RELIANCE "CONFUSED" BY DEVELOPMENTS IN DELHI

Vol 3, PW 9 (26 May 99) People & Policy
     

It is not often that Reliance Industries is caught off-guard.

The Mumbai-based conglomerate has long enjoyed a reputation of making and breaking Indian governments - but not this time. A source close to the company tells Petrowatch Reliance is "confused" by the Congress Party turmoil and has no clear strategy about what to do in the weeks ahead.

Reliance was active behind the scenes in pulling down the BJP government but did not foresee the split that has taken place and the decision by Sharad Pawar to form his own party. "This is not something the Ambanis bargained for or even visualised," a source tells this report.

"The companys strategy now is to lie low and do nothing until things settle down. They feel developments in the Congress party are out of their control".

In the run-up to the BJPs fall from power, Reliance forged a close relationship with key people close to Sonia Gandhi: her personal secretary, Vincent George; old friends of Rajiv, Arun Nehru and Pranab Mukherjee. The revolt by Sharad Pawar, however, has upset their carefully laid-out plans to be on the winning side if and when Congress rides back to power in September.

Pawar enjoys powerful support in Maharashtra and is a recognised businessman in his own right, with ambitions to be Prime Minister. Reliance wants to support Sonia Gandhi but can not afford to anger Pawar.

It is thus staying silent.