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Congress leaders had been reluctant to push forward the civilian nuclear cooperation deal with the United States in the face of staunch opposition from their Left allies, who had threatened to bring down the coalition over the issue.
US officials warned this month that time was fast running out for the deal, which would end decades of nuclear isolation for India and allow it to access international nuclear fuel and equipment.
Many analysts had all but written the agreement off.
But Finance Minister Palaniappan Chidambaram upset those calculations on Friday with a budget aimed squarely at elections and rural poor, with a $15 billion scheme to waive loans held by 40 million small farmers.
Elections have to be held by May 2009, but Congress now has less to fear from an earlier vote, analysts say, meaning its leader Sonia Gandhi might just call the Left's bluff over the nuclear deal.
"It's a pre-election budget, a budget with an eye for early elections, but whether or not they will go for it I don't know," said Mahesh Rangarajan, a political analyst and history professor at Delhi University.
"Sonia Gandhi has to make the decision."
Indian newspapers reported on Friday that the government was close to concluding a nuclear safeguards agreement with the International Atomic Energy Agency in Vienna, a crucial step in tortuous negotiations over the agreement.
The deal would also need to be ratified by the 45-nation Nuclear Suppliers Group and go back to the US Congress for final approval, in good time before America's own elections in November.
Supporters of the deal like nuclear expert R.R. Subramanian were in good spirits.
"This is nothing short of an election budget," he said.
"They have virtually said goodbye to the left. The nuclear deal will be done by July and elections will be in October. This budget clearly indicates the deal has been saved."
But others said a lot still needed to be done on the nuclear deal in a short space of time.
"It's 5 to 12 as far as many people are concerned," said one Western diplomat, ‘but I think it could go through’.
"They may have left it too late, but there is obviously one last bid to push it through," said political analyst and columnist Prem Shankar Jha.
EARLY ELECTIONS?
Jha said the Leftists would be reluctant to side with the BJP and bring the government down if the deal went ahead, but others disagreed.
"I think the Left will certainly do everything in their power to prevent the nuclear deal from going through," said Jayati Ghosh, a Left-leaning political analyst. "They will definitely pull down the government then."
There are other reasons to think early elections, perhaps around October, are a distinct possibility, analysts said. The economy's breakneck pace of growth is already easing and a global slowdown could spell more trouble ahead.
A National Pay Commission is expected to recommend significant pay rises for three million government workers in a report due by end March, pay rises Chidambaram made no budgetary provision for but indicated he would support.
"I am confident the report will meet the legitimate expectations of government employees," he said.
It will be tempting to cash in at the polls, and let the next government worry about balancing the books, analysts said.
Rangarajan said Sonia Gandhi looked weak when she appeared to buckle under Left pressure in 2007 over the nuclear deal, and could restore some political credibility by pushing it forward now.
But he and other analysts said Congress could still face a tough time at the polls, whenever they are called.
The loan waiver will not cover tens of millions of farmers in debt to private money lenders, many paying extortionate rates of interest, while the economic boom is still bypassing hundreds of millions of poor people.
Congress also has formidable organisational and leadership problems and has lost several state elections to a resurgent Opposition in recent months.
"I still have great suspicion that Congress is heading for a very difficult election," Rangarajan said.
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RatingThe GOI did not release the Phukan Commission report on the Tehelka Tapes because it unearths the skeletons of Prime Minister Manmohan Singh and Agriculture Minister Sharad Pawar in a massive Sukhoi aircraft purchase scandal. Read some of the articles on Manmohan Singh in the website Scribed.com , the articles as below. HOW TWO CIA AGENTS MANMOHAN AND SONIA ARE SELLING INDIAN NUCLEAR DEPARTMENT, CORRUPTION AT THE HIGHEST LEVEL, MANMOHAN A CIA ISI PLANT ON INDIA, HOW MANMOHAN SINGH WAS THE ISI CIA CONTACT IN INDIA., MANMOHAN SINGH AND SONIA GANDHI ARE AGENTS OF USA. MANMOHAN’S DUBIOUS PAST, MANMOHAN WAS TAKEN IN TO CONGRESS PARTY ON CIA ORDERS AS CONGRESS WAS ON THE PAY ROLL OF NOT ONLY KGB BUT FROM CIA AND ISI, COLLAPSE OF BCCI AND HOW MANMOHAN SINGH WAS THE ISI CIA CONTACT IN INDIA, BCCI THE DIRTIEST BANK OFALL – TIME COVER STORY, MANMOHAN A CIA ISI PLANT ON INDIA, COLLAPSE OF BCCI AND HOW MANMOHAN SINGH WAS THE ISI CIA CONTACT IN INDIA, HOW COME AN ORDINARY RBI GOVERNOR WITH NO COMMUNICATION SKILLS WAS TAKEN IN TO CONGRESS PARTY, Bank of Credit and Commerce International Accusations in India August 14, 1991 NEWYORK TIMES
It is going to be difficult for the Congress Party if elections are held earlier or as scheduled. Probably, it will become more difficult later, because they have to continue only with the left party support who are against any reforms and Nuclear Deal as well.They should boldly go ahead with the Nuclear Deal, just as they have presented a bold budget. They should concentrate on efficient usage of funds so that they reach targetted people. They should not fall into the trap of ad campaigns of the type "India Shining", without ground work. Today's India is more result-oriented. India will side with an efficient political party.
