Congress endorses UPA government's new economic reforms

Congress President Sonia Gandhi, while slamming BJP for playing 'negative' politics, said reforms in the economy are very necessary and the UPA government has started moving in this direction

New Delhi: Congress on Tuesday fully endorsed new economic reform measures of the United Progressive Alliance (UPA) government, including foreign direct investment (FDI) in multi-brand retail, as party president Sonia Gandhi ruled out any threat to the government, reports PTI.


The endorsement came at the first meeting of the Congress Working Committee (CWC) after Trinamool Congress walked out of UPA with the party president saying the government was "stable".


At the same time, there was a demand in the meeting for steps to allay apprehensions of people regarding the new economic reform measures initiated by the government at a time when elections are due in some states in the next few months.


Prime Minister Manmohan Singh assured the party's apex decision-making body that the steps being taken for the poor and the disadvantaged will continue in league with the Congress policies for development and welfare of the 'Aam Admi'.


The meeting of the CWC, which began with opening remarks by Gandhi, saw the government making a strong pitch for reforms with Finance Minister P Chidambaram making it clear that unless the country's economic condition is sound, the government is not in a position to implement the flagship programmes of UPA targeted at the poor.


The Prime Minister said that effective steps for welfare of the poor cannot be taken unless the economy is strong.


Explaining the rationale behind the measures, Chidambaram said the government wants that the country should not get affected due to the global economic crisis.


In her opening remarks, Gandhi said that reforms in the economy are "very necessary" and the government has begun the moves in that direction.


The Congress President also slammed BJP for playing "negative" politics, saying the main opposition party should play the role of a responsible opposition as was done by Congress when it was not in power.


Congress sources said that there a likelihood of the party organising a massive rally in Delhi in support of the measures initiated by the government.


Delhi Chief Minister Sheila Dikshit was specially called for the meeting, which saw members suggesting that rallies should be held at district level to convince the people about the need to bring in the measures like allowing 51% FDI in multi-brand retail, hiking diesel prices and putting a cap on the supply of subsidised LPG cylinders to households.


While no resolution was adopted after the meeting, the tone and tenor of Gandhi's speech made it clear that the party was fully behind the government on the issue.


Chidambaram was called to brief the CWC members about the economic reform measures, which led to a political storm culminating in Trinamool Congress withdrawing support from the ruling alliance.


The CWC meeting came five days after a nation-wide bandh by the opposition in protest against the measures. UPA constituent DMK had also joined the bandh.


Replying to questions, AICC general secretary Janardan Dwivedi said that there was nothing like a dissenting note from any party leader on the economic reform measures.


"No such thing came up in the CWC meeting," Dwivedi said when asked whether somebody raised a dissenting voice on the government measures like diesel hike and FDI.


There was no discussion on the issue of Telangana, he said.


There were earlier speculation that the party can firm up a view in the CWC meeting on the vexed issue of separate statehood.


Though the Congress President did not take any names, sources said Gandhi mentioned in her opening remarks that while one party (Trinamool Congress) has withdrawn support from UPA, two allies (SP and BSP) have reiterated their outside support to the government.


"Government is stable. There is no threat to the government," Dwivedi quoted Gandhi as saying in the meeting.


Sources said that a senior party member felt that if possible, the number of subsidised LPG cylinders to each household should be increased.


The CWC was of the view that all precautions should be taken to remove the apprehensions of people on FDI.


Briefing the CWC, Chidambaram said the government has only three options to improve the economy of the country including raising production, increasing investment in the country and cutting on subsidies on which it is working.


After a number of CWC members expressed the view that there is a need to convince people about measures and counter the Opposition campaign against the government on the issue, it was decided that the week-long campaign carried out by Union Ministers and senior Congress leaders in different states will be extended further.


The Congress President also expressed sorrow over incidents of communal violence in few states and the violent ethnic clashes in Assam.


AICC general secretary Gulchain Singh Charak, who belongs to Jammu and Kashmir, expressed concern over killings of sarpanches in the state and pointed out that they have not been given powers though more than one-and-a-half year has passed since panchayat elections were held in the state.


