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UNCLAS SECTION 01 OF 04 NEW DELHI 001163 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PTER PREL PINR KDEM IN
SUBJECT: NEW GOVERNMENT'S AGENDA: FANFARE FOR THE COMMON MAN 
 
¶1.  (SBU) Summary: Indian President Pratibha Patil's address 
to a joint session of Parliament on June 4 outlined the 
achievements of the previous United Progressive Alliance 
(UPA) government and charted a road map for the next five 
years.  It was largely in-line with the Congress Party's 
election manifesto in reinforcing the themes of security, 
dignity and prosperity.  Patil laid out a range of UPA 
programs - such as food guarantees and public 
healthcare/educational investment - that have helped to lift 
up low and moderate income voters who form the bulk of the 
population.  In doing so, the Congress is sticking with the 
"aam admi" (common man) approach that, according to 
conventional wisdom, helped to sweep the party to victory in 
two consecutive national elections.  The President also paid 
close attention to improved governance, which has been echoed 
publicly by government officials as a key priority for the 
UPA. 
 
¶2.  (SBU) Summary (continued): In reaffirming the UPA 
government's commitment to strengthening ties with the major 
international powers, Patil singled out the United States and 
the transformed relationship.  Amid heightened tensions in 
the India-Pakistan relationship, Patil indicated India would 
be open to "reshaping" its relations with Islamabad if the 
GoP took credible action to dismantle the terrorist 
infrastructure.  End Summary. 
 
No Discretion 
--- 
 
¶3.  (SBU) President Pratibha Patil's June 4 address is the 
highlight of the short parliamentary session, which runs from 
June 1-9.  Indian Presidents have no discretion on the 
content of Presidential addresses to Parliament, which under 
the Constitution are written by the incumbent government and 
are used to lay out its goals and policies.  Accordingly, 
Patil's address outlined the broad agenda and goals of the 
UPA government for its second term in office.  Her remarks 
were reportedly heavily worked on by Prime Minister Manmohan 
Singh himself.  The President's address will be followed by a 
"motion of thanks," where the priorities and policies 
outlined by the President are debated in the separate houses 
of Parliament. 
 
Focus on "Inclusive" Growth 
--- 
 
¶4.  (U) While the speech was a laundry list that included an 
effort or initiative to target every sector and interest 
group, it was clear that the focus was on the schemes 
intended to benefit low income rural voters.  She viewed the 
election results as a "vindication of the policy architecture 
of inclusion" that the UPA pursued in its last term.  Over 
the last five years, the UPA has implemented social and 
infrastructure programs targeting rural India.  As such, she 
called for job reservations for women and a host of programs 
for ethnic minorities and lower caste groups.  Specifically, 
she noted that the National Rural Employment Guarantee 
(NREGA) Program would be expanded. 
 
¶5.  (U) Although she was not forthcoming with details, it is 
likely the government will look to implement its promise in 
the Congress Manifesto that would increase eligible 
participation in NREGA to all members of a rural household, 
not just one job per household.  There has also been talk of 
introducing the program to urban areas, but the low minimum 
wage and nature of work would likely find less demand in the 
cities.  The President also promised a second Bharat Nirman, 
a rural infrastructure program started in 2004 which targeted 
100 percent rural elctrification, vast increase in rural 
roads, more rural housing, improved water systems and 
expanded rural telephony, but only partially met its targets. 
 
¶6.  (SBU) The speech also carried a heightened focus on food 
security, noting plans to enact a new National Food Security 
Act, which would enshrine in law a right for the poorest to 
 
NEW DELHI 00001163  002 OF 004 
 
 
affordable food, a move seen as similar to the right to work 
given by the NREGA Act.  In line with the election manifesto, 
Patil pledged that every family below the poverty line would 
be entitled to 25 kilograms or wheat or rice per month at Rs. 
3 per kilogram, which could raise the USD 9.2 billion food 
subsidy bill closer to USD 10 billion.  Health and education 
are the other key social sectors where the UPA is aiming to 
significantly expand service delivery to the large numbers 
currently left out of such public assistance, especially in 
the rural sectors. 
 
No Program Left Behind 
--- 
 
¶7.  (U) Patil covered all the bases with her laundry list of 
priorities: 
 
-- Security: Maintaining internal security and preserving of 
communal harmony; 
-- Economic Growth: Expanding economic growth in agriculture, 
manufacturing and services sectors; 
-- Education/Employment Infrastructure: Consolidating 
government programs for education, employment, health, rural 
infrastructure and urban renewal; new flagship programs for 
food security and vocational skill development; 
-- Welfare: Addressing urgent social welfare issues of women, 
youth, children, other backward classes, scheduled castes, 
scheduled tribes, minorities, handicapped persons and senior 
citizens; 
-- Good Governance: Adopting governance reform; 
-- Energy/Environment: Ensuring energy security and 
environmental protection; 
-- External Affairs: Engaging with the rest of the 
international community; and 
-- Entrepreneurship: Promoting a culture of enterprise and 
innovation. 
 
U.S.-India Relationship a Priority 
--- 
 
¶8.  (SBU) Patil reaffirmed the Singh government's commitment 
to deepening the U.S.-India bilateral relationship.  "The 
momentum of improvement of our relations with the major 
powers will be maintained.  The transformation of our 
partnership with the United States of America will be taken 
forward," Patil stated.  She underlined the challenges ahead 
in pursuing India's "non-aligned" interests while 
strengthening strategic relations with global powers. 
Besides consolidating existing partnerships with the U.S., 
Russia, China, Japan and the E.U., Patil indicated the GOI 
would expand relations in Africa, West Asia and Latin 
America. 
 
