US embassy cable - 05NEWDELHI1710

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 001710 
 
SIPDIS 
 
E.O. 12958: DECL: 03/04/2015 
TAGS: ECON, PGOV, PINR, IN, Indian Domestic Politics 
SUBJECT: STATE ELECTIONS SET OFF POLITICAL TURMOIL IN INDIA 
 
REF: A. NEW DELHI 1519 
 
     B. MUMBAI 370 
     C. CALCUTTA 91 
 
Classified By: DCM Robert O. Blake, Jr. for Reasons 1.4 (B, D) 
 
1.  (C) Summary: Attempts by Congress to grab power in Goa 
and Jharkhand has thrown the Indian domestic political scene 
into turmoil.  Observers in Delhi see these moves as part of 
a larger strategy by Congress operatives to gain control over 
a majority of Indian states.  Should Congress succeed in 
Jharkhand, Bihar is likely to be next.  Congress has bet that 
it can win control of the North Indian Hindi Belt, and 
position itself to govern India for decades to come.  The BJP 
is outraged, and has launched a vigorous counterattack, 
foreshadowing a period of protracted political infighting 
that will poison the political climate in the weeks and 
months ahead.  These events have paralyzed the budget session 
of parliament, leading to doubts that it will be able to 
conduct business.  The Jharkhand episode in particular has 
damaged the reputations of Sonia Gandhi and the technocratic 
Congress leadership, and emboldened the BJP.  The Left, while 
not happy with these steps, appears willing to cooperate, 
because it fears a resurgent BJP.  President Kalam is 
conferring with the Jharkhand governor on March 4, and he 
could convene the Jharkhand Assembly for a floor vote as 
early as March 7.  With the GOI embroiled in domestic 
politics, some important initiatives in which the US is 
interested could be put on hold until the Congress/BJP battle 
is resolved.  End Summary. 
 
The Power Grab at the State Level 
--------------------------------- 
 
2.  (C) The Congress Party crossed something of a Rubicon 
recently when it launched a power grab in Goa (Ref B) and 
Jharkhand (Ref C).  Despite its poor performance in the 
Jharkhand elections (Ref A) and the lack of a clear majority 
in Goa, Congress determined that it would manipulate the 
levers of power in New Delhi and compliant governors to 
consolidate its control of two more states.  This outraged 
the opposition NDA, making political consensus next to 
impossible and setting off a protracted period of 
Congress/BJP infighting.  The Congress move was a deliberate 
gamble for high stakes.  If successful, it could solidify the 
Congress position and set the stage for a long period of 
Congress rule across the country.  If not, a revived NDA 
could score serious blows against Congress. 
 
The Master Plan 
--------------- 
 
3.  (C)  In our estimation, the Congress leadership decided 
that gaining control of state governments, resources and 
patronage would be so valuable to its bid to cement itself as 
the preeminent player in Indian politics that it paid little 
attention to appearances or consequences.  The logic is that 
the Indian electorate has become so cynical that it will over 
time put aside its initial revulsion and accept these tawdry 
tactics, especially once Congress begins dispensing 
patronage.  Most of the Indian public have long assumed that 
politicians are for sale to the highest bidder, and are not 
that shocked to see "independent" MLAs lining up to support 
Congress governments in exchange for ministerial berths and 
cash considerations. 
 
4.  (C) There is much speculation in the Indian political 
class that Congress does not intend to stop with Jharkhand 
and Goa.  Should it succeed there, commentators expect the 
party to use similar tactics to re-install Laloo Prasad Yadav 
and his wife Rabri Devi in Bihar, and then to go after the 
big prize - Uttar Pradesh (UP).  Mohan Singh, a prominent MP 
from Mulayam Singh Yadav's Samajwadi Party (SP), predicted to 
Poloff recently that this was only the opening salvo in a 
concerted Congress assault aimed at recapturing the entire 
North Indian Hindi belt.  According to Singh, the 
installation of a compliant governor in Lucknow willing to do 
its bidding is part of a Congress plan to undermine and bring 
down the SP government.  BSP MP Ilyas Azmi, who is close to 
BSP leader Mayawati, confirmed to Poloff on March 3 that 
Congress is negotiating a Congress/BSP alliance aimed at 
rebuilding a coalition of Dalits, Muslims and upper castes 
capable of recapturing the state. 
 
