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RUEIDN/DNI WASHINGTON DC
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UNCLAS SECTION 01 OF 03 NEW DELHI 001749 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PTER PREL PINR KDEM IN
SUBJECT: UPA 2.0: SLOW AND STEADY 
 
REF: A. NEW DELHI 1620 
     ¶B. NEW DELHI 1401 
     ¶C. NEW DELHI 1319 
     ¶D. NEW DELHI 1285 
     ¶E. NEW DELHI 1278 
     ¶F. NEW DELHI 1226 
     ¶G. NEW DELHI 1163 
     ¶H. NEW DELHI 1030 
     ¶I. MUMBAI 328 
 
¶1. (SBU) SUMMARY:  The newly constituted Indian parliament 
concluded its first post-election session on August 7 after 
approving the annual national budget and passing important 
legislation on education while shelving several other 
pressing matters.  The budget session was a mild 
disappointment for theQivate sector, which had hoped that 
an UPA unencumbered by troublesome allies and holding a 
comfortable majority would tackle economic reforms.  The 
fireworks were on full display in parliament, but not over 
the budget, as was expected, or over economic or social 
sector reform, as was hoped for.  The real battles took place 
over two foreign policy initiatives: resumption of the 
India-Pakistan bilateral dialogue that had become a casualty 
of the Mumbai terror attacks; and U.S.-India agreement on End 
Use Monitoring (EUM) language.  The Bharatiya Janata Party 
(BJP) led the charge and was joined by other opposition 
parties.  The BJP surprised everyone, including itself, with 
its tough performance in parliament.  It heartened dejected 
BJP-ers who had suffered a season of public anguish and 
bitter internal dissent following their trouncing in the 2009 
general elections.  END SUMMARY. 
 
 
The Budget Session:  Busting The Private Sector's Great 
Expectations 
---- 
 
¶2. (U) Barely acknowledging the private sector,s economic 
reform priorities, the first post-election session of the 
Indian Parliament passed a pragmatic budget (Ref I).  Indian 
industry reaction was one of disappointment due to the 
budget's failure to lay out a reform roadmap (Ref B).  The 
budget did not ease regulation impeding the inflow of foreign 
investment or quicken the pace of privatization of 
state-owned enterprises.  These reforms have eluded Prime 
Minister Singh and his economic team for the past five years; 
this budget session was no exception (Ref I).  Some economic 
reform bills, such as the Insurance Act and Pension Act, 
which lapsed with the dissolution of the 14th Lok Sabha and 
the election of a new Parliament, were simply not 
reintroduced during the session.  On discretionary spending, 
the government focused predominantly on increasing funding 
for the its signature National Rural Employment Guarantee 
scheme (Ref D) and rural and urban infrastructure.  Finance 
Minister Pranab Mukherjee targeted long-term growth and 
productivity increases through investment in better roads, 
electricity, and housing. 
 
Sharm-el-Sheikh" Overshadows All 
---- 
 
¶3. (U) Besides the budget, the UPA introduced 14 bills in 
parliament; eight of them passed both houses, and became law 
-- a moderately successful parliamentary session in today's 
cautious Indian legislative environment.  The most important 
measure that made it out of parliament was the Right of 
Children to Free and Compulsory Education Bill, which 
proposes a combination of central and state funding to 
provide education in neighborhood schools to all Indian 
children between the ages of six and fourteen. 
 
 
¶4. (U) Public and media attention, however, focused less on 
such domestic legislation and more on two foreign policy 
issues -- the Prime Minister,s July 16 joint statement with 
Pakistani Premier Gilani (Ref A) and an agreement on EUM 
 
NEW DELHI 00001749  002 OF 003 
 
 
language reached during Secretary Clinton's visit in July. 
Parliamentary debate centered on agreeing to anything with 
Pakistan after its inadequate response to the Mumbai 
terrorist attacks.  The fiercest criticism was reserved for a 
reference in the document that appeared to acknowledge Indian 
meddling in Baluchistan (Ref A).  The opposition accused the 
Prime Minister of acting unilaterally on foreign policy 
issues and orchestrating a "complete turnaround" on relations 
with Pakistan (See paragraph 6).  The BJP characterized the 
agreement on EUM as a sellout of sovereignty. 
 
¶5.  (U) Parliament extended a constitutional amendment 
allowing caste-based affirmative action programs benefitting 
Scheduled Castes and Scheduled Tribes until 2020, as well as 
appropriation bills for the national railway network and the 
New Delhi Metro.  The Workmen,s Compensation Bill and the 
National Commission for Minority Educational Institutions Act 
failed to make it through parliament and become law. 
 