Strengthened Regional Ties 
--- 
 
¶9.  (SBU) On Pakistan, Patil added that India would be ready 
to "reshape" its relationship with Islamabad if the GoP took 
credible action to dismantle the terrorist infrastructure, 
which has been a stumbling block to resuming the Composite 
Dialogue with Pakistan.  In the only line that drew sustained 
applause across the political spectrum, Patil pledged to work 
closely with the Government of Sri Lanka to provide relief to 
those affected by the conflict: "We will support initiatives 
in Sri Lanka, which can lead to a permanent political 
solution of the conflict there and ensure that Sri Lankans, 
particularly Tamils, feel secure and enjoy equal rights so 
they can lead a life of dignity and self-respect."  The GOI, 
she added, has a vital interest in working along side SAARC 
member nations to promote stability, development and 
prosperity in the region.  "The government will sincerely 
work with our neighbors to ensure that outstanding issues are 
addressed and the full potential of our region is realized," 
Patil explained. 
 
Reviving Economic Growth 
 
NEW DELHI 00001163  003 OF 004 
 
 
--- 
 
¶10.  (SBU) In order for the UPA to implement development 
promises, Patil said that it was critical to significantly 
increase GOI revenue by implementing reform measures that 
return India to the 8-9 percent annual growth rates that 
preceded the global economic crisis.  The President 
identified a return to rapid economic growth as a high 
priority for the government, signaling several areas of 
market reform and liberalization that could accelerate 
economic growth.  Avoiding specifics, she noted a need to 
increase resources in the banking and insurance sectors, 
which for banks should mean increased equity shares to the 
public, and for insurance, signals an intent to raise the cap 
on foreign direct investment (FDI) in the sector from 26-49 
percent.  Patil gave a nod to the "positive effect" of FDI 
and the need to encourage more flows.  Once again reflecting 
the Congress Manifesto, she asserted the government will 
prepare a roadmap for selling minority shares in state-owned 
companies, which would modestly boost government revenues by 
USD 5-6 billion.  The President further pledged that the move 
to a national Goods and Service Tax (GST) - tentatively 
planned for April 2010 - would be "vigorously pursued."  The 
government will also need these revenue-boosting reforms if 
it pursues another fiscal stimulus package in the upcoming 
budget.  Patil suggested another stimulus might be coming, 
focused on still-suffering exporters and small companies. 
 
Primary Education for All 
--- 
 
¶11.  (U) Patil touted the success of the programs promoting 
universal primary education and declared her government's 
intention to put forward a bill in the Parliament that makes 
free and compulsory education a right.  The new UPA 
administration is focused on making "massive investment" in 
education and institutionalizing national skill development 
with a goal of adding 500 million skilled workers by 2022. 
 
Women's Reservation Bill Gets Traction 
--- 
 
¶12.  (SBU) Patil also touched upon the impending Women's 
Reservation Bill.  This bill will reserve one third of the 
total seats in Parliament and State Assemblies for women, as 
well as reserve 50 percent of all seats in local government 
bodies in both rural and urban governing bodies for women. 
She also outlined the UPA's government's goal to increase 
representation of women in central government jobs to 
alleviate the "multiple degradations of class, caste and 
gender" by supporting their engagement in the public sphere. 
 
Improved Governance, Election Takeaway 
--- 
 
¶13.  (SBU) A consistent theme throughout the President's 
address is the government's aim to improve governance, 
through more effective and efficient delivery of program 
services to the intended beneficiaries.  A number of newly 
assigned ministers have struck this theme in recent days and 
President Patil emphasized its importance in her speech to 
Parliament.  For example, she noted that bottlenecks and 
delays in implementation of infrastructure projects must be 
removed, in order to meet rural infrastructure project 
targets.  Patil also pledged "systemic reform" in the public 
distribution system (PDS) as part of the government's move to 
increased food security.  The PDS is often criticized for 
weak delivery and massive "leakages."  Other governance 
improvements include the introduction of a pan-India identity 
card, through which the myriad existing government benefits 
could be delivered more efficiently.  Finally, the President 
suggested the government will create a monitoring cell to 
track ministries' performance, require social auditing of 
NREGA, which has improved government administration in states 
like Rajasthan, and issue yearly progress reports in the 
social sectors. 
 
NEW DELHI 00001163  004 OF 004 
 
 
 
Comment:  Striking a Balance on Reforms 
--- 
 
¶14.  (SBU) President Patil's address suggested that the 
government is likely to follow a balanced approach to 
reforms.  The Congress-led coalition won an unexpectedly 
strong victory in the national elections last month, which 
has raised expectations that it will push ahead with reforms 
and sales of state assets.  However, the government has not 
lost sight of its main elections plank of "inclusive growth." 
 The UPA remains focused on the aam admi - through rural 
employment, free housing and food security - and will likely 
move forward with selective economic reforms to balance 
interests of their rural constituents.  With a combined 
fiscal deficit approaching eleven percent of GDP, however, 
the government will be hard-pressed to increase spending 
without reforms to boost revenues. 
 
Comment:  Governance, a new electoral trend? 
--- 
 
¶15. (SBU) We will watch carefully whether President Patil's 
constant reference to improved governance is mere rhetoric or 
if it reflects a determined effort on the part of government 
to improve its own efficiency and effectiveness.  There is 
some evidence that it may be the latter.  Planning Commission 
Deputy Chairman Montek Singh Ahluwalia has reportedly ordered 
a study on how India can streamline and consolidate the 
dozens of ineffective and often untapped government benefits 
offered to the most vulnerable, and possibly substitute cash 
transfers for health, education and income support.  End 
Comment. 
BURLEIGH