5.  (C) On March 1, well-connected journalist Saeed Naqvi 
told Poloff that his interaction with the Congress leadership 
has convinced him that they have not abandoned their "old 
think" and are determined to use any tactics to recapture 
their old base in the Hindi belt, win an absolute majority in 
Parliament, and send a clear message to UPA allies that they 
must be compliant and accept Congress "leadership," or face 
marginalization.  Naqvi insisted that this plan was out of 
step with present Indian realities, and the Congress must 
learn to deal honestly with regional parties.  This was 
echoed by Azmi, who said that after capturing UP, Congress 
hopes to install UPA/Congress governments in Gujarat, Madhya 
Pradesh, Chhattisgarh and Rajasthan.  He maintained that 
Rajasthan is being saved for last, as Chief Minister 
Vasundhara Raje is not as vulnerable as other BJP leaders. 
 
Congress Viewpoints 
------------------- 
 
6.  (C) Congress politicians have downplayed the power grab, 
trying to depict it as a natural result of hung assemblies. 
Congress MP Maulana Obaidullah Azmi claimed that his party 
was only using tactics perfected by the BJP during the NDA 
government, while Nationalist Congress Party (NCP) MP Tariq 
Anwar said everything is going according to plan, except that 
by backing Shibu Soren for Chief Minister of Jharkhand, 
Congress provided an opening for the BJP to cry foul.  He 
conceded that Soren "does not have a good image," but would 
nevertheless produce a clear majority on March 21, the 
current deadline for the UPA to prove its majority in the 
Jharkhand State Assembly.  Congress ally D. Raja of the CPI 
rather disingenuously claimed that the BJP should not be 
upset about events in Jharkhand, as it could "prove its 
point," at that time. 
 
7.  (C) In a March 3 meeting with PolCouns Sonia loyalist and 
Congress spinmeister Rajiv Desai (strictly protect) was 
confident that when the dust settles, Congress would emerge 
the winner in Jharkhand and Bihar.  Desai was also confident 
that Mrs. Gandhi would successfully disassociate herself from 
the more tawdry aspects of recent events, while insisting 
that Jharkhand Governor Razi was incapable of taking such a 
dramatic step on his own.  Now that the Congress leadership 
has focused on Jharkhand and Bihar, he maintained, it will 
end the situation quickly.  He named Defense Minister Pranab 
Mukherjee and Sonia loyalist Ahmed Patel as the key players 
in the damage control effort.  Desai was optimistic that the 
controversy surrounding the elections would make it harder 
for the Left parties to attack the GOI's handling of economic 
issues, on the grounds that it fear a resurgent BJP more than 
reform. 
 
BJP Viewpoints 
-------------- 
 
8.  (C) The power grab has the BJP up in arms and more united 
and engaged than at any time since its fall from power in May 
2004.  BJP MP Ram Nath Kovind denounced the Congress moves as 
a "danger to democracy," and claimed that "the myth of Sonia 
Gandhi as a great politician, known for her renunciation, has 
exploded." BJP MP Kalraj Mishra was even more scathing, 
stating "this exposes the real designs of the Congress, that 
the party cannot tolerate opposition and would like to 
monopolize all political activity.  I am hopeful that the day 
is not too far off when these undemocratic acts will hugely 
benefit us." 
 
What Will Be the Impact? 
------------------------ 
 
9.  (C) The situation is extremely fluid and could change 
quickly.  As of March 4, Congress has experienced dramatic 
setbacks, with a reactivated BJP dramatically flying in 41 
MLAs at the President's residence in New Delhi, a fairly 
convincing display that it has the real majority in 
Jharkhand.  BJP President LK Advani was quick to assert that 
since the BJP was the first to present a majority in the 
state assembly, Jharkhand Governor Syed Sibtey Razi should 
ask the party to form the government.  Labeling Razi "a 
contract killer of democracy" being "micromanaged" by Sonia 
Gandhi, Advani demanded dissolution of the Soren government, 
its replacement by a BJP government, and Razi's recall.  In 
view of this, President Kalam may request that Razi convene 
the Jharkhand State Assembly within 72 hours for a floor 
vote, according to the media. 
 