 
BJP:  Still Ferocious 
---- 
 
¶6. (U) Despite grave internal troubles and brewing succession 
battles (Ref E), the BJP pulled together a solid, united 
performance in parliament.  After sustained media criticism 
of the BJP as a feeble and ineffectual opposition, the BJP 
parliamentary gladiators systematically attacked the GoI,s 
foreign policy initiatives.  The BJP smelled blood at 
internal dissension within the Congress on Sharm-el-Sheikh 
and went on the offensive.  Blasting the government for 
giving away too much in negotiations with Pakistan, the BJP 
supplemented its attacks with protests and walk-outs, a 
tactic used often for dramatic effect in Indian legislatures. 
 Former Foreign Minister Yashwant Sinha said that the Prime 
Minister had joined "the Pakistan camp in Egypt" and poked at 
the Congress party's public reluctance to support the Prime 
Minister. Deputy Opposition Leader Sushma Swaraj accused the 
current government of compromising India,s sovereignty by 
agreeing to EUM.  Marketing themselves as the sole purveyors 
of strong foreign policy, the BJP attacked the UPA undeterred 
by the fact that prior BJP-led governments had worked with 
the U.S. and Pakistan on similar foreign policy initiatives. 
 
 
P.M. Singh: Getting Ahead of His Party... 
---- 
 
¶7. (SBU) A Congress parliamentarian privately complained to 
PolOff that Prime Minister Singh had gotten ahead of his 
party members on the Sharm-el-Sheikh joint statement.  It 
took the intervention of Congress Party chief Sonia Gandhi to 
quiet the rumblings of dissent within Congress that the PM 
may have given away too much with Pakistan.  Gandhi finally 
came out firmly behind the Prime Minister, sending an 
unmistakable signal to the party to muzzle any criticism of 
the Prime Minister and the joint statement.  Eventually, the 
Congress party and UPA allies cobbled together an image of 
unity, but the damage had been done. 
 
... Not Building Consensus. 
---- 
 
¶8. (SBU) Janata Dal (United) President Sharad Yadav did not 
parrot BJP,s aggressive attacks on the Prime Minister. 
Instead, he used more nuanced arguments, raising concerns in 
parliament about Singh,s "unilateralism" in a traditionally 
consensus driven foreign policy process.  He complained that 
the Congress-led UPA coalition was "not taking opposition 
leaders into confidence" (REF A), a charge echoed by the Left 
and by such notional Congress allies like Lalu Yadav, and 
Mulayam Singh Yadav. 
 
Slacker MP,s? 
---- 
 
 
NEW DELHI 00001749  003 OF 003 
 
 
¶9. (U) Allegations of absenteeism caused some damage to the 
Congress party in parliament this session and led Sonia 
Gandhi to urge her party members to attend all parliamentary 
debates.  During the Prime Minister,s address on 
Sharm-el-Sheikh, television cameras focused on the tightly 
packed opposition benches, and then panned to the loosely 
populated UPA section.  While Congress stalwarts and 
ministers filled the front seats, the back benches were 
thinly occupied. 
 
The Young Turks: Still a Honeymoon with the Media 
---- 
 
¶10. (U) The media romance with young parliamentarians 
continued during this budget session (Ref F).  National daily 
Indian Express tabulated every move of Parliament,s young 
new stars.  Their absences, speeches on the parliament floor, 
questions, tea breaks, entrances and exits all became photo 
opportunities and fodder for the Indian press. 
 
Female Empowerment: Did we say 100 days? 
---- 
 
¶11. (U)  As part of its 100-day action plan, the UPA 
government had promised to introduce a bill which would set 
aside half the slots in elected village councils (panchayats) 
and city municipalities for women.  The UPA government 
promised 100 percent literacy for women -- the current rate 
is about 54 percent -- in the next five years through the 
National Mission for Female Literacy.  Neither of these bills 
saw the light of day in this budget session, confirming the 
concerns of former UPA Minister of Women and Child 
Development Renuka Chowdhury,  who had predicted that 
Congress would be unable to push through a strong reformist 
agenda on women,s and children,s issues. 
 
Comment: BJP Bump; Consensus is King 
---- 
 
¶12. (SBU) In terms of legislation, this was a reasonably 
successful parliamentary session for the government.  It got 
its budget and passed important education and social sector 
legislation.  However, on pure political dynamics, the BJP 
outscored the Congress.  After a season of public 
finger-pointing and caustic internal dissent following its 
trouncing in the 2009 elections, BJP-ers were heartened by 
the party's unified and tough performance in parliament.  It 
helped build internal party confidence, but this may prove 
short-lived as controversy over BJP's poor showing in the 
elections and possible leadership changes continues.  The BJP 
drew blood when it came out swinging against the 
Sharm-el-Sheikh joint statement; but it may be disappointed 
if it believes the tough-on-terrorism stance will give it 
traction in the upcoming state assembly polls in Maharashtra 
or Haryana.  The national elections demonstrated that concern 
over terrorism is a minor factor, if any, even in places 
hardest hit by terrorist attacks.  That more controversial 
pieces of legislation dealing with women,s rights and 
economic reform did not surface, despite the UPA's ambitious 
hundred day agenda and its comfortable majority in 
parliament, demonstrates the risk-averse nature of Indian 
politics.  END COMMENT 
ROEMER