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By:

Akhilesh Sinha

25 June 2025 at 2:53:54 pm

Congress tries a ‘third’ hand

New Delhi: The BJP latest manoeuvre in elevating Nitin Nabin as the party’s national working president has had consequences in Maharashtra’s two biggest cities - Mumbai and Pune. The result has left the Congress party in a curiously ambivalent mood: quietly pleased by the opportunities created, yet wary of the turbulence ahead. In Maharashtra, the immediate beneficiary of the BJP’s move is Eknath Shinde’s Shiv Sena. The BJP’s organisational signal has strengthened its hand in the forthcoming...

Congress tries a ‘third’ hand

New Delhi: The BJP latest manoeuvre in elevating Nitin Nabin as the party’s national working president has had consequences in Maharashtra’s two biggest cities - Mumbai and Pune. The result has left the Congress party in a curiously ambivalent mood: quietly pleased by the opportunities created, yet wary of the turbulence ahead. In Maharashtra, the immediate beneficiary of the BJP’s move is Eknath Shinde’s Shiv Sena. The BJP’s organisational signal has strengthened its hand in the forthcoming elections to the BMC, Asia’s richest civic body, and in Pune, the state’s second city. For Shinde, whose legitimacy still rests on a contentious split with the party founded by Bal Thackeray, any reinforcement from the BJP’s formidable machine is welcome. For Uddhav Thackeray, who leads the rival Shiv Sena (UBT), the message is ominous. His party, once the natural custodian of Marathi pride in Mumbai, now faces the prospect of being squeezed between a BJP-backed Sena on one side and a revived Maharashtra Navnirman Sena (MNS) led by his cousin, Raj Thackeray, on the other. Shotgun Alliance That pressure has forced Thackeray into an awkward embrace with his estranged cousin. A reunion of the Thackeray clans, long rumoured and often aborted, has unsettled Thackeray’s MVA ally - the Congress. Signals from the party’s high command suggest a calculated distancing from Shiv Sena (UBT), particularly in Mumbai, where Congress leaders are exploring arrangements with smaller parties rather than committing to a Thackeray-led front. In Pune, the party’s pragmatism is even more pronounced. Quiet efforts are under way to entice Ajit Pawar’s NCP, currently aligned with the BJP, into a tactical understanding for the civic polls. Control of the municipal corporation, even without ideological harmony, is the immediate prize. For the embattled Congress, the civic polls offer a chance to do two things at once. First, by keeping a degree of separation from the Uddhav–Raj combine, it can strengthen its own organisational sinews, which have atrophied after years of playing junior partner. Secondly, it can allow the BJP–Shinde Sena and the Thackeray cousins to polarise the Marathi vote between them, leaving Congress to position itself as a ‘third pole.’ Such a strategy is particularly tempting in Mumbai. A tie-up with outfits like Prakash Ambedkar’s Vanchit Bahujan Aghadi (VBA) could help Congress consolidate minority, Dalit and tribal voters, constituencies it believes are more reliably mobilised without the ideological baggage of Thackeray’s Sena (UBT). Severing or loosening ties with Shiv Sena (UBT) would also simplify Congress’s messaging ahead of assembly elections elsewhere. In states such as West Bengal and Tamil Nadu, where polls loom next year, the party has historically preferred alliances that allow it to emphasise secular credentials and oppose the BJP without accommodating overtly Hindu nationalist partners. Mixed Signals The Congress’ internal signals, however, are mixed. When talk of a Thackeray reunion resurfaced, Maharashtra Congress leader Vijay Wadettiwar publicly welcomed it, arguing that Raj Thackeray’s limited but distinct vote share could help consolidate Marathi sentiment. Mumbai Congress chief Varsha Gaikwad was more circumspect, hinting that alliances with parties prone to street-level militancy deserved scrutiny. Wadettiwar swiftly clarified that decisions would rest with the party’s senior leadership, underscoring the centralised nature of Congress’s calculus. In Pune, meanwhile, senior leaders are reportedly engaged in discreet conversations with Ajit Pawar, whose defection from his uncle Sharad Pawar’s NCP last year still reverberates through state politics. The outline of a broader strategy is becoming visible. Congress appears content to let the BJP and Shinde’s Sena draw on non-Marathi and anti-dynasty voters, the Thackerays appeal to wounded Marathi pride while it quietly rebuilds among minorities and lower-caste groups. Mumbai Approach Mumbai’s demography lends some plausibility to this approach. Alongside its Marathi core, the city hosts millions of migrants from Uttar Pradesh, Bihar and Jharkhand, a constituency that has increasingly gravitated towards the BJP. Raj Thackeray’s strident rhetoric against North Indians, once electorally potent, now risks narrowing his appeal and complicating Uddhav Thackeray’s efforts to broaden his base. None of this guarantees success for Congress. Playing the ‘third pole’ is a delicate art. Yet, the Congress, struggling for survival, has few illusions about sweeping victories. Its aim, for now, is more modest – it is to survive, to remain relevant, and to exploit the cracks opened by its rivals’ rivalries. In Maharashtra’s civic chessboard, that may be advantage enough.

