The Indian Economy - Page 27

Chairman of the U.S. Joint Chiefs of Staff Admiral Mike Mullen (L) speaks as Richard Holbrooke, special U.S. envoy to Afghanistan and Pakistan, watches during a news conference in New Delhi.

We can't settle issues like Afghanistan and many other issues without India's full involvement, Richard Holbrooke, U.S. Special Representative to Afghanistan and Pakistan, told a press conference during an official visit here. India is a vital leader in the region, added Adm. Mike Mullen, chairman of the U.S. joint chiefs of staff, who accompanied Mr. Holbrooke to New Delhi after they both visited Kabul and Islamabad. But their comments also served to highlight the extreme sensitivities the U.S. faces as it tries to pursue a cohesive diplomatic and military strategy that eradicates Islamist militancy in Pakistan and Afghanistan but doesn't heighten tensions between three countries whose shared history is rife with violence and mutual suspicion. Indeed, when U.S. policy makers initially considered including Kashmir the disputed Himalayan territory that is shared by India and Pakistan as part of the U.S.'s new regional policy, India balked. U.S. officials subsequently have taken discussion about Kashmir off the table, even though it remains a central flashpoint in tensions between India and Pakistan. Just this week, Indian troops and suspected militants have been fighting in Indian Kashmir; a gunbattle Tuesday left two from each side dead. Pakistani officials have complained that the U.S. needs to consider all conflicts in the region as it seeks to solve them. When asked if part of the reason for his Indian visit was to press for the resumption of talks between India and Pakistan over the future of Kashmir, Mr. Holbrooke said, We did not come here to ask the Indians to do anything. We did not come here with any requests. Rather, he said, for the first time since the partition of India in 1947, when the departing British split the country into India and Pakistan, Mr. Holbrooke said the U.S., India and Pakistan face a common threat and a common challenge and we have a common task in fighting terrorism and stabilizing Pakistan. U.S. officials view beating back a creeping insurgency in Pakistan as key to winning the war in neighboring Afghanistan. He also noted India's significant development projects and aid to Afghanistan and said better coordination between the U.S. and India in that country would bolster stability. There is impressive foreign assistance in Afghanistan by India, Mr. Holbrooke said. Simply by having a dialogue with your government, we realized both have the same priorities. Yet Indian influence in Afghanistan is another key source of tension with Pakistan, which views India's involvement there as part of a potential encirclement of Pakistan by India. U.S. officials last year said that Pakistan's Inter-Services Intelligence, the premier spy agency, played a role in the bombing of the Indian embassy in Kabul, which killed at least 41. Pakistan denied any involvement.

The Indian Economy:Rural India. This country's path out of the global economic turmoil may start at Dev Kuli village, Bihar, among a community of outcastes who dine on rats.In Bihar, India's poorest and least literate major state, the Mushahar are the poorest and least literate. Most are farm laborers. About one in 10 can read. So impoverished is this group that they hunt field rats to supplement a deprived diet. Mushahar is Hindi for rat eater. But the outlook for the state's two million Mushahar has brightened in the past year. Thanks to government aid programs, more Mushahar children are attending school. Increased state investment in roads and local factories has put their parents to work. Demand for laborers has pushed up wages for field work.

Companies from such as telecom provider Reliance Communications India Ltd. say rising sales in once-spurned rural areas are driving their India growth. The Indian unit of LG Electronics, which sells low-voltage appliances for power-deprived areas, expects rural areas to account for 45% of its Indian sales this year, up from 35% last year. A car and tractor maker, says it couldn't keep up with orders for its new Xylo, a cross between a minivan and SUV, in part because of surprising rural demand. If any one part of the economy is decoupled from the global crisis, it is India's rural sector, says Anand Mahindra, vice chairman of the auto maker's parent company.

Tariff Barriers

The countryside's strength comes in part from a trade policy that free-market economists say may hurt India in the long run. Tariffs on agricultural imports are among the world's highest and may have deterred investment in rural India. But these tariffs have also sheltered swaths of the country. An estimated 88% of India's rural incomes are tied to activities inside those markets, according to IIFL. Even slight improvements here are significant, economists say, because they build on a base of practically zero. For so long, these states were a drag on our economy, says Surjit Bhalla, head of Oxus Research & Investments, an advisory firm in New Delhi. Now larger rural populations can become a fillip to growth. India's economy has held up better than most, in spite of slowing tech sales and falling real-estate and stock markets. The International Monetary Fund projects India will grow 5.1% in 2009, India is also closing the gap on China, whose 6.7% projected growth for 2009 marks a sharp decline from recent double-digit gains. Bihar, which borders Nepal, was once a breadbasket of eastern India. But it largely missed out on the economic miracle of the last decade. In the 1990s, as India's economy expanded about 5% a year, Bihar barely grew.

