India Front takes power
India's immediate political future was summed up aptly by a headline in a Bombay daily: It's back to Front! The reference is to President Shankar Dayal Sharma's invitation to the 13-party United Front to form the next government, after the 13-day-old Bharatiya Janata Party (BJP) minority government failed to gain a vote of confidence in parliament on Tuesday.
The Front's prime ministerial candidate, H.D. Deve Gowda, Chief Minister of Karnataka, was the most vociferous among those who condemned the president's earlier invitation to the BJP, as the single largest party in parliament, to form a government after the Congress was beaten in general elections.
Mr Gowda's ambition to be the country's 12th prime minister has been in evidence since the Front was hastily cobbled together shortly after announcement of the election results. He was elected its leader on May 15.
Mr Gowda gets his chance to form yet another minority government whose chances of survival beyond June 12, the date set by the president for the next confidence vote in parliament, appear slim.
In the 532-seat house, the BJP is the single largest party with 193 seats, and the Congress is next with 136.
The 13 Front constituents hold 174 seats, with the remaining 27 held by independents and minor parties.
The fear now is the effect such a hotch-potch government will have on the economic climate of the country.
No doubt the Front government will be in as much of an unholy hurry to get its pet projects implemented as was the BJP government to get the Enron project in Dabhol passed before its term expired.
There also could be official reneging on decisions taken by earlier governments - a fact evident from the manner in which Samajwadi Party leader Mulayam Singh Yadav said the Deve Gowda government would review the BJP regime's decision extending counter guarantees for the first phase of the Enron project.
Industrialists see fresh elections looming, a prospect tipped by analysts before the elections.
'The lack of common programmes and the question mark over the support for the coalition from the Congress, honestly casts serious doubts on the feasibility of a Front government,' senior director with Tata Sons, Sharukh Sabavala, said.
'These frequent changes in government are bound to create uncertainty in the minds of prospective external investors into India,' chairman of Hindustan Construction Co, Ajit Gulabchand, said.
'Overseas corporate bodies and mutual funds would think twice before bringing their funds into the country.' On the economic front, there is general consensus that economic reforms will not be dumped.
'I foresee no change in the economic scenario if the Front comes to power,' managing director of DCM Shriram Consolidated, Ajay Shriram, said.
Rahul Bajaj, chairman of Bajaj Auto, said: 'The economic policies that the new government will follow are likely to depend on who are appointed the new finance, commerce and industry ministers.
'Other things being equal, a lot of people would feel more confident if Mr Chidambaram (Tamil Maanila Congress, TMC, leader P.Chidambaram) became the next finance minister.' Indeed, despite the TMC's reluctance to join the Front government, there is optimism that Mr Chidambaram will accept the finance portfolio. The former commerce minister resigned from Congress under a cloud, and then left the party altogether to form his own party in his home-based state of Tamil Nadu.
Stock market indices surged yesterday, although trading was thin due to a holiday in some areas.
'If Chidambaram takes over finance, he will continue the pragmatic policies of Manmohan Singh,' leading stockbroker Parag Parikh said. 'If that happens, even a period of extended political uncertainty may not adversely affect the stock markets, which earlier had discounted the election results.' The hope is for stable government for a year or two, no matter which parties form it. Investors lose fears, Markets Page 1
