US embassy cable - 05NEWDELHI2086

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 002086 
 
SIPDIS 
 
E.O. 12958: DECL: 03/17/2015 
TAGS: ECON, PGOV, PINR, IN, Indian Domestic Politics 
SUBJECT: A CHASTENED CONGRESS FACES HARSH REALITIES 
 
REF: NEW DELHI 1519 
 
Classified By: DCM Robert O. Blake, Jr. for Reasons 1.4 (B, D) 
 
1.  (C) Summary: As India's leading newsmagazine splashed 
across the cover of its March 21 issue, "the halo has 
slipped," from Sonia Gandhi after Congress' electoral 
setbacks and questionable decisions in Bihar, Goa, and 
Jharkhand.  The long term impact for Congress and the BJP is 
unlikely to be serious.  Congress has closed ranks behind 
Mrs. Gandhi and PM Manmohan Singh, and media attention could 
quickly turn elsewhere.  Congress' failed gambles in remote 
state elections, are likely to have little or no impact in 
New Delhi, where the UPA remains firmly in control.  Congress 
heavyhandedness has angered allies in the United Progressive 
Alliance (UPA), but they are content with the status quo and 
will do nothing to risk a government downfall.  As long as 
the UPA alliance remains firm, the BJP cannot use this 
episode to score substantive gains, although Congress faces 
increased pressure from the BJP as a result of the USG 
decision to revoke Gujarat CM Modi's visa (Septel).  End 
Summary. 
 
Electoral Missteps 
------------------ 
 
2.  (C) A series of Congress miscalculations and missteps has 
damaged Sonia Gandhi's image as the "renunciate" who gave up 
her chance to become Prime Minister, and tarnished her 
party's reputation.  Regional parties dominated in the three 
states that recently-concluded assembly elections (Jharkhand, 
Bihar, and Haryana).  Congress unwillingness to acknowledge 
their predominance has spoiled ties with several regional 
allies, and opened the party to charges that it was 
undermining democracy. 
 
3.  (C) According to press reports, two coteries, one local 
and one in New Delhi, devised the Congress electoral strategy 
in these elections and convinced Mrs. Gandhi to approve it. 
In Delhi, the principal campaign leaders included HRD 
Minister Arjun Singh, senior Congress leader M.I. Fotedar, 
and Water Resources Minister Priyaranjan Das Munshi.  The 
Congress leaders in the states included: All India Congress 
Committee (AICC) functionary Subodh Kant Sahai, former Chief 
Minister of Chhattisgarh Ajit Jogi, Jharkhand Governor Syed 
Sibtey Razi, and former MP R.K Anand.  These leaders 
recommended that the party not nurse the UPA coalition, in 
favor of building a base for a Congress revival in North 
India.  Mrs. Gandhi purportedly agreed to cast aside Laloo 
Prasad Yadav, and to ally with Bihar Dalit leader Ram Vilas 
Paswan and Jharkhand tribal leader Shibu Soren. 
 
4.  (C) The strategy fared miserably in both Jharkhand and 
Bihar.  In Bihar, Congress declined from 12 assembly seats to 
10, and in Jharkhand from 11 to nine, while Laloo's Rashtriya 
Janata Dal (RJD) won 75 seats in Bihar to remain the state's 
largest party.  Soren and Paswan failed to win enough seats 
to secure a majority in either state.  If Congress had not 
burned its bridges with the RJD, and divided the anti-BJP 
vote, the UPA could have easily formed the government in 
Jharkhand and Bihar. 
 
Anti-Democratic Heavyhandedness 
------------------------------- 
 
5.  (C) Having failed at the ballot box and managed its 
coalition poorly, Congress then compounded its errors by 
trying to use compliant governors to install UPA governments 
in Goa and Jharkhand, even when they did not have a majority. 
 The strategy compelled the Supreme Court to intervene in the 
Jharkhand case, while the ruling party ended-up dismissing 
its own government in Goa.  The NDA was quick to respond in 
the media, accusing Congress of "murdering democracy," and 
"attempting to return to the bad old days of the Emergency." 
 
