x Abu Dhabi, UAESaturday 22 July 2017

An underachieving India has only its leaders to blame

Things are going badly for India, in many ways, and until there's some forceful leadership on the national scale, it's hard to foresee much improvement.

There is an all-pervading sense of gloom in India as the economy stalls, politics stagnates and social tensions escalate. The collapse of the governing authority has been as remarkable as it has been swift. The old image of India as a nation entrenched in corruption has returned to haunt us. First it was the telecoms sector. Now, it is coal. Sector by sector the crony capitalism that has come to pervade the Indian liberalisation story is being revealed for what it is.

Most recently, allegations of corruption in the allocation of coal-mining concessions have been hitting the headlines, leading to paralysis in parliament and demands from the opposition for the resignation of Prime Minister Manmohan Singh.

Vinod Rai, the comptroller and auditor general of India, reported last month on the allocation of coal concessions - without auction - to about 100 companies between 2004 and 2009. What he said has shaken the political landscape: Mr Singh was in charge of the coal portfolio when the alleged scam took place.

The entire monsoon session of parliament was a washout as the main opposition party demanded a commission to look into the affair and Mr Singh's role. The Congress Party has defended itself by targeting the institution of the comptroller, claiming the office was "misusing" its credibility, given "repeated errors" in its reports.

India's leadership has become a subject of ridicule, not only in India but around the world. Time magazine recently described Mr Singh as an "underachiever" while the Washington Post labelled him a "tragic figure". He is gaining a reputation as someone who looked the other way while his cabinet members were lining their pockets.

Nobody in the top leadership of the Congress Party, including Sonia and Rahul Gandhi, likes engaging with the public. They don't explain their decisions, they don't talk to people directly and they don't seem to believe there is a need to connect with ordinary Indians. Mr Singh makes no effort to mould public opinion to support his policies. No wonder most of the country feels there is hardly any government in New Delhi.

Last week, Mr Singh surprised many by announcing proposed economic reforms, including a plan to open the country's retail sector to foreign firms like Walmart. Opposition to this move will be fierce; Mr Singh will be under great pressure to reverse course, as he did following a similar promise last year.

That this should be happening at this juncture in India's economic transition is a real tragedy. The western world is mired in an unprecedented economic crisis. The euro zone problems have made it impossible for most European economies to grow and this will be true for a number of years.

The US is finding it difficult to get out of its economic morass, since deadlock in Washington and the presidential election in November have forced the government to postpone tough choices. As a consequence, the developed world is looking inward. China has its own political transition to worry about and recent events, including the Bo Xilai affair, have made the Communist Party more cautious as the changing of the guard approaches. More significantly, China's economic growth has also weakened.

This should have been India's moment to lead. But the Indian story seems to have ended before it began. The rupee remains Asia's worst-performing currency. The deficit is growing. Investors are shunning India due to policy uncertainty. The common man must cope with ever- rising inflation.

There is a persistent sense of chaos domestically, with the government unable to take any decisions and lacking the force of will to implement any it could make. The opposition, and even the government's allies, have sensed this weakness and are making sure that this government, which still has two more years until parliamentary elections are due, remains a lame duck.

For India's friends and allies in the outside world, this is a disappointing time. The US, which has invested significantly in a strategic partnership with India, finds the relationship struggling to regain its past glory. India's allies in East and South-east Asia, who had hoped that New Delhi would emerge as a critical counterweight to China, are looking elsewhere now. India's friends in Afghanistan are shifting their loyalties, fearing Pakistan's resurgence after Nato forces withdraw in 2014.

Yet the Indian political system is behaving as if nothing is wrong.

The crisis of leadership has allowed drift to set in. Sonia Gandhi has the power but no governmental responsibility. The prime minister has responsibility but no power.

The party has not allowed the government to proceed with the second stage of its economic reforms. In June, the global credit- rating agency Standard & Poor's warned that slowing growth and roadblocks in policy-making could make India the first BRIC (Brazil, Russia, India and China) country to lose its investment-grade rating. Indian paper could be relegated to junk-bond status.

The stench of corruption has become too odious. All major institutions are now struggling to retain their legitimacy. Politically, the party in power has lost all the capital it earned with the 2009 elections and there is no coherence in the government; departments are working as if there are no national imperatives, only narrow interests.

A new public opinion poll by the Pew Research Centre suggests that more and more Indians are pessimistic about their country, and especially its economic performance. This does not augur well for a nation that wants to emerge as a major power in the global hierarchy.

 

Harsh V Pant is a reader in international studies at King's College, London