Identifier
Created
Classification
Origin
10NEWDELHI352
2010-02-25 01:04:00
CONFIDENTIAL
Embassy New Delhi
Cable title:  

STORMY, AS USUAL: BUDGET SESSION IN PARLIAMENT

Tags:  PGOV PREL PTER KWMN IN 
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C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 000352 

SIPDIS

DEPARTMENT FOR SCA/INS, DRL, DS/IP/SCA

E.O. 12958: DECL: 02/22/2020
TAGS: PGOV PREL PTER KWMN IN
SUBJECT: STORMY, AS USUAL: BUDGET SESSION IN PARLIAMENT

REF: A. 2010 NEWDELHI 321

B. 2010 NEW DELHI 262

C. 2010 NEW DELHI 189

D. 2009 NEW DELHI 2545

E. 2009 NEW DELHI 1295

F. 2009 NEW DELHI 1319

G. 2009 NEW DELHI 1163

Classified By: Political Counselor Uzra Zeya for Reasons 1.4 (B, D)

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 000352

SIPDIS

DEPARTMENT FOR SCA/INS, DRL, DS/IP/SCA

E.O. 12958: DECL: 02/22/2020
TAGS: PGOV PREL PTER KWMN IN
SUBJECT: STORMY, AS USUAL: BUDGET SESSION IN PARLIAMENT

REF: A. 2010 NEWDELHI 321

B. 2010 NEW DELHI 262

C. 2010 NEW DELHI 189

D. 2009 NEW DELHI 2545

E. 2009 NEW DELHI 1295

F. 2009 NEW DELHI 1319

G. 2009 NEW DELHI 1163

Classified By: Political Counselor Uzra Zeya for Reasons 1.4 (B, D)


1. (U) SUMMARY: The budget session of the Indian Parliament
began on Monday with a speech by President Patil before
Parliament laying out out a broad GoI agenda for this year.
The GoI would like this session to focus budget priorities
such as food security, education, inclusive growth and
women,s rights. The Bharatiya Janata Party (BJP)-led
opposition, however, wants to steer the spotlight on the
GOI's decision to resume talks with Pakistan and its
inability to curb the rocketing price of food staples. The
opposition has already forced two adjournments over the
inflation issue. The GoI will present the fiscal year 2011
budget to Parliament this week. The Lok Sabha's official
agenda focuses on 92 new and old bills, including the Civil
Liability for Nuclear Damage Bill (civil nuclear liability
legislation). Inclusion of a bill on the official agenda does
not guarantee that it will be introduced or passed during
this session of Parliament. END SUMMARY

Let's Begin! Let's Adjourn!
--------------


2. (U) The Indian Parliament kicked off its budget session
on February 22. This session adjourns for recess on March
16th and will resume again on April 12, until it closes on
May 7. The session began with President Patil addressing a
joint session of Parliament on the government's agenda,
followed by an adjournment due to spirited protests from the
opposition. Railway Minister Mamata Banerjee will present
the Railway budget on February 24. Finance Minister Pranab
Mukherjee will present the GOI fiscal year 2011 budget to
Parliament on February 26. Following their presentations,
the session will focus on debating the President's speech and
policy agenda with votes on additional bills, if time
permits. The government must pass one part of the finance
bill by March 31st in order to ensure ongoing government

funds for the new fiscal year. Once the recess begins on
March 16th, the remaining budget and spending bills will go
to Parliamentary standing committees for consultation.
Debates on the budget will resume on April 12. The Indian
constitution mandates that the entire budget must be passed
before the conclusion of this session. As of the second day
of legislative business, the Lok Sabha (Lower house of
Parliament) and Rajya Sabha (Upper house of Parliament) have
already seen two adjournments on the issue of rampant
inflation in food staples (Ref B).

Not Just Budgets
--------------


3. (U) President Patil's speech laid out the UPA
government's recent achievements and legislative targets,
which focused on food security, internal security, economic
growth, infrastructure development, governance, and higher
education, with a strong push for passage of the Women's
Reservation Bill (Ref F) during this session. The Lok
Sabha's official agenda focuses on 65 new bills, including
the Civil Liability for Nuclear Damage Bill (civ-nuclear
liability legislation).

Civil Nuclear Liabilities Legislation
--------------


4. (C) The previous session of the Lok Sabha adjourned on
December 18 without taking up civil nuclear liability

NEW DELHI 00000352 002 OF 003


legislation, despite assurances from senior officials that
the government would do so. The Embassy saw no signs of the
UPA government making the case for the liability legislation
within their own party or with the opposition. Senior
officials, including National Security Advisor Menon, have
underscored that passing the legislation in the current
budget session of Parliament is a top priority, and the law
is included as second on the list of 65 new bills under
consideration.


