Halfway Point for the UPA

The Way Things Are Going…

When the Congress Party came to power nearly three years ago, middle class hearts were gladdened. Having supported the Neanderthal Democratic Alliance led by the BJP, many were dismayed by the 1998 nuclear tests, following which India became a pariah of the international community. In 2004, the Congress-led UPA won a mandate. Tragically, the Congress think tank, which consisted largely of people who played the role of the palace guard for 10 Janpath, interpreted the result as a vote against the BJP’s “India Shining” campaign.

The Congress continues to believe that Indira Gandhi was their talisman with her garibi hatao and her 20-point program. They see in Sonia Gandhi glimpses of Indira, when really she represents a continuation of her husband Rajiv Gandhi’s vision of ushering India into the 21^st century. Many of us who worked closely with him remember when he met Jack Welch, the head of GE, who started the first BPO operation. The rest is history. Today, we are not just the world’s back office; we are solving complex business problems on the basis of our information technology expertise.

Yet the Congress rank-and-file believes that the socialist nostrum is the way forward. They now talk about “inclusive growth.” There can be no denying that the fruits of India’s screaming economic success, led by the BPO industry, should also include the poor and that the government must play an active role in ensuring that they are equally distributed. But that’s not why the BJP-led NDA coalition was defeated. The middle class that voted it into power in 1998 deserted them, frightened by the communal agenda and more so by their incompetence in governance.

The BJP sees things in black-and-white: they propagate that the Congress is an anti-Hindu party and seek votes by raising the basest communal passions that were tweaked by the Partition. The Congress also takes a similar zero-sum view and pits the rich against the poor, stoking the fires of class conflict. It is unable to shake the Soviet mindset of state control over all aspects of human endeavor.

Both parties tend to ignore the middle class. In the old days, the middle class was small and easily forgotten; today it is a substantial, creative force that chose to oust the communal die hards of the BJP. And this is the very group against which the Congress seems to have taken up cudgels, with its divisive agenda of class and caste differences. It has increased taxes, squeezed credit and supported irrational quotas based on caste.

Neither party has taken into account the aspirations of this fastest growing segment of the population. There is something abroad in the world; it’s called the India story. No political party seems to understand it. After Manmohan Singh, as finance minister, scrapped Soviet-style controls on private enterprise in 1991, the economy boomed. Unfortunately, the sacking of the Babri Mosque derailed the reforms the very next year. The economy began to drift and that saw the comprehensive defeat of the Congress in 1996 and the emergence of carpetbagger politicians, who slept in different political tents every night.

In 1996-1997, there were two weak Congress-backed governments under whose dispensation the bureaucracy was able to stall any further reforms. In 1997, when it was clear that the Gujral-Deve Gowda regime had run it course, the bureaucracy unleashed a series of demand management measures including a rise in interest rates that reined in the growing economy. The recession that followed lasted until 2003. In the interim, BJP-led coalitions came to power but proved unequal to task of reigning in the demand managers. It resorted to ad hoc measures such as the poorly designed national highway program. In the event, the BJP-led NDA crashed to defeat in the 2004 election.

For two years, the UPA government focused on setting things right. But the internal contradictions in the Congress and the nihilism of the Left saw its goodwill erode. The Congress is losing elections everywhere but its sycophantic leaders believe that Rahul Gandhi will deliver them from the morass of ignorance and intrigue that is sapping the party. Such complacency will cost them dearly.

from daily news and analysis april 18 2007

Incredible India

Going to Hell in a Hand Basket

Everywhere I turn, India is screaming and shouting. Mayawati has done this; Mulayam has done that; Karat is posturing as he may have done in his days at Jawaharlal Nehru University; the cricket guys are in a huge cacophony; and Bollywood is in your face. The business lot is putting out news releases about buying this or that company in the world. Gimme peace, already!

