Monday, March 7, 2011

Left rules out returning to DMK fold


Chennai, March 7 : Their main enemy may be the Congress, but Left parties have no intention of returning to the fold of Tamil Nadu's ruling DMK, with which they parted ways in 2009.

Leaders of the Communist Party of India (CPI) and the Communist Party of India-Marxist (CPI-M) said they were committed to signing seat sharing deals with the AIADMK for the April 13 assembly elections.

A CPI-M leader told: "It is a big 'no' to (joining hands with) the DMK front. Such a possibility does not exist."

A CPI leader added: "Such a possibility does not arise. The DMK was party to the anti-people decisions of the central government."

Speculation of a possible deal arose after the DMK Saturday dramatically pulled out of the Manmohan Singh government. The DMK has 18 members in the Lok Sabha and six in the central government.

On Sunday night, DMK president and Chief Minister M. Karunanidhi said the possibilities of other parties joining the DMK front would be known in a day or two.

In 2006, as a part of the DMK front, the CPI-M and CPI won nine and six seats respectively. In 2009 the Left parted ways with the DMK after taking back legislative support to the Manmohan Singh government.

What now after DMK quits coalition?


M. Karunanidhi, president of DMK (Dravida Munetra Kazhagam) party, speaks a...
A key ally of the government, the regional Dravida Munnetra Kazagham (DMK) party, is quitting the ruling Congress Party-led coalition over a disagreement over parliamentary seats in its state election.

The move comes as Prime Minister Manmohan Singh battles a series of corruption scandals and high inflation that have dented his popularity and emboldened the opposition.

What could happen next?

GOVERNMENT FALLS - Unlikely

The DMK from Tamil Nadu has 18 seats, giving the ruling Congress party a parliamentary majority. The first key test will be the 2011/12 budget vote this month. If the vote is lost, the government will fall and early elections will be held.

But it is in no one's interest for early elections. The DMK faces a tough state election in April that it could lose. An early general election could see it lose power both at the federal and state levels. The main opposition Bharitya Janata Party (BJP) is also not ready for a general election.

The DMK will most likely vote with the government on the budget and other major votes.
If the government falls, traders expect bonds to see a sell-off of around 10 basis points, according to traders, and a sell-off in the stock market.

GOVERNMENT SURVIVES, IF WEAKENED - Most likely

If the budget bill is passed, Congress would then have breathing space until the next parliamentary "monsoon" session, probably in July or August.

Indian governments cannot fall outside parliamentary sessions unless the prime minister resigns, so that would give Congress some breathing room to tie up its parliamentary support with other regional parties.

That could see Congress reaching out to other possible coalition allies, including the Samajwadi Party or the BSP in Uttar Pradesh, both of which have more seats than the DMK.

That would make Congress dependent on some notoriously fickle partners and make passing of any reform bills more difficult. The SP has proved its loyalty to Congress in the past, supporting it in a confidence vote in its first term, but its leaders have also been tainted by corruption charges.

There will be little impact on the bond market in this scenario, but the issue has already put pressure the Sensex and the rupee, contributing to wider problems of the government that are already impacting on markets.
"This issue will be like fuel to the fire, so markets are reacting negatively," said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank. "Oil is also on the rise, which is adding to the pressure."

GOVERNMENT SURVIVES, STRENGTHENED - Possible.

There are signs that this may be part of a grand design of Congress to dump a regional ally that has been at the centre of corruption scandals involving the issue of 2G telecoms licences, a scam that may have cost the government up to $39 billion.

There are members of Congress, including family scion Rahul Gandhi, that would like Congress to become less dependent on fickle regional allies.

By dumping DMK, Congress could signal it is no longer willing to deal with corruption-tainted parties. The former telecoms minister, A. Raja, a DMK leader, is under arrest in a massive telecoms corruption case. Congress could ally itself with the main opposition party in Tamil Nadu, the AIADMK, which may do well in the state election.

Congress also hopes to do well in state elections in West Bengal and Kerala this year, while the DMK may lose the Tamil Nadu election in May. If that pans out, Congress may regain political momentum.

