Saturday, April 24, 2010

Coal Cess Opposition Cut Motion: Government in Panic Mode

000000000_CarbonBillionaireIn India, the current government, the United Progressive Alliance (UPA), is desperately struggling to ward off a spate of cut motions on their budgetary proposals, including those for introducing a cess on coal production. A situation serious enough for our Finance Minister to cancel his trip to the US to attend the IMF meeting.  (Read our previous posting on coal cess here) This issue has to be however seen from a perspective. 

For the last decade and a half, federal elections have always resulted in fractured verdicts that necessitated coalition governments. Coalitional politics permitted the blending of tradition with modernity of the Indian society, enabling various identities and sub-identities within it to find democratic expression in the larger political process. The phenomenon is clearly linked to the rise of regional parties on agendas that often touch a national chord such as interests of the assertive backward castes and Dalits or ‘untouchables’.

In recent times, federal coalitional politics additionally also centered around two poles led by the Indian National Congress (INC) and the Bharithya Janata Party (BJP)  respectively – the main two national parties. With the UPA led by the INC and the National Democratic Alliance (NDA) led by the BJP, the role of regional parties within these is also indicative of a more competitive and polarized party system, wherein regional parties with one or two seats can virtually bully the national party leading the coalition.

This situation changed in the last parliamentary elections of 2009, which saw evidence of a sharp reversal of fortunes for regional parties. The two national parties, INC and BJP, together cornered 60% of the seats, leaving regional parties with much diminished influence to affect federal politics. The INC on its own managed to grab nearly 40% of the seats. This left them still short of absolute parliamentary majority but conferred them greatly enhanced political clout within the UPA itself. This increased confidence perhaps explains their boldness to downsize the number of constituent parties of the UPA. Accordingly, the UPA in its second avatar is trying to makeover itself by ousting caste based party allies from its coalition who played an influential role during UPA’s first tenure (2004-2009).

As a result, the UPA, at this juncture, commands with a wafer thin majority in the lower house of parliament while reduced to a minority in the upper house. Till a month ago, the UPA managed to circumvent  limitations to its degree of freedom to make legislative changes through getting other minor parties to lend outside support. All these changed with the UPA trying to introduce the Women’s Reservation and the Finance Bills which saw some of these extended allies moving away from the UPA. It also left some its other minor constituents within the government unhappy and sulking. The current corruption scandal in the Indian Premier League (IPL), whose tentacles extend to serving ministers of the UPA cabinet, has also created fissures within coalition partners.

Taking advantage of the UPA in disarray, the combined opposition are determined to push through a wide array of cut motions, including those related to the proposed coal cess. Cut motions are of three categories: (i). Policy disapproval  (ii). Economic  (iii). Token cut. The BJP led NDA is bringing cut motions of the disapproval of policy kind while the non-NDA opposition is bringing those of a kind that belong to the latter two categories. Nevertheless, they are likely to join forces to support each other’s cut motions through engaging in behind and scene floor coordination strategies. But the danger of a cut motion on a Money Bill is that if the government loses it, then it has to resign on moral grounds.
But the prospect of the government getting defeated is extremely dim. The reality remains that no party or alliance is in position to form an alternate government. What could see the government through this time is that most parties don't want elections. The government is besides  in the position to get at least  two or three major regional parties to abstain from voting. 
Due to El Nino induced drought last year, food inflation spiralled to 18% and was a raging issue some months ago. But agricultural production picked up since then and food commodity inflation showing signs of receding.
With the Indian Met Department predicting a normal monsoon, food prices from now can be expected to decline even more rapidly. Accordingly, price rise can no longer be a viewed an issue that can reap good dividends for the opposition in the event of a snap poll. The bottom line is that even the opposition does not want to impose fresh elections, fearing the wrath of the people.

But the opposition can make the government sweat out in the passing of the Finance Bill. According to Indian Constitution, the upper house of parliament cannot directly make any amendments to a Money Bill passed by the lower house and transmitted to it. It however can recommend amendments that must return to the lower house within 14 days, or less the Bill is deemed as originally passed by it. But in the case where the bill is returned with recommendations for amendments, the lower house  needs to vote again to accept the Bill, with or without these amendments. 

So the opposition’s best chances of pressurizing the government to making changes to the Finance Bill is in the upper house to come up with recommended amendments which forces a revote in the lower house of Parliament. It sends out a clear message to the electorate that it disapproves of the Finance Bill in its present form, putting undue pressure on the ruling coalition to seek a consensus. The opposition can take inspiration from the following developments during the last month:

a. France Scraps Carbon Tax Law (Read here)
b. Italian Senate calls for re-examination of Climate Change & IPCC Science(Read here)
c. Enron, who evolved the concept of carbon trading has been exposed as one of the largest corporate fraud and has now gone bankrupt. Its place in the carbon trading racket has been taken by Goldman Sachs which the US government now accuses of fraud.  (Read here)
d. Now Bangla Deshi climatologists challenge IPCC claim that sea level rises will sink their country. More shame for IPCC and climate alarmist NGOs. (Read here)


  1. What if the government falls? The UPA seems to have the hara-kiri complex

  2. So your reading is that the coal cess would go through and the revenue funding renewable energy. Sad. What a waste of money!

  3. For a poor country where majority are not even connected to the power grid, renewable energy is a sell out.

  4. Bangladesh scientists challenging IPCC - this is total humiliation for the IPCC. What a rout!

  5. It seems the PM will cancel his engagement with SAARC if the budget is not passed by 27th April. The government is sweating it out as you described.

  6. Government confidence of winning because of quid pro quo with Mayawati's 21 MPs. Go easy on their corruption cases. Its sickening