VZCZCXRO8782
RR RUEHBI RUEHCI
DE RUEHCI #0104/01 0881152
ZNR UUUUU ZZH
R 291152Z MAR 07
FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC 1479
INFO RUEHNE/AMEMBASSY NEW DELHI 1393
RUEHBI/AMCONSUL MUMBAI 0605
RUEHCG/AMCONSUL CHENNAI 0611
RUEHKA/AMEMBASSY DHAKA 0387
RUEHKT/AMEMBASSY KATHMANDU 0393
RUEHLM/AMEMBASSY COLOMBO 0163
RUEHIL/AMEMBASSY ISLAMABAD 0314
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USPACOM HONOLULU HI
RUEIDN/DNI WASHINGTON DC
RUEHGO/AMEMBASSY RANGOON 0250
RUEHCI/AMCONSUL KOLKATA 1825

UNCLAS SECTION 01 OF 03 KOLKATA 000104 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PINR SOCI PREL IN
SUBJECT: WHAT DOES NANDIGRAM MEAN FOR THE CPM? 
 
REF: KOLKATA 95, KOLKATA 92, KOLKATA 88 
 
¶1.  (SBU) Summary: The March 14 Nandigram violence resulted in 
at least 14 deaths, badly damaged Chief Minister Buddhadeb 
Bhattacharjee's administration and revealed the ruthless face of 
West Bengal's ruling Communist Party of India - Marxist (CPM). 
It also shifted the dynamics between the CPM and its partners. 
The CPM's national leadership has expressed support for 
Bhattacharjee's administration and for continued economic 
reforms and industrialization (though on a smaller, less visible 
scale), but Bhattacharjee will now be more susceptible to the 
influence of CPM nonagenarian and former Chief Minister Jyoti 
Basu and other CPM hardliners, as well as W. Bengal's Marwari 
industrialists.  As a result, W. Bengal's economic future will 
be influenced by those with a history of inhibiting economic 
progress and maintaining xenophobic policies.  The CPM is part 
of the four party Left Front (LF) alliance that keeps the UPA 
government in power, and Nandigram developments may overflow 
into New Delhi politics.  Some are speculating that a distracted 
CPM will be less confrontational with Congress on the economic 
agenda.  End Summary. 
 
¶2.  (SBU) The death of at least 14 people protesting the GOWB's 
Special Economic Zone policies in the rural district of 
Nandigram, has prompted opposition groups to challenge CPM 
dominance in West Bengal (reftels). However, the fallout from 
Nandigram may be felt most keenly within the CPM itself. 
Contacts told post that the mood after Nandigram among the CPM 
"old guard," led by former Chief Minister Jyoti Basu, is rather 
"upbeat."  These ideological hardliners regard Bhattacharjee as 
a liability -- especially in the run-up to village-level 
Panchayat elections scheduled in 2008 -- because of his 
departure from traditional party dogma (and willingness to 
loosen CPM control over economic interests in the state).  Some 
criticized the CM openly after the Nandigram incident.  This 
faction, which includes such figures as Land Reforms Minister 
Rezzak Mollah, Minister for Housing Gautam Deb, Transport 
Minister Subhash Chakrobarty, and President of the Krishak Sabha 
(the CPM's Peasant's Wing) Benoy Konar, would welcome 
Bhattacharjee's departure as Chief Minister.  The names of Deb, 
Finance Minister Asim Dasgupta, and Commerce and Industries 
Minister Nirupam Sen are already making the rounds as possible 
replacements.  The hardliners see them as more malleable and 
easier to influence. 
 
---------------- 
Complete Control 
---------------- 
 
¶3.  (SBU) Within the Bhattacharjee administration, there are two 
committees that are supposed to be involved in the government's 
decision-making processes.  One is the Cabinet Core Committee 
(CCC), which includes ministers from each Left party such as: 
Bhattacharjee (CPM), Nirupam Sen (CPM), Nandagopal Bhattacharya 
Communist Party of India (CPI), Kshiti Goswami Revolutionary 
Socialist Party(RSP), Naren De (Forward Bloc), and Kiranmoy 
Nanda (Socialist Party), etc.  The composition of the CCC is not 
permanent, and changes over time. 
 