10.  (C) As the aggrieved party, the NDA now has an issue 
around which to rally the faithful and attract support. 
Before the budget session the BJP/NDA was clearly on a 
downward trend.  The assembly elections were make or break 
contests for them, and they did well enough to revive their 
spirits and keep their hat in the ring.  Almost everyone 
agreed that they should have formed the government in 
Jharkhand, as they were very close to winning a majority. 
Likewise, few are convinced that Congress/UPA has a clear 
majority in Goa and should form the government there.  The 
Congress-led government confirmed its majority in a March 4 
vote of the Goa State Assembly.  Yet its majority remains 
razor-thin and vulnerable to the types of machinations that 
led to its gaining power in the first place (Ref B).  In 
addition, the BJP is challenging its recent dismissal from 
power in Goa before the Indian Supreme Court, which could 
rule as early as March 4. 
. 
11.  (C) Congress is banking on the fact that the Left 
parties will join with "all secular parties" to stave off a 
BJP/NDA resurgence.  In a March 2 meeting with Poloff, 
Communist Party of India Secretary D. Raja confirmed that the 
Left was relatively happy with the budget and felt that 
Congress was responding to its calls for increased social 
spending and more taxation of the wealthy.  He also confirmed 
that the Communists have committed their MLAs to the UPA 
effort in both Bihar and Jharkhand.  Raja said that he fully 
expected a resurgent BJP/NDA to mount a counterattack, and 
the Left parties to stand with the UPA against it. 
 
12.  (C) In playing dirty, Congress has tarnished its image, 
and demonstrated that is has no long-term friends, only 
temporary allies.  In Bihar, it allied first with the 
discredited Laloo, then with Paswan against Laloo, and is now 
back with Laloo against Paswan.  There is a lingering 
distrust of Congress among Indian politicians and these 
developments will only encourage suspicion.  Most will assess 
that regional parties that ally with Congress are 
self-serving and mercenary. 
 
Long-term Implications 
--------------------- 
 
13.  (C) Congress can expect its popularity to fall as a 
result of these moves.  With the party strategy going poorly 
in Jharkhand, Sonia Gandhi and PM Manmohan Singh are 
distancing themselves from the effort.  Congress spokeswoman 
Ambika Soni and others continue to insist that Mrs. Gandhi 
and the PM were not involved in the Jharkhand events, and 
that Governor Razi acted on his own.  Despite these attempts 
at damage control, it will be difficult for Mrs. Gandhi and 
Manmohan Singh to keep their reputations untarnished, as most 
Indians assume they had a hand in events in Jharkhand and 
Goa.  Should Congress gain control in both states, it is not 
likely to take long for most political players to decide that 
the balance of power has shifted and that it is best to go 
along with the new dispensation, take advantage of new 
opportunities, and cooperate with the newly-installed 
governments. 
 
14.  (C) The budget session of parliament is likely to be the 
first casualty.  Few now expect it to conduct serious 
business during the remainder of the session, which ends on 
May 13.  This means that the budget could pass without 
debate, which would make the Left happy, as its social 
initiatives would remain in place, unchallenged by the 
opposition.  In return, the Left could decide to stress 
"secular unity" and tone down its public opposition to the 
UPA, resulting in a measure of "stealth economic reform," as 
Congress enacts economic measures without parliamentary 
debate or contentious squabbling with the Left.  The 
Communists and Congress will need each other more than ever 
now, and we suspect that they will continue to coordinate, 
with the Left receiving some economic concessions in exchange 
for its political support. 
 
Who is Responsible 
------------------ 
 
15.  (C) The UPA "core group" consisting of the PM, Mrs. 
Gandhi, and the "senior ministers" (Pranab Mukherjee, Arjun 
Singh, Shivraj Patil and Ghulam Nabi Azad) is coordinating 
the Congress handling of the state elections.  The aggressive 
Congress strategy carries the trademark of hard-bitten 
professional politicians in the Congress leadership.  The 
role of the PM and Mrs. Gandhi is not yet clear.  It is 
conceivable that veteran ministers drafted the plan and 
presented it to Mrs. Gandhi for her approval.  PM Singh has 
remained aloof from domestic political machinations and may 
not have been involved at all.  Based on his reputation and 
priorities, we doubt he would have acquiesced in an approach 
that has clearly distracted energies from his priority of 
economic reform. 
 
The Gamble 
---------- 
 
16.  (C) Congress has decided to play a high-stakes gamble in 
hopes of restoring its position as India's pre-eminent 
political party, which controls a clear majority of state 
governments.  Over the long term, Congress hopes that this 
will translate into a clear parliamentary majority for the 
UPA and ultimately for Congress.  As recent events have 
demonstrated, such a plan can easily backfire.  Should the 
BJP rally its supporters, present a majority in Jharkhand, 
and force Shibu Soren to step down, it would force Congress 
to go into a defensive mode and postpone its plans for other 
states.  Bihar could then face a protracted period of 
uncertainly.  With Congress and the BJP locked in bitter 
combat, it could take several months for a clear winner to 
emerge, with major policy decisions taking a back seat to 
domestic politics. 
MULFORD