India’s Goldilocks Moment

As global peers struggle with inflation or stagnation, India finds growth and stability in a rare alignment.

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India’s economy is basking in a rare ‘Goldilocks moment,’ evoking the fairy tale Goldilocks and the Three Bears where conditions are just right, ‘not too hot, not too cold.’ The GDP surges at 7-8 percent without overheating, spurring job creation and maximizing resource utilization. Inflation nestles comfortably in the 2-4 percent sweet spot, safeguarding purchasing power and anchoring interest rates. The rewards cascade investment and consumption boom, stock markets thrive attracting foreign capital, fiscal headroom expands as dearness allowances remain modest and borrowing costs dip, while business confidence soars, heralding sustained stability Amid global headwinds, this phase stands as a beacon of resilience, positioning India for its tryst with destiny as the world's third largest economy and a developed nation by 2047.


A cautionary note persists in the Wholesale Price Index (WPI), which turned negative since November 2025 at minus 0.32 percent, down from 1.21 percent in October 2025 and 2.16 percent a year earlier. The fall reflects easing prices of food articles, fuel, metals, and electricity. Food inflation slid to minus 4.16 percent from 8.31 percent in October, vegetables declined by over 20 percent, and staples such as onions and potatoes saw steep year-on-year drops, easing consumer wallets. Manufactured products softened to 1.33 percent (from 1.54 percent), fuel and power to 2.27% (from 2.55 percent). Cost pressures on industry stay mild, preserving production momentum without aggressive pass-through.


Contrast this with global peers: While the US grapples with sticky core inflation around 3-4 percent despite Fed rate cuts, and Europe battles energy-driven price volatility post-Ukraine, India's WPI softening reflects supply-side strengths like bumper harvests and stable commodity inflows. China's deflationary woes, with producer prices mired at (-) 2.5 percent through late 2025, stem from excess capacity and weak demand, but India's scenario feels more transitional, buoyed by robust domestic consumption. 


Bright Horizons

Retail inflation paints a steadier picture. Consumer Price Index (CPI) rose modestly from 0.25 percent to 0.71 percent in November, nudged by food prices. A softening rupee, firmer commodities, and vegetable spikes may lift WPI to a 0.5 percent positive. The Reserve Bank of India (RBI), eyeing CPI, has delivered 1.25 percent cumulative rate cuts this fiscal year it upgraded FY 2025-26 GDP to 7.3 percent from 6.8 percent, mirroring Q1’s 7.8 percent and Q2’s 8.2 percent vigor, Inflation forecasts dipped to 2 percent from 2.6 percent, underscoring rapid disinflation. RBI hails this “rare Goldilocks phase” of high growth and low inflation, with its mandate to anchor prices firmly in place.Globally this optimism diverges sharply. The Eurozone’s 2.4 percent CPI masks industrial slowdowns, while Japan’s chronic low inflation (under 1 percent) hampers escape from stagnation. So what gives India an edge? A young demographic dividend fueling 7 percent plus growth, unlike aging Japan or the US’s 2.5 percent plod. RBI’s proactive 100 basis points easing mirrors the Fed's path but from strength, not distress.


Silver Lining

Negative WPI signals deflation - falling prices hinting at softening demand, output, or jobs, Consumers might delay buys, firms pause capex, reminiscent of Japan's ‘lost decades’ where PPI deflation averaged (-) 1 percent for years, trapping growth below 1 percent. Risks loom deferred spending erodes demand, shrinking margins idle capacity, spiking unemployment, real debt burdens swell for borrowers, risking defaults and a deflationary spiral - recession fueling joblessness, further demand collapse, and plunging prices. Central banks hit the zero lower bound, as in the 1930s Great Depression when US prices tumbled 10 percent, amplifying global misery. 


Yet, India's context brims with optimism. Deflation here lightens real debt, empowers savers and lenders as currency appreciates, enables deeper rate cuts to boost exports, like how South Korea leveraged post-1997 deflation for a rebound, and delivers affordable goods, especially aiding the poor. Unlike Japan's debt-laden trap (260 percent debt-to-GDP), India's 80 percent ratio affords maneuverability. Base effects from last year's spikes will fade, and kharif harvests promise food stability. Globally, brief deflations have propelled recoveries: Post-2008, Australia's mild producer price dips preceded a mining boom. 


Experts worldwide laud India's Goldilocks run amid turmoil - US-China trade frictions, Middle East volatility, and Europe's energy crunch. Base effects and food volatility warrant vigilance, but the RBI’s foresight and swift action, including the new rate cuts, are commendable. With the GDP firing on all cylinders, inflation tamed and global peers envious, India hurtles toward third-largest economy status. By 2047, as a developed powerhouse, it will banish inflation woes for its billion-plus citizens, scripting an economic epic that inspires the world.

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