The Bharatiya Janata Party said it is pro-economic reform but wants the government to stoop before it can conquer on securing its support for key legislative changes, chiefly in banking, insurance and pensions, which form part of the reform agenda.
On the face of it, the United Progressive Alliance has a comfortable majority in the Lok Sabha (see table).
Of this, the Congress accounts for 153 seats. The Samajwadi Party, the government's new-found ally, with 33 seats lacks sufficient numbers to ensure legislation is passed. But the slightest deficiency in floor management could see the Bills collapse.
Given this, the government cannot afford to introduce such critical legislation until it is sure of the BJP's support, especially as the Left parties have been vociferous in their opposition to these reforms and will do everything to stall them.
| Alignments | |||||
| Strength of the House |
541 |
United Progressive Alliance |
274* |
National Democratic Alliance |
159 |
| (*Only if each and every MP from the alliance is present in the House) | |||||
| Some controversial bills pending in the Lok Sabha |
| The Pension Fund Regulatory and Finance Development Authority Bill 2005 Introduced on March 21, 2005 STATUS: The report of the Standing Committee was presented to the Lok Sabha on July 26, 2005 |
| The Banking Finance Regulation (Amendment) Bill 2005 Introduced on May 13, 2005 STATUS: The report of the Standing Committee on Finance was presented to the Lok Sabha on December 13, 2005 |
| The Factories (Amendment) Bill 2005 Introduced on August 16, 2005 |
| The Forward Contracts Regulation Amendment Bill 2006 Introduced on March 21, 2006 STATUS: The report of the Standing Committee on Food Consumer Affairs and Public Distribution was presented to the Lok Sabha on December 19, 2006 |
The amendments chiefly concern raising foreign investment limits in insurance companies, easing voting rights for foreign shareholders in banks and privatising the pension system.
The BJP concedes that it supports many of the changes in the policy architecture governing the banking and insurance sector. But it wants to be treated right. "No one has talked to us (about these reforms); when they do, we will consider the matter. But we are generally pro-reform," said BJP General Secretary Arun Jaitley.
Immediately after the trust vote, which saw the Left parties and the UPA parting ways, Finance Minister P Chidambaram exhorted all those who had supported reform to come forward and help the government carry them through.
"We don't consider statements by the finance minister to the media enough reason to pledge our support. They need to speak to us," said deputy leader of the BJP in the Lok Sabha V K Malhotra.
However, pressure is building up on the BJP from other quarters. Several industrial houses have promised the government they will leverage their position with the BJP.
To this end, industrialists active in industry chambers Ficci and CII will be meeting the BJP brass over the next few days to emphasise the importance of these reforms for the future of India Inc.