The UPA II: Looking back, looking forward

In the late spring or the early summer of 2014 India will conduct its sixteenth general election. The battle lines between the two principal, national political parties, the Indian National Congress (INC) and the Bharatiya Janata Party (BJP), are now being drawn.  The Congress is counting on the scion of the Nehru-Gandhi family, Rahul Gandhi, to lead the party, despite his limited political experience. In considerable part, their reliance on Rahul Gandhi reflects the lack of alternative, viable leadership from within its ranks. The BJP has pinned its hopes on Narendra Modi, a charismatic, if highly controversial, chief minister of the western Indian state of Gujarat.

These personalities aside, the campaign, thus far, has been mostly lackluster and has been marked with the exchange of much personal invective. Apart from Rahul Gandhi’s status as the heir to the Nehru-Gandhi political lineage, the Congress is hoping that the raft of welfare measures that it has enacted during its time in office will win favor with substantial portions of India’s electorate who remain mired in poverty. The BJP, on the other hand, has attacked the Congress for the highly publicized corruption scandals, for not adopting a tougher stance toward India’s long-standing adversary Pakistan and for its inability to fashion a coherent national policy to deal with periodic neo-Maoist violence that has wracked several states.

Beyond these issues, though neither party has an exemplary record on the matter, the Congress and some of its stalwarts have periodically attacked the BJP for its anti-secular outlook and record. The BJP, in turn, has made more than veiled hints that the Congress is merely pandering to India’s largest religious minority, Muslims. Unfortunately, at a time when the country faces serious economic problems and confronts important foreign and security policy challenges, neither party has managed to sketch out a well-articulated political platform for the forthcoming elections.

Background: Promises and Troubles

When the United Progressive Alliance (UPA) regime, led by the Congress, assumed office in 2009 for the second time it had several apparent laurels to its credit. It had successfully fashioned a major welfare scheme, the Mahatma Gandhi National Rural Guarantee Act (MNREGA) in 2005, significantly restructured its relationship to the US by successfully negotiating the US-India civilian nuclear agreement the same year[1] and economic growth, after having faltered a bit in the earlier year, had managed to clock a respectable 7.4 percent in 2009, leaving the country with the second fastest growing economy in the world.[2]

At a political level, Prime Minister Manmohan Singh, had also appeared to have secured his footing in the wake of his deft handling the US-India civilian nuclear agreement despite the defection of his Communist coalition allies over the deal.  Furthermore, the Indian electorate had rewarded the Indian National Congress, the principal party within the coalition, with as many as 206 out of 545 seats. Consequently, though part of a coalition government yet again, the Congress was now more safely ensconced in office.

The hopes that the Indian electorate had reposed in the UPA II, however, soon started to dissipate as various problems quickly came to the fore. In 2010 even as the preparations for the nineteenth Commonwealth Games (CWG) in New Delhi were under way the government faced harsh criticism from a host of quarters but most notably from members of India’s civil society. The charges related to malfeasances involved in the handing out of contracts for services, products and infrastructure related to the CWG. [3]

Shortly before the eruption of the CWG scandal the government had already come under attack from civil society activists owing to the apparent involvement of elements of the Congress government in Maharashtra in a corrupt housing deal which saw land transferred for a commercial residential development benefiting key bureaucrats and well-heeled politicians when it had been intended for the widows of military personnel. [4]

The government was already reeling with these corruption charges when a far more significant scandal rocked it. This stemmed from the Comptroller and Account-General (CAG) of India’s report that there had been widespread abuse in the auction of second generation mobile phone licenses to private telecom companies. Most disturbingly, the report asserted that the Indian exchequer had purportedly lost as much as $38 billion owing to a lack of transparent and fair rules in the allocation of the spectrum.[5] The response from the regime was predictable; its members argued that the methods that the CAG had used were flawed and that there was little or no loss to the treasury.

Despite the government’s efforts to stonewall any further investigation including a Joint Parliamentary Committee (JPC) inquiry, the then Minister for Communications, Andimuthu Raja was forced to resign from parliament and formal charges were brought against him.

The misallocation of public resources to the private sector once again erupted in March 2012. This time it dealt with the flawed allocation of significant numbers of coal blocks to private companies without a competitive bidding process resulting in an estimated loss of $160 billion to the Indian exchequer. Most significantly, this process had taken place when Prime Minister Singh, who is otherwise known for his probity, was in charge of the coal portfolio.[6]

This spate of scandals that haunted the UPA regime, not to mention others that would soon burst forth, were somewhat ironic given that at the 83^rd plenary session of the Congress held in December 2010, Sonia Gandhi, the party president, had made fighting corruption the centerpiece of its agenda. To that end she had designated a Congress stalwart, Pranab Mukherjee to chair a committee of a group of ministers to implement this initiative. It remains an open question about how sincere this effort was in the first place as after an initial meeting it accomplished little.[7]

The sincerity of the Congress to undertake steps to curb corruption may well be debatable. However, there is little or no question that the issue caught the attention of significant segments of the Indian middle class in the summer of 2011. The catalyst for this middle class mobilization was the decision of a social activist, Kisan Baburao Hazare, popularly known as Anna  (“elder brother”) Hazare, to launch a public protest against an anti-corruption bill in parliament. In his judgment, the legislation under consideration was much too anemic. Accordingly, he was prepared to resort to a public fast to induce the government to make suitable changes. In the end, after much wrangling and a brief period of incarceration for Hazare, the bill was passed in December 2011 but without the sweeping changes that he and his associates had sought.