 
Is Sonia Responsible 
-------------------- 
 
6.  (C) Although the BJP has attacked the PM for being 
"invisible," party President L.K. Advani acknowledged that 
the PM had little, if any, role in the recent political 
machinations, declaring Sonia Gandhi as the principal 
culprit.  The pro-BJP weekly "India Today" argued in its 
March 21 cover story that despite Congress attempts to 
distance her from the fiasco, the governors in Jharkhand and 
Goa could not have acted without her assent, and without 
keeping her fully informed throughout.  "India Today" 
described Mrs. Gandhi's renunciation of the Prime 
Ministership as a "show" meant to provide her "maximum 
empowerment by other means," arguing that she personally 
makes all major political decisions, has masterminded the 
Congress political strategy since the UPA came to power in 
2004, and should therefore be held responsible. 
 
Dissension in the Ranks 
----------------------- 
 
7.  (C) These state level developments have caused dissension 
within the UPA, with the regional satraps resentful of 
Congress meddling and heavy-handedness.  Nationalist Congress 
Party (NCP) Chief Sharad Pawar continues to resent Mrs. 
Gandhi for selecting the Chief Minister in Maharashtra, even 
though the NCP won more seats than Congress in the Fall 2004 
elections there.  Although Laloo Yadav remains dependent on a 
sympathetic UPA government in New Delhi to return to power in 
Bihar, he has publicly expressed bitterness and anger for the 
way he has been treated. 
 
8.  (C) The next round of state level elections is scheduled 
for February 2006, when Tamil Nadu, West Bengal and Kerala go 
to the polls.  Congress does not have a sufficient power base 
to come to power on its own in any of the three states, and 
will again have to rely on regional allies to form UPA 
governments.  In Tamil Nadu, UPA ally DMK Chief M. 
Karunanidhi, has already stated that he will not share power 
with his Congress allies should he win.  In West Bengal and 
Kerala, Congress will contest against the Communists. 
 
Confessions and Confusion from Congress 
--------------------------------------- 
 
9.  (C) In a March 15 meeting with Poloff, AICC Secretary 
Wasim Ahmed admitted that his party had made a series of 
blunders over the past several months.  Laying the principal 
blame on such state level politicians as, Ranajan Das Munshi, 
Subodh Kant Sahai, Ajit Jogi, and Syed Sibtey Razi.  Ahmed 
asserted that they told the Congress High Command that: 
 
--Laloo Yadav was very vulnerable and could be removed from 
power; 
--Ram Vilas Paswan would deliver the Muslim and Dalit vote on 
election day; 
--Paswan and Congress would form the Bihar government without 
Laloo Yadav; 
--Shibu Soren's JMM would emerge as the largest party in 
Jharkhand; 
--Congress and the JMM would form the government in 
Jharkhand; and 
--Congress could use the Goa governor to grab power there. 
 