That’s why I retreat to my place in Goa and sit out late at night on my upstairs verandah, contemplating the cathedral of giant coconut trees surrounded by a curia of chickoo and mango. There is a choir sounding softly in the night; a harmony of gentle sea breezes rustling through the palms, like a quiet drizzle of rain.

For the past 28 years, I have been intimately involved in the public affairs of our great country. I thought we could do things differently. Certainly, since I came here from the United States in the late 1980s, things have changed dramatically. People are buying and doing things they never did before: toiletries and cosmetics, refrigerators, air-conditioners, washing machines, cars, houses and, in the upper reaches, designer clothes, yachts and even airplanes; in the realm of doing is the explosion of public transport, telecommunications, vocational education and computers.

India is enjoying the benefits of globalization. There are more choices, more opportunities, more hope. As I sit, contemplating the silence of my house in Goa, away from the chaos and noise in the public space, I can’t help wondering if we are getting it all wrong again. We admired but never practiced socialism; we practiced but never admired capitalism. We mixed our socialist mindset with a very stiff dose of elitism. Our recipe had ingredients of privilege, prejudice and perfidy. The concoction tasted of feudalism and authoritarianism.

Growing up in the primeval India of the 1960s, I realized that connections ruled. A reasonably talented young person from the middle class could only do what I did: emigrate. We fled socialist India to seek our fortune elsewhere, especially America. Back home, the privilegentsia dragged the country down into the abyss of poverty and pity. It became a basket case, scorned by the world. In the end, in 1991, the government was reduced to sending secret shipments of gold to the Bank of England to demonstrate solvency.

I was back in India when the Narasimha Rao government was left with no choice. In a historic budget, then finance minister Manmohan Singh scrapped the industrial licensing system. Reforms served up in that budget faced several political challenges including the demolition of the Babri Masjid and the rise of Hindu nationalism. Most subsequent measures were undertaken by stealth. Such changes went against the very grain of the culture of bribery and corruption bred by controls. Nevertheless, slowly but surely, the options for the corrupt politicians and bureaucrats declined.

Even today, there are vocal and powerful opponents of reform. The BJP stance is puerile politics. The Left is a dupe of the mandarins in Beijing. Within the Congress there are still several lobbies that feel it has tarnished the party’s self-image as a “pro poor” formation. Then are there are the “others,’ who feed off the trough of government finances: they are insidious opponents of reform.

With such formidable opposition, the government’s initiatives have been stymied except in the most esoteric areas of capital markets. The Indo-US civilian nuclear deal could have major benefits aside from the obvious ones that will bring India out of its pariah status. Sadly, it is on hold because of the Left servitude to Beijing and the infantile opposition of the BJP. Within the Congress, various mindless forces have contrived to sabotage India’s growth story because, like the wily Arjun Singh, they believe in nothing, profess only sycophancy.

The government’s botched effort at handling growth indicates the old mindsets still rule. So if there’s inflation: too much money chasing too few goods, the Congress poobahs would rather opt for the failed solution of demand management when the obvious thing to do is to remove obstacles to the production of more goods and jobs.

But no! We can’t have retail bloom; we will curtail growth in telecoms by all manner of stupidity; we will shackle financial services; we will not remove the barriers to real estate growth and continue to sabotage the crucial education system with rules and regulations set out by the corrupt and inept All India Council on Technical Education (AICTE). We seem to be going back to the starved sixties in a leaky boat whose officers and crew have no clue how to navigate in the changed economic circumstances.

So now we have choice between the devil: the loud, crass nouveau riche India; and the deep blue sea: the old scheming one in which the privilegentsia reigned supreme. With growing prosperity, India’s privileged classes, who wield more power than their legitimate bank balances, won’t have the wherewithal to maintain legions of low-wage servants: maids, bearers, drivers, gardeners, guards and assorted flunkies, all paid for by the feudal government and the rapacious private sector.

