Sonia cuts Didi to size with Pranab as UPA's man for Prez

Congress Party president Sonia Gandhi may not trust Pranab Mukherjee, the UPA's Presidental nominee announced on Friday, but with her party facing tough elections due by 2014, he may just be the ace the party desperately needs.

With the next elections widely expected to produce a fragmented Parliament with no clear winner, Mukherjee as President could play a key role in deciding the party takes the helm in the new government.
Mukherjee, 76, as President also holds the only hope for Sonia's son, Rahul, to become the Prime Minister in any new Congress-led coalition.
CNBC-TV18's Shereen Bhan seeks anwers and perspectives from a panel of experts comprising Prabhu Chawla, editorial director, New Indian Express, AK Bhattacharya, editor, Business Standard, Manini Chatterjee, resident editor, Telegraph and Mohandas Pai, chairman, Manipal Global Education Services. Below is an edited transcript of the panel discussion on CNBC-TV18. Also watch the accompanying videos. Q: What seems to have happened over the last 24 hours? I go back to my point that this cannot just be about getting himself a deal as far as the disproportionate asset case is concerned. Why do you believe Mulayam Singh Yadav has ditched Mamta for Sonia Gandhi? Chatterjee: I think the question to ask is, why did he join Mamata? Because it was really uncharacteristic. My own reading is that when he and Mamata decided to join hands they were trying to start a move which fizzled out. Q: In 24 hours? Chatterjee: The reason it fizzled out was because the Congress Party, and Sonia Gandhi in particular, suddenly decided – and the Congress party takes a long time to take decisions.
There was a lot of speculation in circles in Delhi that Sonia was not really backing Pranab. But once it become clear, once Sonia Gandhi felt humiliated and she decided and told the entire party to fall in line. Then it become very clear and Mulayam Singh as an old war horse, realised that Kalam was a non-starter and did not want to back a losing horse. Q: But yet Mulayam Singh supported this government when it came to the India-US nuclear deal. We know that Mulayam is not in favour of retail, but perhaps he will allow them to move on some of the other crucial reforms if possible. Chatterjee: I will take the middle road. I think there is definitely going to be a difference in sentiment. One, is because of the way the Congress has managed getting whole lot of people. The fact that if Pranab Mukherjee gets elected will be good on sentiment as it adds to the illusion that that suddenly everything is going to change.
But the Congress' biggest problem in the second term was they had no coordination mechanism within the UPA and after this experience, unlike UPA I when the Left was a participant. Today they had that coordination committee meeting.  Q: Mulayam Singh Yadav ditching Mamata Banerjee at the last minute, this is what we were reporting all of yesterday, suggesting that this was going to be something that would happen. It can't just be the disproportionate assets case that's got Mulayam Singh to side with the UPA over Pranab Mukherjee, what do you believe is the deal here? Chawla: They have a very good equation with each other. Pranab Mukherjee and Mulayam Singh are very well known to each other because earlier they had been part of the same corporate ideological lobbies. Q: But that didn't prevent him 24 hours ago to publicly come out and say that he supports Mamata Banerjee’s candidates which did not include Pranab Mukherjee? Chawala: I was also pretty sure that he would go for Kalam because Kalam was his first choice even during the NDA regime. He went back on it.
_PAGEBREAK_ Q: What has been the volte face here, what has prompted Mulayam Singh Yadav to change his mind about this? Chawla: Let me be a little charitable with him at the moment. Politicians have no conviction these days, they go by convenience and this is a classic case of convenience taking over conviction.
Maulayam Singh must have thought it may be a risk for him. He might have decided Pranab Mukherjee will be a constitutional president, he will not be a dummy president. In case he withdraws the support from the UPA day after tomorrow, after president is elected, what happens? Pranab Mukherjee probably may direct Manmohan Singh to seek a vote of confidence and go for a mid term poll.
That is a better situation for Mulayam Singh Yadav than now because he is expected to pull the government down. And if that is the strategy, it's a very good one. If Pranab Mukherjee was not the first choice of Sonia Gandhi, he becomes the first choice of people who doesn't like Sonia Gandhi. Are we making too much of the fact that the Prime Minister is now going to handle the finance ministry? Chawla: The general human tendency is to find fault with the minister who is going out. If Mamata was not there, Mulayam Singh also would not support the kind of laws because ideologically both Mulayam and Mamata belong to rural India. Q: It seems now by the manner in which Pranab Mukherjee has spoken that the Prime Minister as he himself said, is most capable to handle the economy at this point in time. It seems pretty certain that the Prime Minister is going to take over the Finance Ministry. Honestly, is Pranab Mukherjee going to be missed in the Finance Ministry? Bhattacharya: Frankly speaking Pranab Mukherjee will not be missed because I think he was a less than average Finance Minister in the last three years that he has handled economic issues. He was almost like a rip van winkle who came back 25 years after he was the Finance Minister of this country when he quit in 1985 and realized that things have happened at a rapid pace and the economic policy making has changed, the entire ballgame has changed.
