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India’s status quo is riskier

by Ramesh Thakur

What is it with some members of the elite among my fellow-expatriate Indians? A group of celebrities (some more than others) has written a strange letter to the left-of-center Guardian (April 11) warning against the election of Narendra Modi as the next prime minister of India. Their complaint is his government’s “role in the horrifying events that took place in Gujarat in 2002″ and his refusal “to accept any responsibility” or to apologize for those anti-Muslim riots.

That they would write such a letter to a British newspaper speaks to their desire for publicity more than political judgment in influencing how the Indian masses vote.

This came on top of the endorsement of Rahul Gandhi over Modi by the even more influential but right-of-center Economist (April 5). It too recounted the same horror story of the 2002 riots, condemned Modi as “a man still associated with sectarian hatred,” and endorsed the Rahul-led Congress as the lesser evil.

Really? Let’s begin with four inconvenient truths:

• Modi has never been charged with actual complicity in the 2002 riots, which occurred early in his tenure as head of the state government of Gujarat, and has been cleared by independent judicial probes.

• Gujarat has remained admirably free of anti-Muslim violence since then.

• Most damningly for this purpose, the anti-Sikh riots in Delhi in 1984, in vengeance for Prime Minister Indira Gandhi’s assassination by her Sikh bodyguards, were twice as bloody and also implicated several Congress Party leaders directly. Has the Gandhi family ever been held accountable, accepted responsibility and apologized?

• The choice is against someone with more than a decade-long track record in favor of a novice and bumbling dynast — based on what exactly?

The party that proudly led the country into independence has been reduced to a self-serving coterie of sycophants, courtiers and court jesters. India’s future would be much brighter with a credible Congress Party; but Congress can have no future without a decisive break with The Family.

Besides, each succeeding generation of the clan since founding Prime Minister Jawaharlal Nehru has been determined to validate the thesis that over time IQ regresses to the mean.

The real indictment against Congress is on two additional counts: poverty multiplication and rampant governance deficits which between them have spawned the insidious and pervasive “structural violence” that has killed millions of Indians and made their life nasty, brutish and short.

Dr. Manmohan Singh was thrust into the prime ministership and given responsibility without power, while the Gandhi family has exercised power for a decade without any accompanying responsibility. “The Accidental Prime Minister: The Making and Unmaking of Manmohan Singh,” an insider account written by Singh’s former media adviser Sanjaya Baru, merely confirms what everyone knows.

The Singh government has been palpably adrift, owing partly to coalition complications, partly to power lying in Sonia Gandhi’s hands while Singh has been prime minister and partly to the anticipated transition from Singh to Rahul Gandhi as prime minister.

In 2004 Congress inherited an economy poised to take off, looked the opportunity firmly in the eye, turned around and walked off resolutely in the opposite direction. Instead of deepening and broadening the program of economic reforms, begun ironically enough when Singh was finance minister in 1991, Sonia Gandhi succumbed to populist impulses. The Ministry of Disinvestment that had been privatizing loss-making state owned enterprises was scrapped. An unwieldy rural employment guarantee scheme to provide 100 days of work for the village poor boosted the fiscal deficit, fed corruption and distorted labor markets. The environment ministry began vetoing major steel, aluminium and real estate projects.

When the courts sided with Vodafone in a $2.2 billion tax dispute, the government, needing to raise revenue for the spiraling welfare schemes, passed a retroactive taxation law — a step guaranteed to drive away some of the most determined investors.

The net result of Congress socialism 2.0 was that the economy stuttered, with the growth rate falling from a high of over 10 percent to below 4 percent. Egalitarian rhetoric masked operational elitism: inequality increased, with a rise in the Gini coefficient (the standard international measure of inequality) between 2005 and 2013. The share of manufacturing and agriculture in GDP fell, the rupee collapsed, and infrastructure creaked and crumbled. India today has the world’s biggest pool of poor, sick, starving and illiterate, and rates poorly on international rankings of human development, business-friendly policies, corruption and other good governance indicators, and even gender parity and child welfare measures.

The Congress government keeps throwing more money at the voters in a desperate effort to buy their votes. Fuel subsidies are worth roughly 2 percent of India’s GDP: the top 20 percent of people capture six times as much benefit as the bottom 20 percent.

This takes money away from priority public spending like physical, educational and health infrastructure and agricultural technology; increases fiscal deficits and distorts investments; and contributes to global warming. Among the worst recent examples, because it will be an economic millstone around the next government’s neck, is the Food Security Act. The 62 million tons of food distribution will cost more than 1 percent of GDP, with corruption and leakage in the public distribution system likely exceeding 50 percent.

These are not the free-enterprise policy settings to promote growth and competitive markets. It is the way to perpetuate India as the sick man of Asia with sovereign rating just above junk status. In Ruchir Sharma’s words, Congress has overseen India’s collapse from “breakout to breakdown nation.”

To echo The Economist’s conclusion: India deserves better.

Sixty years of Congress rule have left India a festering sore on the world body politic. It is not unreasonable that Indians should give Modi sixty months to test if he can deliver on the promise of less Congress-style government and more Modi-style clean and competent governance. The Indian and international cultural elite fears that Modi could unleash uncontrollable sectarian violence. The Indian masses hope he will bring much needed probity, vision and competence to harness India’s underlying structural strengths.

If India’s performance could manage the same trajectory as China’s, its growth over the next decade will have the same stunning regional and global impact that China’s has had over the past decade in reshaping economic and geopolitical maps.

Six drivers of the destiny of nations that will work to India’s comparative advantage over China are: democracy, rule of law, demography, domestic demand, the private sector and civil society. But not with a dynastic, dirigiste, populist, socialist, corrupt Congress.

Ramesh Thakur is professor in the Crawford School of Public Policy, The Australian National University.

  • RameshHeg

    JT moderator, if you don’t want to publish this comment, please at least forward it to Mr Thakur.
    Fantastic write up! The best rebuttal I’ve seen to the enormously loud and well choreographed anti-Modi campaign.
    I particularly liked your IQ comment (chuckles). I’m afraid Rahul’s IQ is not at the mean, but way below mean. My family voted for Nehru- Indira dynasty for three generations. We are done with them. Unless Congress party becomes a genuinely democratic party and stops being one family property it should die a natural death.
    It is very very disturbing to see grown up people, supposedly literary giants demanding Rahul Gandhi should be the next PM. That would be very shameful and a mockery of the ideals of democracy. In a country of 1.2 billion what is his qualification?
    US and UK diplomatically, financially and strategically have sponsored Pakistani aggression on India of wars and terrorism for 67 years. The Guardian and The Economist have been pro-Pakistan in the forefront of this anti-India campaign.

    During the 2008 Mumbai terrorist attack carried out by Pakistani nationals, The Guardian published a column by a leftist extremist Arundhati Roy. The title was “India should look in the mirror”. This article was published even before the blood on the platforms of the Mumbai train station had dried.