Infrastructure was poor. Farm goods often rotted before reaching the market. Amid corruption and rampant crime, the state was branded India's kidnap capital. The young left to seek education and jobs. More than half Bihar's 83 million residents live below the international poverty line of about $1 dollar a day. Fewer than half are literate. The state attracted $167 million in foreign direct investment between 1994 and 2004, a period when India as a whole attracted $29 billion.

Government Open House

In recent years, political candidates won elections with promises to empower to lower-caste voters. But education, health and infrastructure projects were often neglected, presenting opportunity for opponents. In late 2005, a former railways minister from a low-caste background, Nitish Kumar, became chief minister, the leader of Bihar state. Breaking from the torpid bureaucracy of his predecessors, the 58-year-old Mr. Kumar has tried to prod the government machinery into action. He hosts Monday open houses at his residence, where ministers and department secretaries are required to field public complaints. Bureaucrats must also accompany him to town-hall meetings in far corners of the state, where they pitch tents in fields. His critics say the exercises simply aim to drum up votes; Mr. Kumar says an open government serves the people and the economy. My message is that democracy should provide solutions to the problems, he said in an interview at his residence, where he wore traditional white linen trousers and shirt. With an alliance led by his ruling Janata Dal (United) party, Mr. Kumar has built thousands of miles of roads. He has hired 200,000 schoolteachers and is recruiting 100,000 more. He has lured private-clinic doctors back to public hospitals. Development projects and strong harvests have helped Bihar's economy close the gap with the national average. The state is growing at an annual rate of about 5.5%, and that is expected to accelerate, according to the Asian Development Research Institute. The number of people migrating out dropped 27% in the 2006-08 period compared with 2001-03, according to the Bihar Institute of Economic Studies, a local think tank.

Homes in a Gully

One of Mr. Kumar's toughest challenges is improving the lot of the Mushahar in places like Dev Kuli village. Home to about 10,000 people, Dev Kuli is surrounded by farming hamlets and abuts a two-lane highway where long-haul trucks blast their air horns as they rumble toward New Delhi. The lives of all residents, from low caste to high, have long revolved around the rice and wheat harvests. Several hundred village families are outcaste Mushahar, who live among goats, pigs and swarms of flies in a dried-out gully. The government began to build brick houses but left them without windows or doors. As a caste the government has identified as "extremely backward," the Mushahar will be eligible for a $57 million government program that will provide families with a water supply, toilets, radios and educational support, according to Vijoy Prakash, the principal secretary for two government departments dedicated to low-caste assistance. On Mr. Prakash's desk sits a stuffed rat, a reminder of who such programs aim to help. Yet he says past efforts have failed in part because only 9% of the Mushahar can read. This is the group that has remained excluded from India's growth, he says. As the sun came up on a recent day, a group of Mushahar gathered round a water pump to wash clothes. Later in the morning a long line of Mushahar children made their way up a mud embankment and, in a profound departure from community tradition, headed to primary school. Parents complain that their children face discrimination even at Dev Kuli's one-room school for Mushahar children, the name of which translates as Slum People's Primary School. Children from other castes attend a school nearby. The government has repaired the school's roof in recent months, hired a new teacher and added an extra bathroom to provide privacy for girls. Even so, the school doesn't have chairs or desks, so students sit on empty grain bags and write on a cement floor covered with dirt. Each day, a group of government-hired Mushahar, known as motivators, roust children from their homes and escort them to class. Motivator Phulwanti Devi, a recent and rare Mushahar college graduate, says she battles parents almost every morning to release their children from farm work. We tell them, It will improve their future, says Ms. Devi, 25 years old. They reply, We don't see that you have such a good job. I tell them: I have a diploma, and so I can get a better job. What about you? Still, Ms. Devi and other motivators say attendance at the school has grown. Teachers say about 150 children are enrolled. On a recent day, the motivators rounded up about half that many. There are other challenges. Some motivators say they haven't been paid their salaries of 2,000 rupees a month, about $40. Local officials occasionally tell teachers to skip class to conduct government work, such as counting votes at election time. Mr. Prakash, the secretary for lower castes, says the motivators will soon be paid from funds his department has set aside. Bihar's education secretary, Anjani Kumar Singh, says a Bihar court has ruled that teachers can't skip class for government work, but admitted the order could be hard to enforce at election time.