The concern prompted Rahul Gandhi to say that it was a serious matter and required attention. Panchayat elections in J&K took place after a gap of 34 years.


A view was also expressed in the CWC that opposition parties ruling in states are making political capital out of central schemes by passing them as their own initiatives.


One of the leaders raised this in the context of Gujarat, saying posters of Chief Minister Narendra Modi are put up to display work carried out under central government schemes.


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FDI in aviation: Should foreign investors jet in?

The writer looks at the policy decision of allowing FDI in aviation and its implications on the industry

It is exactly ten days since prime minister Dr Manmohan Singh made the bold announcement permitting 49% foreign direct investment (FDI) in aviation apart from FDI entry into multi-brand retail. Plus a host of other far reaching decisions that would revive the investors’ confidence everywhere.


For several months now, Air India has been in the news for a variety of wrong reasons, not exactly pleasant to repeat here. The biggest financial boost from the government has not been able to revive it to its former glory though the Dreamliner has landed for it in India.


Kingfisher in the south, spearheaded by Dr Vijay Mallya has been in doldrums as well, heavily overburdened and under financial strain. It may be recalled that Capt Gopinath’s

Air Deccan, really the people's airline, was gobbled up by Kingfisher, couple of years ago.


So, in the aviation industry, two of the relatively smaller airlines, SpiceJet and Go Air, have been making waves and really ruling the sky with customer service and competitive fares. Their occupancy figures have been good, too.


Will foreign investors who have been closely monitoring the Indian aviation scene show interest to enter the market, now that 49% holding is permissible?


Yes, it is most likely, but it is too early to predict the moves in this sector as discussions and negotiations are probably being held in secret!


We now turn our attention to the unfortunate marriage of Indian Airlines with Air India.  Even after years of their tying the knot, there has been no teamwork or cohesion amongst the personnel who man the airlines, as their relations have remained strained from the start, in terms of seniority, parallel authority and so on, as reported in the media from time to time.  But the government continues to fund the airline, because of prestige issues, but this has to stop at some point of time.


Why not now let the government take a bold decision on the aviation industry itself?


If government has already made serious efforts to privatize state-owned companies by disinvestment, then Air India should be Balkanized in terms of profit making and losing sectors. Without any compunction, loss-making sectors should be closed. Profit-making sectors should be spun off into independent companies. 


For example, if the India-Gulf sector is profitable, let there be Air-India-Gulf Ltd; likewise, Air-India-Orient Ltd will cover the Far East sector and so on. Having decided on such a bold move, let the government permit FDI-Airlines in the newly-established companies up to 49%.


There is no question of prestige issue involved in having a loss-making route to UK, USA or to Europe or Australia. Profit making with excellent customer service should be our prime concern and nothing else. Period.


Having said that how do we welcome the FDI entry in the domestic sector?  With open arms, of course!


Such a move will truly bring in much-needed capital and technological support. Safety and service will improve. The only provision that can be made is that employment opportunities should be open to Indian nationals without any restrictions.


Also, FDI-Airlines need to help, develop and invest in opening up three to four new approved (by the civil aviation ministry) airports every year of operation and commit to extend service to these destinations. They need to establish hanger and maintenance shops in at least four major entry/exit points and foreign personnel, if employed, will be subject to usual security clearances in the normal way.


While talking about this industry, we must place on record the great service that Tatas have rendered in handing over Air India to the government years ago on a platter. Now that Ratan Tata is free from other industrial worries and a qualified pilot himself, with years of business acumen, why not hand over any one of the sectors, even if loss-making, to him? He is one guy who can turn it around into profit. And it is time that the civil aviation ministry wakes up to its moral responsibility and seeks his advice and assistance in true patriotic spirit, to which he will respond positively.


New entrants under this scheme should be able to commence operation within six months and have the infrastructural facilities within 12 months thereafter.


Finally, any international airline that can set up a manufacturing hub, to cover its interest in India and the Far East (or elsewhere for that matter); will have the first preferential treatment under this scheme! India has the necessary industrial base and manpower potential for such a venture to operative successfully.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)


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