INDIA POST ELECTIONS 2009: SOME STRAY THOUGHTS

Please apologize for what may come across as stray, unconnected thoughts with shallow logic. But these thoughts came to my minds and I must put them in words immediately- because:

It has been over a month now since I have posted anything new on this site. It was a busy past one month. The Indian general elections and then its results and the government formation, all these kept me mostly glued to the television or busy reading pros and cons and analysis offered by various political commentators, observers, editors and television anchors, candidates, and party spokespersons, both between the five phases of the elections and after the results were known. The world’s largest democracy chose its government through an exercise so mammoth in size that the world watched in amazement and adulation. The final mandate that surprised – and proved wrong - one and all was for the continuation of the Congress-led, Manmohan Singh-headed UPA government. It was not an overwhelming mandate but still strong enough to give the government enough leeway to be able to implement programs and policies envisaged in the Congress pre-poll manifesto.

While one of the longest and most complex democratic exercise was underway in India, so many things were happening within and outside reminding us of challenges lay ahead.

India must meet these challenges by taking some firm bold steps whether it is in the area of foreign policy, dealing with neighbors, economic reforms, poverty alleviation, health or education. There is no time to waste now.

Our neighborhood is in turmoil posing concerns for our security. Afghanistan continues to be unstable. Pakistan is fighting the scourge of terror and the threat from Talibans. Nepal plunged into political instability after its Maoist prime minister resigned following his controversial move of removing the army chief backfired. Lanka fought a pitched battle to extinct the LTTE and its top leadership amidst growing international clamor of human rights violation alleged to have been committed by the Lankan army. China is steadily expanding its influence in Nepal, Bangladesh and Sri Lanka by providing military hardware and training to each one of them. In a strategy to encircle India, it has been investing in the Gwadar port project in Pakistan and Hambantota port project in Sri Lanka. It is developing base in the Coco Island in Myanmar with Bangladesh offering access to its Chittangong port to Chinese navy. Before it is too late, India must act fast to counter Chinese aggressive policy to win friends in South Asia away from India. Immediate thing I can think of is to make unilateral gesture of withdrawing troops from along the border with Pakistan. It will be seen as a move of support in time of Pakistan’s need. It will give Pakistan confidence that while they are fighting Talibans, it doesn’t have to worry about its contiguous backyard with India. India can also offer whatever support is required to fight the Taliban, whose containment is also in India’s security interest. These moves will put China on the back foot and show India as a responsible power in South Asia.

The Indian economy has posted growth of 6.3 % for 2008-09. As rupee has gained over dollar recently, India is once again a trillion dollar economy. The stock market showed bullish recovery in May although the index fell by 438 points yesterday. But overall, the mood is positive in the stock market. Auto sales registered 9% increase in May. The interest rates on home loans are again below double digits. But let us not get lured into slumber by these indicators. Consider the following to realize that all is not well. India’s exports have been declining for last seven months. According to some sources in the export sector, an estimated 1.5 million workers have been laid off in past months. Although banks have relaxed some of the stringent norms it had introduced amid fears of recession and have lowered interest rates, thereby creating a positive feedback cycle, businesses and consumers still find rates high and norms discouraging. The combined budget deficit of the states and the center is hovering around 11-12 percent. The government is committed to expand existing and introduce new welfare schemes. This will entail increase in social spending which will require government to generate material resources without further ballooning budget deficit. The government is mulling disinvestment to raise funds. With the left parties - the biggest obstacle for disinvestment policy- out of the way, one would tend to think that it would be doable. But hold on, it may not be easy. The concerns have already been raised by some quarters in the ruling coalition. DMK MP Konimozhi has already expressed opposition to disinvestment route just as Mamta Banerji, Trinamul leader and railway minister, has expressed her discomfiture for disinvestment in public sector enterprises. The Parliamentary Standing Committee on Commerce led by BJP MP Murli Manohar Joshi has called for a ban on domestic corporations and foreign direct investment into retail trade of grocery, fruits and vegetables. So the task for the government to push for more economic reforms, open up more sectors more widely for foreign direct investment or implement disinvestment process of its public sector enterprises is not going to be easy. But the government will have to muster courage to take these steps in order to fund much-needed social spending without affecting its financial health.

So the new government has a plate full of urgent things to accomplish to usher India from an electoral successful democracy to a functional democracy that provides for every section of society equal opportunity and access to quality education, healthcare, drinking water, and basic sanitation and which ensures equitable, inclusive and sustainable economic growth. It is the only path to becoming a major power and rid our politics of corruption and criminals.