well as party chiefs from Janata Dal (United) and the left parties. To the government's discomfort, one of its allies, the Dravida Munnetra Kazhagam party of Tamil Nadu, joined the opposition parties in the protest. The Speaker eventually gave up, adjourning the session before it began. ¶4. (U) Clearly rattled by the Opposition's ability to mobilize such a massive protest, the government agreed to make amendments to the pricing legislation to ensure a better price for farmers. Rahul Gandhi met with Prime Minister Singh to discuss the sugarcane issue hours after Parliament adjourned. The PM reportedly told Gandhi "to amend the ordinance suitably if it was against the interest of farmers." In another indication of the protests' impact ON the government, Finance Minister and top political fixer Pranab Mukherjee invited parliamentary leaders for a breakfast meeting ON November 23 to discuss the issue. Ambitious Agenda -------------- ¶5. (U) The winter session's limited 22-day sitting will force the government to hustle in order to push through an ambitious schedule of 62 pieces of legislation. Some legislation highlights include: the eagerly awaited Equal Opportunity Commission Bill; legislation to NEW DELHI 00002354 002.2 OF 003 reform judicial standards and accountability; the Pension Fund Regulatory and Development Authority Bill to officially establish a pension regulator and allow up to 26 percent foreign direct investment (FDI) in pension fund managers; the Foreign Contribution Bill to regulate contributions to non-profit organizations from foreign sources; the Constitutional Amendment Bill to roll out the new Direct Tax Code and the Goods and Services Tax; and the reservation of 50 percent of seats in village and urban councils for women. The women's reservation bill at the local level signals a positive step for women's empowerment, but falls short of President Prathiba Patil's promise to push through more sweeping empowerment initiatives in the UPA's first 100 days. The more contentious legislation to reserve 33 percent of seats in parliament for women is unlikely to be passed in this session. Missing from the schedule list of legislation is the Insurance Bill, which would increase FDI in the insurance sector from 26 percent to 49 percent. Civ Nuke: Liability Legislation to Parliament -------------- - ¶6. (U) We will closely monitor the progress of the Civil Liability for Nuclear Damage Bill, which outlines guidelines and compensation standards to be paid in case of a nuclear accident. This domestic legislation is the key next step toward India's ratification of the Convention ON Supplementary Compensation for Nuclear Damage, a prerequisite for U.S. companies seeking to establish nuclear power plants in India. The cabinet approved the bill November 19, paving the way for its introduction in parliament. The bill is ON the list of legislative items planned for action by Parliament this term, but Parliament is unlikely to consider the bill before PM Singh meets President Obama in Washington ON November 24. NSA Narayanan privately assured the Ambassador November 19 that the Singh government would "push hard" for adoption of the liability legislation during the winter session. Copenhagen Sensitivities -------------- ¶7. (U) Climate change has emerged as a contentious issue ON the domestic political scene, with sensitivities heightened in the lead up to Copenhagen. The government is considering plans to introduce legislation to strengthen certain aspects of its National Action Plan on Climate Change during the session, but may face a fierce challenge from opposition parties accusing the UPA of "selling out" to the U.S. The BJP and the Left have made statements opposing any political concessions before December. The Left advised the government to "firmly resist pressure from the U.S. and other advanced countries to abandon the Kyoto Protocol and UNFCCC framework and stick to the principle of common but differentiated responsibility." The Opposition has also pounced ON perceived differences between the Prime Minister's Special Envoy for Climate Change Shyam Saran and Minister for Environment and Forests Jairam Ramesh. BJP leader Sushma Swaraj accused the government of "speaking in different voices" ON climate change and called for a government-wide discussion of the issue. Opposition Agenda -------------- ¶8. (U) The Opposition plans to derail the government's ambitious agenda for the winter session with scandals and security issues. High ON the opposition's list are scandals that have come to light in the past two months, including the mining scandal allegedly involving former Jharkhand Chief Minister Madhu Khoda and other UPA politicians. The Opposition will demand full disclosure from the government ON who benefitted from kickbacks and payoffs from this scam. The Opposition will also focus ON the alleged payoffs by telecom companies for allocation of 2G spectrum. ON the foreign policy front, the government will face questions regarding the recent U.S.-China joint statement, which included a mention of Indo-Pak relations and China's role in the region. The Opposition may also try to attack the government ON the internal security situation, NEW DELHI 00002354 003.2 OF 003 including the first anniversary of the 26/11 Mumbai attacks, and the increased Naxalite/Maoist violence -- likely with less success -- because the GOI is moving forward as never before ON confronting this insurgency. The rising price of essential commodities is an issue of major concern to not just the opposition parties, but also for some of the allies of the government. The Prime Minister will likely appear in Parliament ON his return from the United States to brief ON the results of his trip and defend his government's policies. Comment: Surprising Lack of Confidence -------------- ¶9. (SBU) The most notable aspect of the sugarcane saga is the speed with which the government folded. Despite the UPA's majority in Parliament; its relative success in recent by-elections; and the perceived weakness of the BJP, its main challenger; the government folded when the SP mobilized a 25,000 strong rent-a-mob (Note: media widely covered the protesting farmers' bouts of drinking, vandalism and public urination in Delhi's ancient observatory located in the heart of the city. End Note.) The speed with which Rahul Gandhi ran to the Prime Minister's office to appease the protestors reveals that the UPA is more brittle in the face of opposition than expected. While it may have appeased the sugarcane farmers, the government must be wary of other groups with axes to grind who may FOLLOW SP's example during the winter session. When the PM returns from the United States, greeted by a parliament in disorder and a reinvigorated Opposition, he may need to use all his political capital to buck up his cadres. The Opposition will surely scrutinize every aspect of the PM's visit, particularly the joint statement, for fodder with which to pummel the PM. END COMMENT.