Playing the alliance game

Nobody should be surprised if the Congress-led alliance at the Centre now makes favourable policy overtures to Naveen Patnaik also, like it has done for Nitish Kumar and Mamata Banerjee, in the hope of strengthening its prospects after the next general elections, says AK Bhattacharya

The controversy over the Left activists’ attack on West Bengal Finance Minister Amit Mitra outside Yojana Bhavan in New Delhi last week appears to have died down considerably. This is almost an anticlimax, particularly after the shrill manner in which West Bengal Chief Minister Mamata Banerjee lodged her protest over the incident with Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Her protest then seemed to suggest that this would be yet another bone of contention between the Centre and her party, Trinamool Congress. After all, her finance minister was heckled and manhandled in the heart of the capital city of New Delhi!

Indeed, for a couple of days after the incident on April 9, there was sporadic violence in West Bengal. Protest marches too were held by both the Left parties and the Trinamool Congress. But a week later, normalcy seems to have returned in the state. More interestingly, fears that this could be a potential trigger for another round of battle between leaders of her party and the Congress have proved to be an exaggeration.

What, therefore, is going on between the two political parties that were once coalition partners of the United Progressive Alliance government at the Centre?

The unfortunate manhandling of Amit Mitra has overshadowed a larger economic development that underpins the fiscal relations between the Centre and West Bengal. That day, when the state’s finance minister was heckled by members of the Left student unions, the Planning Commission gave its approval to a 17 per cent increase in the Plan outlay for West Bengal. The state had asked for a 17 per cent increase in the Plan outlay for 2013-14, and the Planning Commission met that demand.

It is a difficult to recall the last time when the West Bengal government had such an amicable meeting with the Planning Commission over the quantum of increase in its Plan outlay.

Remember that this is no giveaway by the Planning Commission. The state of West Bengal has improved its finances -- its own tax collections have improved significantly. Today, its own tax revenue is close to five per cent of its gross state domestic product, up from 4.5 per cent each year between 2004-05 and 2011-12. Even current transfers (which include devolution of taxes and grants-in-aid from the Centre) have improved to 6.7 per cent of GSDP, compared to around five per cent during the five-year Left Front tenure that ended in 2011.

Note also what Mamata Banerjee said about her other fiscal demands at the end of the Planning Commission meeting. She played down the contentious issue of granting the state relief on repayment of its outstanding debt of over Rs 2 lakh crore. The Planning Commission was not the place to discuss such an issue, she declared when asked if she had found a solution to the state’s debt problem.

This may well be true. But when has Mamata Banerjee paid heed to such fine distinctions between the different arms of the Union government and stayed away from blaming the Centre for all the state’s ills?

Clearly, the relationship between the Congress and the Trinamool Congress has undergone some change in the last couple of months. A senior Congress leader explained this quite succinctly during a recent media interaction. Within the state, the Congress would treat the Trinamool Congress as a political adversary for obvious reasons. But at the national level, the two parties have a lot to gain by addressing each other’s concerns and exploiting the ties to mutual benefit.

In this context, a 17 per cent hike in Plan outlay for West Bengal certainly helps cement that relationship, particularly in the run-up to the general elections to be held in about a year from now.

A similar warming up of the relationship between the Congress and Nitish Kumar’s Janata Dal-United is noticeable since the latter’s demand that Bihar be granted a special status has evoked a positive response from the Centre. There is now even speculation that the Union government is finalising a special package of economic assistance for Bihar. If Nitish Kumar is reconsidering his association with the National Democratic Alliance on the question of the Bharatiya Janata Party making Narendra Modi its prime ministerial candidate, the role of the Union government considering a special economic package for Bihar at this stage cannot be underestimated.

Odisha Chief Minister Naveen Patnaik has also made it clear that his party, the Biju Janata Dal, would prefer a third front to form the next government at the Centre, without of course specifying what that front should constitute and who should lead it. Nobody should be surprised if the Congress-led alliance at the Centre now makes favourable policy overtures to Naveen Patnaik also, like it has done for Nitish Kumar and Mamata Banerjee, in the hope of strengthening its prospects after the next general elections.

For the Congress, fighting a grim battle to retain power after the next general elections, all the three regional leaders could make a big difference. Even the Bharatiya Janata Party would also be thinking the same way if the Narendra Modi gamble does not pay off. And that is what makes the forthcoming general elections so much more interesting.