DMK BLINKS - Possible

The DMK's tactic of playing brinksmanship with Congress over seat sharing may have backfired - Congress does not appear too upset by the prospect of losing an ally that has supported it since 2004. With the DMK facing a possible loss in the April state election, withdrawal from the ruling coalition could put it out in the political cold.

Little impact on markets, with a return to the status quo of a politically weak government.

DMK Ministers leave for Delhi, to quit UPA Government


Chennai, Mar 7 : DMK Union Ministers left for New Delhi this morning to submit their resignation letters after the party's high-level action committee decided to pull out from the Congress-led UPA Government at the Centre and sever ties with the Congress.

Union Ministers M K Azhagiri, Dayananidhi Maran, S Jagathratchagan and D Napoleon left for Delhi by IC 404 flight to meet PrimeMinister Manmohan Singh around 1100 hrs and submit their papers.

In a brief talk with newspersons, Mr Azhagiri said as per the decision taken by the party’s high-level committee, ''We are resigning from the Cabinet.

''It is for the party high command to decide,'' he said when asked whether the DMK would reconsider its decision and take back the Congress if it wished to come back and rejoin the DMK-led alliance for the April 13 Assembly elections.

He replied in the negative when asked whether any Congress leader got in touch with the DMK after the party took the decision to snap ties and pull out from the UPA Government at the Centre.

Ministers to resign Monday, no contact from Congress: DMK


Chennai, March 6  A day after announcing the DMK was pulling out of the United Progressive Alliance (UPA) government, Tamil Nadu Chief Minister and party chief M. Karunanidhi Sunday said nobody from the Congress had contacted him to resolve the deadlock in the seat-sharing talks for next month's assembly elections. The six DMK ministers in the UPA government will submit their resignations Monday.

Replying in the negative to queries whether the Congress had made any approach to his party on resolving the issue, Karunanidhi said it will be known in a day or two which other parties would join the DMK-led front for the April 13 elections to the 234-member assembly.

He said Congress' demand of 63 seats of its choice was one of the reasons for the DMK exiting from the UPA.

Speaking to reporters here, Karunanidhi's son and Chemicals and Fertilisers Minister M.K. Alagiri said the DMK does not expect the Congress to approach it for patching up the relationship.

According to him, the break-up with the Congress will not affect his party's poll prospects.

The DMK Sunday said its six ministers will submit their resignations Monday. Senior DMK leader and former union minister T.R. Baalu told reporters that the ministers will tender their resignations to Prime Minister Manmohan Singh.

The DMK has two cabinet ministers - Alagiri and Minister for Textiles Dayanidhi Maran - and four junior ministers - S.S. Palanimanickam (Finance), S. Jagathrakshakan (Information and Broadcasting), D. Napoleon (Social Justice and Empowerment) and S. Gandhiselvan (Health and Family Welfare) - in the UPA government.

The DMK Saturday pulled out of the UPA government after failure to reach a seat-sharing pact with the Congress for the assembly polls.

A DMK statement said that it will now give 'issue-based support' to the UPA government. The DMK has 18 Lok Sabha MPs.

Baalu also said that the Congress has not approached the DMK after the latter's decision to withdraw unconditional support.

Meanwhile, PMK president G.K. Mani said Sunday that Congress' absence will not affect the poll prospects of the DMK-led front.

On Sunday, PMK submitted a list of constituencies that it would like to contest. The party will contest from 31 constituencies as part of the DMK-led front.

Jaya issues legal notices to media


Chennai: AIADMK chief J. Jayalalithaa today issued legal notices to three media organisations, including the DMK backed 'Kalaignar TV', for carrying 'frivolous' reports linking her to Pune-based businessman Hassan Ali Khan, accused of stashing black money abroad.
In the notice issued through her counsel P.H. Manoj Pandiyan to 'Mid-day', 'Murasoli TV', besides 'Kalaignar TV', Jayalalithaa demanded an unconditional apology from the three media organisations.
She said she will take legal action if they failed to respond to her notice.