¶4.  (SBU) The other committee is the Left Front Committee (LFC), 
chaired by state CPM General Secretary Biman Basu.  Its 
representatives are the heads of the Left Front partner parties. 
 Over the past couple of years, both the LFC and CCC have only 
met 5-6 times.  Bhattacharjee and Commerce and Industries 
Minister Sen have tended to make major decisions on their own, 
rendering the existing committees irrelevant.  There is no 
regular schedule of committee meetings, and the committees are 
called together only for special reasons (usually after pressure 
by Left Front partners.) 
 
¶5.  (SBU) After Nandigram, the Left partners demanded regular 
committee meetings, and called for Bhattacharjee to consult the 
committees before making major decisions. (Comment:  The CPM's 
"junior partners" in the Left Front government have for a long 
time felt out of the loop on decision making in W. Bengal.  Many 
are unwilling now to take any blame for Nandigram, claiming they 
tried to warn CPM leaders about brewing tensions there.  CPM 
leaders have, for their part, tried to cast aspersions on the 
ultra-Leftists who participated in the Nandigram violence and 
have questioned the loyalty of some Left parties they accuse of 
supporting the protestors. End Comment.) 
 
 
KOLKATA 00000104  002 OF 003 
 
 
------------------------------- 
Should he stay or should he go? 
------------------------------- 
 
¶6.  (SBU) CPM General Secretary Prakash Karat and other national 
CPM officials expressed support for the Bhattacharjee 
administration in recent statements, most likely as a form of 
damage control.  However, there is a clear sense that with 
Bhattacharjee weakened, the CPM hardliners have more say in 
government affairs.  Although unlikely to immediately step-down, 
Bhattacharjee could be moved out of the position, ostensibly for 
health reasons.  Bhattacharjee suffered a mental breakdown 15 
years ago, and a Post contact close to the Chief Minister said 
that he is showing signs of severe stress.  If Bhattacharjee 
does step down, he will likely depart in a manner designed to 
save face for the CPM. 
 
---------- 
Clampdown 
---------- 
 
¶7.  (SBU) The re-emergence of the old guard's influence in W. 
Bengal would make it more difficult for the current UPA 
government to go forward on economic reforms.  The CPM 
leadership will adopt a more conservative approach on national 
policy issues, and be more resistant to change.  In addition, 
the party will be determined to demonstrate that it has not been 
weakened by Nandigram, and will lash out to show its strength. 
This was evidenced by Prakash Karat's editorial entitled "Let 
the Truth Be Known" in "People's Democracy," a CPM-run news 
outlet which he edits (text is available at 
http://pd.cpim.org/2007/0325/03252007_prakash .htm).  The party 
will also attempt to shift the blame for Nandigram to others. 
CPM leader Sitaram Yechury has already claimed that it was the 
UPA's SEZ policy which fostered the violence. 
 
¶8.  (SBU) A Bhattacharjee departure would also be something of a 
victory for Kolkata's traditional business elite, the 
influential Marwari families, some of whom (the Goenkas, 
Budhias, and Neotias), manage large scale economic operations in 
¶W. Bengal.  Many Marwaris enjoyed a cozy relationship with 
former CM Jyoti Basu.  Harsh Neotia, for example, was granted 
free land concessions to assist its real estate development 
projects by the pre-Bhattacharjee administration, resulting in 
encroachment on environmentally-sensitive areas, shoddy 
construction, and reportedly high levels of graft. The Marwaris' 
track record in the last 30 years points to a pattern of crony 
capitalism and industrial mismanagement at the expense of 
economic development.  In addition, Marwari business leaders, 
while outwardly claiming openness to economic liberalization, 
often behind-the-scenes undermine proposals for greater economic 
reforms.  For example, Marwaris opposed foreign direct 
investment in retail, which they viewed as inimical to their 
business interests. 
 