10.  (C) Ahmed argued that neither Mrs. Gandhi, the PM, nor 
senior advisors Pranab Mukherjee, Arjun Singh, and Makhan Lal 
Fotedar should bear any responsibility, as they had all 
relied on state cadres for advice.  He claimed that he and 
other party insiders have told Mrs. Gandhi that the election 
outcome signals the need for a change in strategy, and that 
Congress must stop interfering with its regional allies, give 
them free reign, or face disaster.  In Ahmed's view, UPA 
allies are now united in their suspicion of Congress, and if 
not placated will stop cooperating, leading to potential UPA 
losses in Bihar, Goa, Tamil Nadu and Uttar Pradesh (UP), with 
the Communists poised to decimate Congress in Kerala and West 
Bengal.  Ahmed maintained that Congress must reassure the 
regional parties by humbly supporting Laloo Yadav's efforts 
to regain power in Bihar, ending support for Paswan, and 
convincing the DMK in Tamil Nadu, and the Communists in West 
Bengal and Kerala, that Congress would not seriously oppose 
them in 2006. 
11.  (C) Ahmed also confirmed that the Congress strategy for 
reviving its fortunes in UP has not been successful, and that 
the party has decided that since it cannot return to power on 
its own, it must play junior partner to a regional party. 
Ahmed claimed that Congress is currently negotiating an 
informal alliance with BSP leader and former Chief Minister 
(CM) Mayawati, under which the two parties would not contest 
against each other in key constituencies, and Congress would 
support Mayawati for CM after the election.  The negotiations 
are not going smoothly, he maintained, as Mayawati is not yet 
convinced that Congress can provide much help in her battle 
against her rival and current CM Mulayam Singh Yadav.  Until 
an agreement can be worked-out, Congress has no choice but to 
leave Mulayam Singh Yadav and his Samajwadi Party (SP) in 
control. 
 
Straight Talk from a Journalist 
------------------------------- 
 
12.  (C) Political journalist Zafar Agha stressed to Poloff 
on March 15 that Congress and the BJP would both like to 
reduce the influence of regional parties and create a two 
party system in India.  According to Agha, Congress hoped to 
remove Laloo Yadav and replace him with pliant allies -- 
Paswan in Bihar, and Shibu Soren in Jharkhand -- but has 
failed on both counts.  Agha argued that both parties would 
continue to displace regional parties whenever they had an 
opportunity, but were not overly concerned about failure, as 
political battles in remote areas like Bihar and Jharkhand 
have little practical impact in New Delhi.  Agha maintained 
that it was ludicrous to believe that Mrs. Gandhi did not 
approve the Congress strategy, asserting that "few believe 
Congress efforts to lay the blame on a few rogue officials." 
 
13.  (C) Agha pointed out that the news was really not that 
bad for Congress and the UPA.  He predicted that the NDA 
government in Jharkhand would be weak and may not last as 
long as six months before the UPA brings it down.  Likewise, 
the UPA will exercise de-facto rule in Bihar, and likely form 
the government there, with or without Laloo.  In Agha's 
estimation, the losses and gains from the recent election 
were largely symbolic.  The BJP is pleased because it can use 
its friends in the media to create the impression of a 
BJP/NDA revival, and that Congress has been humbled. 
However, there will be few substantive benefits for the BJP, 
in that it cannot change the balance of power in New Delhi. 
While UPA allies in the states will continue to grumble, they 
will remain solidly with Congress in New Delhi, as they want 
political stability, and have nowhere else to go, he 
maintained. 
 
Comment 
------- 
 
14.  (C) While the BJP has used this episode to score points 
against its Congress rivals, shore up its National Democratic 
Alliance (NDA), and cast doubt upon the credibility of Sonia 
Gandhi and PM Singh, the long-term gains could be minimal. 
The NDA government in Jharkhand will be weak and vulnerable 
and the BJP does not have the strength on the ground to come 
to power in next year's elections.  Although Congress has 
lost some of its luster, the Indian economy continues to do 
well, there are no pressing law and order or communal 
problems, and most Indians are happy with improved 
India/Pakistan relations. 
 
15.  (C) Another party would replace advisors who gave its 
leaders poor advice and devised a flawed strategy.  Such 
moves are anathema in Congress, however, where personal 
loyalty to Sonia Gandhi is prized above performance.  Within 
the Congress culture, loyal footsoldiers are seldom called to 
task, and no prominent Congress leader is likely to lose his 
or her job over this episode.  Confident that it can maintain 
the UPA alliance in New Delhi, Congress will wait for this 
episode to blow over. 
 
16.  (C)  Congress faces increased pressure from the BJP as a 
result of the USG decision to revoke Gujarat CM Modi's visa. 
For analysis see Septel. 
MULFORD