5. (SBU) Unlike the previous session, Embassy contacts and
media report that the UPA government has reached out this
session to the leading opposition Bharatiya Janata Party
(BJP) to seek support for civil nuclear liability
legislation. While the UPA government has enough votes in
the lower house, it only holds 91 seats in the upper house.
Since UPA needs 123 votes for a simple majority in the upper
house, it must build consensus and reach across the aisle for
support on this measure. Post will continue to monitor the
legislation,s prospects and progress.


Adjournments over Food Inflation
--------------

6. (U) The rise in price of food staples continues to cause
trouble for the UPA administration. Referring back to the
UPA administration,s pro-poor campaign promises, the BJP and
other opposition parties held the central government
responsible for increasing the misery of the &aam aadmi"
(common man) by allowing high food prices to rise (Ref C).

Alliance Politics
--------------


7. (U) Prior to the budget session of Parliament, the UPA
coalition,s dominant Congress party tried to pin the blame
for price increases on its UPA-ally Nationalist Congress
Party (NCP) chief and Agriculture Minister Sharad Pawar.
There have also been heavily publicized reports of an
emotional spat between coalition partner Trinamool Congress
leader and Railway Minister Mamata Banerjee, and Finance
Minister Mukherjee over financing of new projects in West
Bengal. West Bengal goes to assembly polls in spring 2011,
pitting former Congress ally, the Left Front, against its
current ally, the Trinamool Congress.

Indo-Pak Talks, Internal Security To Feature In This Session
--------------


8. (U) Given the February 13 bomb blasts in Pune, the
opposition has challenged PM Singh,s decision to pursue
talks with Pakistan at the Foreign Secretary level. The
newly remodeled BJP is also likely to needle the government
on its efforts to curb Naxal violence, although this may turn
out to be a winning issue for the UPA with the GOI showing
new resolve in confronting the insurgency.

The BJP: Implosion Be Gone!
--------------


9. (U) The BJP appears to be in fighting shape this
parliament session. Newly elected BJP president, Nitin
Gadkari, has spearheaded party leadership reorganization and
made overtures to Dalits and Muslims during its recent
national meeting in Indore (SepTel). The BJP's votes and
support in the Rajya Sabha are critical on several key pieces
of legislation, including the UPA's hallmark Women's
Reservation Bill.

Women's Reservation Bill ) Back on the Agenda?
--------------


10. (U) President Patil,s speech stressed the GOI's desire
to revisit the Women's Reservation Bill, which is currently

NEW DELHI 00000352 003 OF 003


being debated in committee. This legislation was first
introduced in 1996, but regional parties scuttled it several
times, fearing it would hurt smaller parties and benefit only
elite, urban women. The proposed bill would set aside
one-third of the elected seats in the Lok Sabha and in state
legislatures for women. If the bill passes, India would be
the only country in the world to reserve such a large
percentage of seats in its legislature for women. The bill
requires a constitutional amendment and a two-third majority
in both houses to become law. This means the UPA government
would need 364 votes in the Lok Sabha. Although the bill
enjoys broad support from the major national parties,
including the Congress Party, the BJP, and the Left, it has
met strong opposition from the leaders of regional,
caste-based parties in northern states such as Uttar Pradesh
and Bihar. These regional parties want the bill to include
"a quota within a quota" for Other Backward Caste (OBC) and
Muslim women. The UPA government had announced it will hold
consultations with all political parties to address their
concerns. President Patil exhorted all the political parties
to focus on this bill in her kick-off speech in Parliament.

Budget Session: Subsidies Still Rule
--------------


11. (U) Finance Minister Pranab Mukherjee will present the
GOI fiscal year 2011 (twelve month period ending March 31,
2011) budget to Parliament on February 26. Minister
Mukherjee's budget will attempt to return India to nine
percent annual GDP growth (a target which the Finance
Minister says is within India's reach "in the coming years.")
This budget is likely to focus on GDP growth and be less
concerned with undertaking direct steps to reduce the fiscal
deficit. Although there are media reports of plans to reform
fertilizer subsidies, few expect the GoI to take unpopular
steps to significantly curb fuel or food subsidies; unwind
fiscal stimulus programs; or raise taxes.


COMMENT: The BJP - Ready to Swing
--------------


12. (SBU) With the BJP taking steps to put its house in
order, this parliamentary session is off with a bang. The
sharp opposition attacks on the government drew heavy media
attention. The political impact, however, may be limited
because the concerns over food prices may merely be an urban
issue. The rural voter may in fact be thriving as food
prices increase and result in higher incomes and more money
circulating in rural areas. The Pune blast has given the BJP
traction in its plan to hammer the GoI in Parliament on
resuming Indo-Pak talks. The GoI should be able to deflect
these attacks. However, if there is a Sharm El-Sheikh-like
misstep or another terrorist attack, the GoI will feel real
heat in Parliament. END COMMENT
ROEMER