Spicy Masala

Generating genuine business activity among a largely illiterate community hasn't been easy, either, judging by Mr. Prakash's rat-farming initiative. He estimated that three million people in the state would welcome a stable supply of the protein-rich meat. Many Mushahar say they enjoy the meat, typically barbecued or cooked with a spicy masala, and believe it keeps their hair dark. But many resented being pushed into farming them. If we get involved in rat farming, our children will also get involved, says Ms. Devi. After some Mushahar protested in Patna late last summer, Mr. Kumar, the chief minister, shelved the proposal. Yet Dev Kuli's economy has improved. The infrastructure push has created jobs building and repairing roads. That has helped bring factories to the area, say locals, including a steel mill and a cola-bottling plant. Those jobs have boosted farm wages to the point where the Mushahar won't work in the fields for less than about $2 a day, says Raj Ballabh Raji, a local farmer from a different caste. Mr. Raji, who now works his six acres with a new tractor, notes one more sign of prosperity. You can now find a petrol pump within a mile of here, he says in a tone of pleasant surprise. The economy is changing.

India's central bank Tuesday lowered interest rates and forecast slower economic growth but its governor said he sees some signs that the economic crisis is easing. There is still uncertainty and there is concern about the way forward but the daily bad news that we were expecting I think is behind us, said Duvvuri Subbarao, the governor of the Reserve Bank of India. In its continuing fight against economic decline, India's central bank has effectively swapped its heavy artillery for small arms. The Reserve Bank of India on Tuesday cut its benchmark rate by a quarter percentage point. On the heels of four percentage points in cuts in the past six months, it's difficult to imagine this move having much impact on the rates. Govt hopes banks will cut lending rates The Government today expressed hopes that banks will cut lending rates in response to the RBI's move to reduce key policy rates by 25 basis points. The Reserve Bank has been monitoring the economic situation and Reduced the policy rates by 25 basis points This is a reiteration of the signal from RBI to banks.

India's 700 million-strong electorate will embark on a grand exercise of popular democracy when the country's month-long national election starts Thursday. Voters' most prominent concerns include national security and economic well-being. However another less tangible, though no less important, issue also looms large: the future of Indian secularism.

Tolerant or not? Varun Gandhi says his anti-Muslim remarks were not intended to incite violence, March 19, 2009.

This issue has been brought to the fore in this election cycle thanks to inflammatory remarks about Muslims made by Varun Gandhi, a grandson of former Prime Minister Indira Gandhi. Now a member of the opposition Bharatiya Janata Party (BJP), he reportedly suggested that he would cut off the hand of any Muslim who threatened a Hindu. His comments were made at a campaign rally in Pilibhit in the northern state of Uttar Pradesh last month. Normally such callous remarks wouldn't receive national attention. But Mr. Gandhi's celebrity, coupled with India's aggressive media and the fact that Muslims are India's largest minority group, ensured his comments spread quickly. It's a serious issue: India, as a multireligious and polyethnic state, must have a government that guarantees and protects the rights of all minorities. Departing from this principle has cost India dearly in the past. Mr. Gandhi's remarks have created a dilemma for the BJP as Thursday's election approaches. On the one hand, party elders have sought to distance themselves from his statements. On the other hand, many within the party feel that Mr. Gandhi has little to apologize for, reflecting the BJP's willingness to exploit religious divisions within the country to bolster its electoral prospects. This is an old struggle for the BJP, which built its popular base largely by appealing to Hindu nationalist sentiments, but in recent years has tried to market itself as the party of economic reform and national security. Secularism also presents a dilemma for the ruling Congress Party-led coalition. Led by Sonia Gandhi Mr. Gandhi's aunt Congress has abandoned its tolerant principles when electoral considerations proved too enticing. Take the case of Taslima Nasrin, a Bangladeshi author who took refuge in India after Islamic radicals threatened to kill her for her work. In 2007, she was attacked at a book reading. Congress-appointed Vice President Hamid Ansari courageously condemned the attack, but few other politicians joined him. This year, Ms. Nasrin was informed that she could stay in India only if she refrained from any dealings with the press and avoided public appearances. She chose to leave India for a fellowship abroad.