¶9.  (SBU) During his rise to the Chief Minister post in 2000, 
Bhattacharjee distanced his administration from some of these 
influential Marwari businessmen.  Instead, he sought to 
cultivate more Bengali business interests such as bringing in 
Indonesian-based Bengali businessman Prasun Mukherjee to 
facilitate the investment of Indonesian company Salim Group in 
the Nandigram SEZ. 
 
------------------ 
The Word From Delhi 
------------------ 
 
¶10.  (SBU) Harish Khare is the influential editor of "The 
Hindu," and is closely linked to the CPM leadership in Delhi. 
He told Poloff that there is no break between Kolkata and Delhi 
on economic policy, deriding the post- Nandigram speculation as 
"political theater" staged by the CPM.  Khare pointed out that 
as a cadre-based party, all major decisions are approved by the 
Delhi leaders.  Khare insisted that Bhattacharjee won prior 
approval for his investment policy using the argument that the 
GOWB needed capital to attract investment that would otherwise 
go to other states.  Khare assured Poloff that the CPM had no 
intention of making Bhattacharjee the "fall guy" for failed 
economic policies, but would rather "go back to the drawing 
board," and try to "learn from its mistakes."  In Khare's 
assessment, the Nandigram will result in a "course correction," 
 
KOLKATA 00000104  003 OF 003 
 
 
but was viewed as a "tactical mistake," rather than strategic 
and will not cause the CPM to backtrack. 
 
¶11.  (SBU) "Hard News" Editor Sanjay Kapoor emphasized that 
Nandigram was a huge public relations blow to the CPM.  He and 
Khare agreed that many female protestors had been raped by 
police, and that the CPM had hired professional criminals to 
drive protesters from the site.  This, emphasized Kapoor, had 
caused a "crisis" for the CPM, by exposing its authoritarian 
face.  The weakened party will now become increasingly 
introspective, he predicted, and would be less capable of 
opposing the UPA on the nuclear deal and other foreign policy 
issues. 
 
------- 
Comment 
------- 
 
¶12.  (SBU) While the Left has been diverted by Nandigram 
developments, which have resulted in some internecine conflict 
between nascent CPM factions and the CPM and other Left parties, 
it is unlikely to have much effect on the CPM's contentious 
relations with Congress in New Delhi.  The Delhi-based CPM 
leaders have already indicated that they remain as ready as ever 
to oppose "globalization" as propounded by Chidambaram, Manmohan 
Singh and the "neoliberal" camp within Congress.  This is 
partially the result of fortuitous circumstances.  The CPM is 
well-aware that Congress has been wounded by recent electoral 
defeats and is facing tough electoral contests against a 
resurgent BJP in Uttar Pradesh and other upcoming state 
elections and is itself too distracted to do battle on economic 
and foreign policy issues. 
 
¶13.  (SBU) The survival or fall of W. Bengal's embattled Chief 
Minister will not be determined by external factors, but rather 
by internal Left dynamics.  In the confrontation over economic 
reform, those wanting a return to earlier certainties and cozy 
business relationships would be happy to see him go.  However, 
Bhattacharjee's situation is linked to the state's economic 
performance.  After Nandigram, business projects have been put 
on hold, land costs are escalating and businesses hesitating to 
make additional investments in the state.  To reduce his profile 
and discourage further violence, Bhattacharjee may keep business 
projects out of the public eye.  Bhattacharjee's post-Nandigram 
weakness is allowing the CPM old guard and its business supports 
to regain their voice.  Although CPM hardliners hope the Left 
tail will wag the UPA dog at the center on crucial issues of 
economic policy, the party may be less assertive until it 
recovers from the shock of Nandigram and resolves internal 
issues. 
JARDINE