Public spending up in India to woo voters
Monday, 14 July 2008
Fazle Rashid from New York
THE exit of the Communist Party from the coalition government in India could turn out to be a boon for Manmohon Singh, a fierce protagonist of free economy. The government is set to seek a confidence vote on July 21.
The government claims that there is no immediate danger of losing the battle on the floor of the Lok Shava, the lower house of Indian Parliament.
The Congress, which is the major partner in the coalition has sought and gained the support of a South Indian party, Samajwadi Dal, to keep it afloat. But how long this honeymoon will linger is anybody's guess. The Bharatiya Janata Party (BJP) will do its utmost to force an early election.
Manmohon Singh, who is credited with patronising the market economy and helping boost India's development, will go the whole hog to withdraw equity from the public sector enterprises, with Communists not there to block his drive. The Indo-US nuclear deal prompted Communist parties to withdraw support. Disinvestments could run into several billion dollars. This would provide the cash-strapped country with the needed revenue. India is facing a budget deficit. The fiscal gap is widening. The government spending aimed at attracting the voters has increased and it is providing subsidies to cover the spike in the price of oil. The government in New Delhi is planning to sell stakes in the national carrier -- the Air India.
The government had earlier tried to withdraw its equities from the state-owned enterprises but was prevented by the Communists and the workers alike who fear disinvestment could lead to retrenchments.
The elections in India are due in coming May but the possibility of a snap election has not been ruled out. The government will not rush and move cautiously lest its actions annoy the voters. Manmohon Singh is confident of surviving the confidence vote. If the government goes ahead with its plan of withdrawing equity it could fatten the public coffer by $1.53 billion. Air India has become a thorn in the throat of the government. The airline is said to be losing as much as Indian Rupee 1.4 million a day. The airline is clamouring for government assistance.
THE exit of the Communist Party from the coalition government in India could turn out to be a boon for Manmohon Singh, a fierce protagonist of free economy. The government is set to seek a confidence vote on July 21.
The government claims that there is no immediate danger of losing the battle on the floor of the Lok Shava, the lower house of Indian Parliament.
The Congress, which is the major partner in the coalition has sought and gained the support of a South Indian party, Samajwadi Dal, to keep it afloat. But how long this honeymoon will linger is anybody's guess. The Bharatiya Janata Party (BJP) will do its utmost to force an early election.
Manmohon Singh, who is credited with patronising the market economy and helping boost India's development, will go the whole hog to withdraw equity from the public sector enterprises, with Communists not there to block his drive. The Indo-US nuclear deal prompted Communist parties to withdraw support. Disinvestments could run into several billion dollars. This would provide the cash-strapped country with the needed revenue. India is facing a budget deficit. The fiscal gap is widening. The government spending aimed at attracting the voters has increased and it is providing subsidies to cover the spike in the price of oil. The government in New Delhi is planning to sell stakes in the national carrier -- the Air India.
The government had earlier tried to withdraw its equities from the state-owned enterprises but was prevented by the Communists and the workers alike who fear disinvestment could lead to retrenchments.
The elections in India are due in coming May but the possibility of a snap election has not been ruled out. The government will not rush and move cautiously lest its actions annoy the voters. Manmohon Singh is confident of surviving the confidence vote. If the government goes ahead with its plan of withdrawing equity it could fatten the public coffer by $1.53 billion. Air India has become a thorn in the throat of the government. The airline is said to be losing as much as Indian Rupee 1.4 million a day. The airline is clamouring for government assistance.