Just as seriously, in January of this year a BJP-affiliated organization, the Sri Ram Sena, or Lord Rama's Army, launched a series of attacks on young women frequenting pubs in the southern state of Karnataka. The silence from Congress politicians was deafening. Only a junior minister in the national government, Renuka Chowdhury, spoke out against this form of violent local vigilantism. Nor was this the first instance of wanton lawlessness: Previously, the Sri Ram Sena had attacked college women in the company of Muslim male companions. Congress' stunning unwillingness to defend secularism stems entirely from its quest for the conservative Muslim vote. Unfortunately, its concessions to parochial Muslim opinion play directly into the hands of the BJP. They also reinforce the position of other purveyors of religious intolerance in India, such as Muslim clerics and opportunistic politicians. This is a sad departure from Congress's roots. Its founder, Jawaharlal Nehru, was a staunch secularist, and recognized that any departure from secular principles would undermine the country's commitment to liberal democracy. However, Indira Ghandhi, his daughter and successor, resorted to populist appeals to bolster Congress's sagging political fortunes. In the 1983 Jammu and Kashmir state elections, she made thinly veiled appeals to religious sentiments in the Hindu-majority part of the state. Earlier, through her political support for a Sikh revivalist preacher, she contributed to political polarization in Punjab, a critical border state. Her son, Rajiv Gandhi, did little to reverse this downward slide. When faced with the prospect of losing Muslim votes, he exploited his parliamentary majority in 1986 to overturn an Indian Supreme Court judgment that had granted an indigent Muslim woman the right to alimony. Later, to win back Hindu supporters, he revived a dispute involving a 16th century mosque, the Babri Masjid, reputedly built on the ruins of a temple consecrating the birthplace of Lord Rama, a key member of the Hindu pantheon. Departures from secularism have had grave consequences for India. Hindu zealots destroyed the Babri Masjid in December 1992 and set off waves of inter-religious rioting across India. Well over a thousand people were killed. In February 2002, religious rioting in Gujarat state resulted in the massacre of 1,000 mostly Muslim citizens. The Mumbai terror attacks last year, which killed about 170 people, were largely aimed at inciting this religious terror again. The BJP rose to power and briefly formed a national government in 1996 largely as a reaction to Congress's declining support for secularism and because the BJP appealed to the majority Hindu population's fears. This time around, a range of national and local issues, from terrorism, to the national economy, illegal immigration, governance and political corruption, will dominate the news. But the vexed issue of the future of Indian secularism remains a critical question. Until both Congress Party and BJP leaders recognize secularism's intrinsic importance in a country of unparalleled religious diversity and act accordingly to uphold the principle with vigor the nation may again fall prey to coarse populist appeals and face yet another wave of religious discord and violence. India's democracy deserves better.

Indian firms may start to wish they'd never heard of convertible bonds.Having tapped this cheap source of financing to fund acquisitions or expand in years past, several now face an unwelcome near-term call on their cash reserves. Even those with some breathing room might give shareholders a start if they recognize the full liabilities associated with the debt.

Tech Mahindra Ltd.'s winning bid for troubled Satyam Computer Services Ltd. is a bold move in tough times for an Indian conglomerate known better for its rugged tractors than its software. Tech Mahindra, a midsize outsourcing company, is part of the farm equipment-to-finance Mahindra Group, one of India's largest conglomerates. Its aggressive bid for Satyam shows how much it wants to expand its outsourcing business and profile in the Indian economy. Its bid was valued at $351 million for a 31% stake in Satyam, with the requirement to purchase 20% more at the same price per share later.

The Indian unit of Suzuki Motor Corp. Tuesday unveiled its second K-series gasoline engine to cater to growing demand for more fuel-efficient and environment-friendly cars as it adds new models in the market.

Satyam: The sale of Satyam has been as fast as any M&A transaction you are likely to see, thanks to the single-minded dedication of the board. The directors were determined not to break up the company and set definitive rules that made for an open and transparent sale process. In doing so, the board contained pretty well an event that, as recently as January, had the potential to be a big blow to the reputation of India's information technology industry and corporations in general. The Indian government also recognized the damage that this could do India.

