Pratap Bhanu Mehta
Just two years later, however, India’s growth is slackening, its national deficit is growing, and inflation is rising after having fallen between early 2010 and early 2012. Plans to build a more inclusive nation are in disarray. Income inequality has risen. According to the economists Laveesh Bhandari and
Yet the change in India’s economic performance is not nearly as stark as the comparison between 2009 and 2012 suggests. The economy has been troubled all along; all the hype in 2009 disguised a number of real weaknesses. Despite some economic liberalization in the years before, a whole range of regulations still made
That said, the current pessimism about
In other words, just as in 2009,
Too Great Expectations
In a sense, melancholy about India’s economic prospects is the result of miscalibrated expectations. When India’s GDP growth surpassed ten percent in 2010, many in
But the public did have some reasonable economic expectations, too, ones set by the government itself: when
But India’s social contract hasn’t panned out as planned. In addition to slowing growth and rising interest rates and inflation, the country has seen the value of the rupee fall by around 20 percent since last summer. The economy can still pick up if the government makes wise policy choices. But
Singh’s reforms also suggested that
Moreover, the government’s commitment to a kind of growth that could serve all Indians has been inconsistent. Rather than create a propitious environment for small businesses, which would boost entrepreneurship and add to India’s economic dynamism and growth,
On the social side, the picture is mixed.
Some have said that the Indian social contract has broken down entirely. They point to the continued Maoist insurgency in the country’s east, farmer protests over government land grabs across
So why hasn’t the government been able to fulfill the public’s hopes? First, politics in
Second, the authority of politicians has eroded considerably. To be sure, they have done an admirable job of keeping democracy going and improving political access among marginalized groups. But they have also been deeply inefficient and self-serving. The public has grown tired of their mismanagement of India’s economy and welfare system. In addition, a series of scandals in 2010 and 2011 — including the sale of telecommunications licenses to political allies, sweetheart deals for construction contracts, and the granting of real estate development rights allegedly in exchange for incredible sums of money — called the integrity of a whole range of institutions, from the courts to the army, into question.
The political leadership, instead of recognizing its failures and working to restore moral order, has evaded responsibility. The Indian National Congress’ top brass, which includes Singh;
The government’s favorite scapegoat for the dysfunction is coalition politics. “The difficult decisions we have to make,” Singh told parliament in March, “are made even more difficult because we are a coalition government.” That means, he continued, that “we have to formulate policy with the need to maintain consensus.” There is some truth to what Singh said. The
The Weakest Winner
Beyond such specific problems, the lack of local leadership means that the party is out of touch with grass-roots movements and demands. For example, it has continually misjudged the intensity of the demands by the population of Telangana, a region in Andhra Pradesh, for its own state, since it has not paid attention to local leader’s voices. Worse, in April, the party even suspended eight parliamentarians from the region for disrupting the parliament’s proceedings by agitating for a new state. Without strong ties to locals, the
The lack of democracy within the
You Say You Want A Revolution?
To be fair to the
In the past, vertical accountability meant that any official in the state was largely accountable to his or her superiors, not to citizens or other institutional actors. But now, government institutions such as the
No government can function without a range of discretionary powers. What matters is how governments justify the use of such powers to constituencies affected by their decisions. India’s officials, preoccupied with keeping their superiors happy, have seldom seen fit to explain anything to the public. Take the recent scandal over the government’s sale of millions of dollars’ worth of cell-phone spectrum to politically connected companies. Indians were not only shocked by the magnitude of the deal; they were also outraged by the fact that the government never even tried to justify its decision not to auction the licenses. In the wake of that debacle, there is immense pressure on
The Indian government has also historically used secrecy to hold on to power. In the past, the public could not easily access information of any kind: government files, statistics, explanations of procedures. Opacity made it hard for citizens to hold the state accountable and was the foundation of state power. That has changed dramatically. The current government’s single greatest achievement in its first term was passing, in 2005, the Right to Information Act. This act gave citizens the right to request information from any public authority, which is required by law to reply within 30 days. The bill was the brainchild of
Finally, power in
The evolution of India’s traditional culture of governance has yet to work itself out. This is a process long in the making, and it will go on for some time. No one in the political class, not in the
The silver lining for the
India’s economic future depends on the country’s politics, and that is both good and bad news. True, India’s politics will often be mired in brinkmanship and inefficiency. But Indian politicians have a remarkable capacity for reinvention. They can rapidly change course when need be, and there is nothing like a crisis to concentrate their minds. It is difficult to imagine that the entrepreneurship
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