This is a most dangerous budget- its comical to see Chidambaram, one of the most articulate face of COngress becoming like Devi Lal. I agree with Mahesh Rangarajan, that Congress is going to face a very difficult election.
Actually the Congress party ,the servant of the USA,is following the diktats of the latter,because of INTIMIDATION,and perhaps huge "BAKSHISH",offer,by Uncle Sam. The Congress Party has made India Inc its enemy,as well as the investors.There are many subtle anti-national items in the Budget,the discerning Undian Citizens easily find out. Actually the Congress party will meet its WATERLOO,in the coming national Elections being routed soundly and thoroughly.
Sonia gandhi will have to call an election by Oct08,otherwise people will forget all the goodies in the budgetand get into new problems
Indians are discerning and intelligent.I am sure they will not allow Machiavellian methods to cloud their Judgement. The dangerous DEAd and ABORTED deal will certainly be buried.
“A nation without a vision perishes. It is the quality of the vision, and the hope it gives, that will eventually help India navigate its way through treacherous waters. Political parties exist to provide such a comprehensive vision”, writes Bhikhu Parekh (a Labour member of the House of Lords and professor of political philosophy at the University of Westminster) in IE. If the ‘vision’ of the UPA is to fetter India in perpetual dependence to foreign powers under one pretext or the other, as these reports indicate, even God may not be able to save India. Very sad, indeed.
CONGRESS HAS CREATED A HISTORY BY ALLOCATING FUNDS IN THE BUDGET IN THE NAME OF SO CALLED MINORITY.THIS WAS EXPECTED FROM A PARTY WHOSE HEART BLEEDS FOR MINORITY.DOES SUCH DIVISION MAKES INDIA STRONG OR BETTER?NO WONDER POLICE IN SRINAGAR ENJOYS DINNER TOGETHER WITH TERRORISTS AFTER THEY ARE CAUGHT!BUDGET DOESNOT HAVE MUCH FOR INFRASTRUCTURE.IF NATION HAS NEARLY 80% POPULATION EARNING LESS THAN RS800 PER MONTH,WHAT ABOUT THEM.WELL GOD SAVE THE NATION!
I am anti Congress, but if it realy does as stated in the article - it goes ahead with nuclear deal - then it is political master stroke of Sonia Gandhi. And it has not much to lose as election would be held even otherwise before middle of next year so having election in October reduces only six months. But it would be better to go to electorate as decisive strong party then as indecisive, weak and being dictated by others (commies) party.
THIS BUDGET IS VERY GOOD BUDGET NO DOUBT BUT YET TO BE AAM ADMI BUDGET IN TURE SENSE AS POOREST OF THE POORS ARE YET TO BE TAKEN BY THIS BUDGET.BUT IT DOESNOT PROMOT SUPPORT TO GO FOR NUCLEAR THROUGH. IT WILL BE GREAT MISTAKE FOR CONGRESS GO FOR N-DEAL THROUGH AS IT IS, IT SEEMS.
Mr. lame duck PM, Chidu has done his job as per your and sonia's dictat, finally Communists have been able to literally run the govt. every time congress tried to get on its feet. but it is nothing short of giving communists what they want to hear and you've started dancing to their tunes. Let see how much you can extract from your Red czar in foreign policy, bastrads communists have are yet to endorse your program for arunachal openly, at least karat brother
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