Venture Capitalist in India are learning: India's venture capital scene is finally reaching a plateau, causing investors there to search for a new way forward. Venture capitalists are leaning more toward later-stage companies, while the business and financial services sector has now supplanted information technology as the area attracting the most start-up capital. One particular area in India that apparently has venture capital firms salivating is education. A new report suggests that various factors in India such as an inefficient public education system, a booming young population and a bourgeoning middle class are creating a wealth of opportunities for start-up companies. 90 venture capital and private equity investors were surveyed in India and found that 80% of them were interested in investing in education in the next six to eight months. In the past four years, these firms have made more than 30 education-related investments worth more than $300 million. One-fourth of that money has gone to companies focused on online learning services, while vocation training and tutoring/test preparation have also received a large share. While only two investments have been made in the kindergarten to grade 12 segment, a separate report last year by CLSA Asia Pacific Markets estimates this market to be the largest in terms of annual sales at roughly $20 billion, about half of the total estimated market size for India's private-sector educational market. Other large segments include private professional colleges at $7 billion and tutoring at $5 billion. The investors indicated that test preparation, content providers and pre-school companies were the most attractive investments segments overall. Despite the investor enthusiasm, more than half of the fund managers polled for this report believe that regulatory hurdles are a significant deterrent to the free flow of investments into the education industry. These concerns include a non-profit requirement for certain schools and colleges, restrictions on foreign investments in higher education and a general lack of clarity on what is allowed. Venture Intelligence's report is worth a read for entrepreneurs who are thinking of entering India's education market or are already dabbling in this space. It includes a listing of venture capital investors and advisors that focus on India's education industry, as well as personal insight from some of these investors, such as Sequoia Capital India, which offers its take on India's tutoring sector. Sequoia Capital backed a tutoring-services company called TutorVista in 2006. Below are some venture investments in India education companies in the past few months: The vocational educational institute Global Talent Track , Pune, received $6.5 million in funding from Intel Capital and Helion Venture Partners in January to roll out vocational education services in India and abroad. The company Excelsoft, Mysore, which provides customized online learning products and services, received $9 million from Singapore based fund Arohi Asset Management in September. A chain of branded pre-schools, Tree House Education picked up $7 million from Matrix Partners India in August. In August, Draper Fisher Jurvetson made its first solo investment since it set up an office in India in 2007, putting an undisclosed amount into Catura systems, which operates education-training.

Kasab Trial: 26/11 breakthrough in Europe: 60-day global covert operation by Indian intelligence agencies leads to Pak Lashkar operative's detention in Europe. A secret, determined global effort by India to track down those involved in the November 26 Mumbai attacks has borne fruit. Shahid Jamil Riaz, a key Lashkar-e-Tayyeba (LeT) operative who handled financial transactions and was among the core group of 26/11 conspirators.

From the Horse's mouth: Devita Saraf, Exec. director, Zenith Computers on Education in India: Last year she was invited to my all-girls high school as the chief guest on Speech Day, the equivalent of commencement. Usually, chief guests are elderly senior dignitaries like the Mayor. It was a real honor for her to be invited. Many of the teachers who taught her from kindergarten are still teaching and mentioned that they were very proud of her.

Devita Saraf, CEO of Vu Technologies and Executive Director of Zenith Computers

What they did not say, and what their expressions could hardly conceal, was that they also were surprised that I was chosen that year. Why? Because I was an above-average student, never class president, did not play any sport and had the proud title of being the naughtiest girl in class. The strict convent school dreaded kids like me who weren't the typical obedient child who is "seen and never heard."

In some institutions abroad the educational atmosphere couldn't have been more different from India. Students were encouraged to speak up, have an opinion and be prepared to air it in class. We even got extra grades for speaking up! As a result, students excelled in most classes except for electives such as Organic Chemistry that are painfully thrust upon undergraduate business students and enjoyed learning. In a Strategic Decision-making class, the Professor and the student had a bet on a particular chapter's results. The student won the best and the next day, the professor sportingly distributed candy to the entire class. Amazingly, the student still has great relations with the Professor and emails him on strategic business problems and he responds with brilliant distilled advice on business strategy. Indian education is based on the British system and is an excellent method of teaching for high school. Children are used to studying for long hours and good grades give you better career options. But it is becoming increasingly competitive, and one cannot decide whether the pressure is more on the student or the parent. A student who appeared for her 10th grade board exams, the most important exam of your life in India has a busy schedule. High school education can be comparatively less rigorous and competitive and often has many more social problems among students. Children in India and across Asia are burning out too soon due to their hectic schedules. And they are losing out their motivation to succeed in their careers because by the time they have completed college, they are looking forward to retirement. Notice how many people between 25 and 35 years old have a Facebook status commenting on their desperate need for a weekend or a vacation. Excellence in education provides young people with options for a great career. But are we losing out on their enthusiasm in the long run? Children and their parents must let kids get an average B grade/80% marks and excel at three hobbies or sports of their choice. There is no point of having an honor student/topper child who doesn't succeed in the longest race called life.