At the rate things are going, the nexus of politicians, bureaucrats, activists and fixers will have our country on its knees again, hunting for nuts and berries on the margins of the global mainstream.

copyright rajiv desai 2008

The Rahul Gandhi Icon

Wearing Garlands of Wilted Flowers

Rahul Gandhi has burst upon the Indian political scene with his well-publicized “Discovery of India” campaign. The name he has chosen is evocative of his great grandfather’s eponymous 1946 book; in it, Nehru introduced to the political lexicon three charged concepts: of nationalism amid cultural diversity, of indigenization to combat colonialism and of “unity in diversity,” a phrase to challenge the demand for Pakistan.

Trouble is the once-resurgent BJP exploited the divide between diversity and nationalism to advocate the chauvinistic concept of “cultural nationalism;” the Left expropriated indigenization to support and promote the corrupt and inept horror of license-permit raj and “unity in diversity” became a banal political slogan that provided air cover for cults and mafia formations based on caste politics.

This is the well-worn path of the Congress Party’s moribund ideology. There is no doubt that these ideas are well past the “sell by” date. And yet the Congress insists on garlanding Rahul with these tired old bromides. His two major forays into public policy have the makeshift look of photographs taken by a pinhole camera. To begin with, he led a delegation to the Prime Minister, asking for an expansion of the National Rural Employment Guarantee Scheme; his latest was to seek a similar broadening of the government’s recently announced loan-waiver scheme for distressed farmers.

Noble in their intent, these initiatives nevertheless have a hare-brained aspect to them. They seem to be ill-conceived with hardly any thought given to the identification of beneficiaries and how to prevent leakages; their implementation plan has the nature of what enthusiasts of American football call a “Hail Mary” pass, in which a player throws the ball in desperation hoping someone will catch it and run it into the end zone to score a touchdown. Rahul’s push seems to be based on the Congress assessment that with populist schemes and a please-all budget, they have seized the political high ground.

As political strategy, the government’s latest moves may pay handsome dividends; in a few swift gambits, the opposition has been pushed against the ropes. Given the competitive populism that passes for politics, the government can rightly feel it has emerged triumphant.

However, the schemes will do with little for their intended beneficiary: the aam aadmi. The Congress line is that given the high growth rate, the government can afford to be generous with the “weaker sections.” Meanwhile, the government’s financial managers have, because their fear of inflation, succeeded in the reversing the growth story. The latest indices of production show a steep decline in manufacturing and a virtual collapse of the capital markets.

Analysts say the overall growth rate could come down to six percent over the year. That will reduce the amount available for populist handouts. Clearly, the schemes are unsustainable, especially if the economy tanks. I wonder if the mandarins of North Block have thought this through. Otherwise, the government’s shrewd populist move will devolve into just another time-worn ploy to buy votes with money.

Unless Rahul can shake off these wilted-flower garlands, he could find it difficult to accomplish what he let slip recently: to revive the Congress by ushering in inner-party democracy। The party has not changed much; it is teeming with sycophants and fixers, and ambitious but clueless politicians, seeking to climb a rung higher. When Sonia Gandhi came upon the scene 10 years ago, the party was tottering, rent asunder by the wiles of petty men like the late Sitaram Kesri and Arjun Singh. She stabilized it, kept the flock together and went on to victory in the 2004 election.

Things have changed now and Sonia’s cautious, “don’t rock the boat” approach has passed the point of diminishing returns. The party rank and file stir themselves only to protect their turf and privileges. As things stand, it appears that for the Congress Party, we are still in the 1960s and 1970s when only state-approved voices were heard; the rest was ambient noise to be shut out by the sound-canceling earphones of ideology. From “garibi hatao” to “inclusive growth,” poverty still remains the dark side of what Nehru called the Indian adventure.

copyright: rajiv desai 2008

Res Gestae

Res Gestae is based on the belief that because certain statements are made naturally, spontaneously and without deliberation during the course of an event, they leave little room for misunderstanding/misinterpretation upon hearing by someone else.