He looked a little bit of a misfit.  He was actually taking the economy backwards and his mindset was that of what prevailed in the 70s and the 80s. I don’t think he distinguished himself as a Finance Minister who had such a wonderful legacy. Q: I want to ask you a specific question with regards to the retrospective amendments because if there was one thing that Pranab Mukherjee was slammed for, it was the introduction of the retrospective amendment in this budget. Do you believe this government will now go slow on cases like Vodafone, on the retrospective amendment? Bhattacharya: My sense is, this is an opportunity for the government to make some amends. I personally believe that retrospective amendments as long as they are procedural are perhaps acceptable.
But if the retrospective amendments are of a substantive nature, they should not be introduced, particularly in the case of Vodafone where situations have been made clear by the Supreme Court. Yet, the government showed certain element of vindictiveness in going ahead with that. I think the government will have a review of the case. Q: If the Prime Minister is going to retain the finance ministry or the finance portfolio, will his troubleshooters Pulok Chatterjee and C Rangarajan run the finance ministry? Bhattacharya: The most important name you have missed out is Montek Singh Ahluwalia. He will form part of a troika along with Rangarajan and Chatterjee which will run the finance ministry. Of course, there will be some secretarial changes to take the reform agenda forward and resolve the issues that afflict the economy. Q: Will this government risk taking the controversial reform path? Bhattacharya: Well that's the big question. Allow me to me use cricketing terminology. When the pitch is bad and you have a huge target, then you must send your best batsman out. In my view, the Prime Minister has to take that call and bite the bullet. The Prime Minister has to lead from the front. Otherwise I don’t see anything moving forward. Q: Will foreign investors celebrate Pranab Mukherjee's elevation to Rashtrapati Bhavan? Will investor's confidence improve as we know that the Prime minister was never in favour of moving on retrospective amendment? Pai: Foreign Investors will be in a better mood than earlier, but they will remain cautious. I am not sure whether investors will return and restore confidence in India. Investors will wait for government's next move as their confidence has been destroyed by retrospective amendment. Indian entrepreneurs' confidence too has been shaky with retrospective amendment. Investors will wait to see what the new finance minister does, if they say that they we will put retro amendment on hold or think prospective then that will be a positive move and the rupee will appreciate. Q: This is the crucial year, this could be the make or break year as far as the economy is concerned. We don't need anymore warnings from the like of S&P, we know what our problems are and a lot of our problems are self inflicted. It has very little window before we actually get into election mode and we see a bunch of populist measures being rolled out, the window is very limited, even if the Prime Minister wants to turn things around? Pai: I think the window is just about one quarter. We have already seen the monsoons falter. The monsoon may not be very good and we have only one quarter because whatever the decisions are taken during this quarter the impact has to be felt before the end of the year or this year is gone. The spending is out of control, revenues are not coming in, the trade deficit is going up, and the rupee is getting hammered and unless any action is taken in the next 90 days things will not work out. If this year is a washout, next year too is not going to be a year. Q: We were talking about changes in the finance ministry, there has also been a lot of talk about a larger cabinet reshuffle that is likely now that Pranab Mukherjee is perhaps headed to Rashtrapati Bhavan. What are you picking up? Siddharth Zarabi (CNBC-TV18): The economic affairs secretary R Gopalan, who is the crucial lynchpin, as far as economic decisions are concerned, is already on an extension. Therefore, one of the first things happening would be a new economic affairs secretary coming in place. Given the current hierarchy within the finance ministry, it would be interesting to see if someone else comes out, people like what AK Bhattacharya was talking about.
The second point as far as reshuffle is concerned is the fact that right now there is no appetite within the Congress party to go in for a reshuffle. That is not what their intention is. The intention is to get the presidential election sorted out and the prime minister retaining the ministry, like he did in 2008. What we have been pointing out so many times will perhaps be the best thing for this government and that is what Pranab Mukherjee has almost said finally here.