A man displays the indelible ink mark on his index finger after casting his vote, outside a polling station in Sonapur village.

What is becoming apparent,, is just how much either national party the Congress, which is now in power and the opposition Bharatiya Janata Party could struggle to form a government in the world's largest democracy. Even before polling began, neither party was expected to win a majority of Parliament's 545 seats and instead rely on a coalition of regional-parties to gain a governing majority. As part of those alliances, the national parties and their local allies agree not to field candidates against each other in key constituencies. But in the weeks since voting began, many of those alliances have ruptured, with regional parties insisting they want to garner as many votes as they can rather than play second fiddle to the goals of Congress or the BJP. That's left the already-weak national parties facing off against former friends and struggling with some tougher fights than they expected. In many of the 141 districts nationwide that voted Thursday, Congress and the BJP had to field candidates against former allies. If neither the Congress nor the BJP nor another alliance can form a lasting majority, it risks plunging India into political chaos with a revolving door of weak governments and possibly another election. That could have a devastating effect on The Indian Economy and investor confidence just as India is hoping that its current slowdown will be shorter and shallower than most of the world's other major nations because it has a large domestic market and, relatively, is not a big exporter. A woman walks past policemen after casting her vote at a polling center during the second phase of Indian elections in Panvel.

In Orissa state, which wrapped up voting Thursday, the BJP faced off against old ally Naveen Patnaik. Earlier this month, his regional party, the Biju Janata Dal, broke off an 11-year partnership with the BJP, instead contesting the state's 21 seats on its own for the first time since Mr. Patnaik created the party in 1998. Mr. Patnaik, chief minister of the eastern state, has signaled that while he's open to alternatives, he won't throw his support behind either Congress or the BJP. In the last national vote five years ago, Congress and its two regional allies won 39 out of the 42 seats in the large southern state of Andhra Pradesh. Those alliances have since crumbled, and Congress went to polls alone Thursday, when the state completed polling. It could mean a poor showing in a state that Congress needs to win big if it hopes to be in the driving seat to form a coalition when votes are counted next month. If the independent-minded regional parties poll sufficiently well, they could potentially form a government that excludes both Congress and the BJP. Of course, some of them could also quickly repair their fractured alliances if they had the prospect of being part of a coalition government. Indeed, at least some of the hostile rhetoric between the national parties and their erstwhile allies represents the staking out of negotiating positions. Regional parties that win roughly 20 parliamentary seats or more may be in a strong enough position to make or break a coalition government led by a national party, says Mr. Alam and therefore can demand key ministries or cabinet positions in return for their support. Congress and BJP officials say they remain confident of their prospects of being able to form the next government. Most of the BJP's allies are long-standing relationships that last over a decade, per party spokesman Nalin Kohli. The BJP alliance is better poised as of now and confident that it will be the number one alliance once the votes are in. BJP held 111 seats in parliament before the elections. Further problems may lie ahead for the major parties, however. In West Bengal state, which starts voting April 30, Congress' leftist allies have already broken off to form a fledgling Third Front unaligned with either national bloc. In the northern state of Bihar, the Rashtriya Janata Dal headed by Lalu Prasad Yadav, who was railways ministry in the last government, split from Congress after the two couldn't come to an agreement on how to divide which party would contest in which districts in the state. Congress officials say Mr. Yadav wasn't giving Congress enough districts; Mr. Yadav says his popularity in the state means his party should be getting the lion's share. Mr. Yadav has since teamed up with two other regional parties in north India, forming what they call the Fourth Front but Congress has been putting out ambiguous signals that they might take him back if they form the next government. On Tuesday, External Affairs Minister and senior Congress leader Pranab Mukherjee said Mr. Yadav would have a tough time becoming a minister without a bigger party's blessing. But after Mr. Yadav replied that he hadn't made up his mind about abandoning Congress, Mr. Mukherjee retracted those comments, blaming the miscommunication on his broken Hindi. Mr. Mukherjee is a native Bengali speaker.