The question of corruption apart, the government also faced much understandable criticism in the wake of a massive power failure that afflicted as much as 600 to 700 million individuals in the summer of 2012.[8] However, in its wake the Minister for Power, Sushil Kumar Shinde, brushed off any criticism of his performance in office.[9] Shinde’s apparently unconcerned attitude toward the plight of nearly half the country’s population appeared to underscore the lack of the regime’s sensitivity toward critical failures of public policy. More to the point, it also highlighted that despite an awareness of the need to address critical infrastructural bottlenecks to economic growth the regime was manifestly incapable of making them a priority.

Limited Achievements

The issue of corruption, at practically the highest levels of government, has obviously dogged the second incarnation of the UPA. To compound matters, the intransigence of the Opposition, most notably the Bharatiya Janata Party (BJP), has hobbled the regime from making much progress on a host of pressing domestic policy issues. Nevertheless, it made fitful progress on some fronts.

Some of these were in the social and infrastructural sectors while others dealt with the continued liberalization of the Indian economy. Two significant pieces of legislation, the actual outcomes of which remain uncertain, are nevertheless worth a discussion. The first was the Right of Children to Compulsory and Free Education Act of 2010. The goals of this act are nothing if not ambitious. Under its terms every child between the ages of six and fourteen is guaranteed a free, compulsory education, 25 percent of seats in all private schools are reserved for students from the “disadvantaged sections” of society and that the failure of schools to implement the terms of the act would result in financial penalties.[10] How this legislation is actually implemented across India’s federal system with states of varying institutional capacity, of course, remains to be seen.

The other important achievement of the regime in this arena involved the passage of the National Food Security Act in 2013. The legislation is of importance because if properly implemented it would provide a specified quantity of food to about two thirds of India’s population at subsidized prices. The timing of this legislation is obviously blatantly populist and with an eye firmly focused on the general election of 2014. It is, however, extremely difficult to predict whether or not the passage of this sweeping legislation can actually result in improved electoral prospects for the UPA.

One of its achievements in the arena of economic reform, though limited, involved the passage of legislation that made possible the entry of multi-brand retail into the country. This was a significant political accomplishment because the legislation had garnered much opposition from a variety of quarters. Among other stipulations any firm would have to invest at least $100 million, source at least 30 percent of its products from a domestic small-scale industry and could only operate in cities with a population of a million or more (the last requirement was subsequently relaxed under a new set of guidelines issued in 2013). Given the restrictions on the operations of multi-brand retailers it is far from clear that substantial numbers are likely to swiftly enter the Indian market. [11]

In addition to tackling the long-standing issue of multi-brand retail the regime managed to pass a legislation that finally addressed the vexed issue of land acquisition for public purposes. The original legislation had harked back to the colonial era and had been passed in 1894. The new legislation, according to some informed observers, constituted a landmark of sorts in terms of ensuring fair compensation for those who would be affected as a consequence of a land acquisition process. On the other hand, it also needs to be noted that the legislation has come under criticism from the domestic business community and from potential foreign investors. To varying degrees they argue the new rules are extremely onerous and will dramatically drive up the cost of land acquisition.[12]

Also, after nearly a decade of debate and discussion the government managed to pass a pension reform bill in September 2013. Its provisions will allow foreign direct investment up to 26 percent in this sector. Quite predictably the left wing parties opposed this passage in both the Lok Sabha (lower house) and Rajya Sabha (upper house). Their opposition was hardly surprising. Much of the ideological left in India still views the entry of foreign capital into India with much distrust. In their view most foreign investment is likely to result in the exploitation of India’s resources, its workforce and is unlikely to contribute to the overall wellbeing of the population. [13]

Confronting a Troubled Neighborhood

Issues of economic and social policy, for the most part, determine the fate of India’s national elections. Nevertheless, relations with key countries in South Asia, on occasion, have played important roles in affecting the electoral fortunes of both political parties as well as national coalition regimes. In this context, despite current political quiescence within the Indian-controlled portion of the disputed state of Jammu and Kashmir a series of incidents along the Line of Control (LoC), the de facto international border, during 2013, have become political fodder as the 2014 election looms.[14] Most Indian commentators argue that the border incidents stem from Pakistani provocations. More to the point they argue that these acts constitute signs of a renewed emphasis on promoting discord along the border. They also contend that these events reflect the Pakistani military establishment’s interest in preventing any prospects a rapprochement between India and Pakistan under the aegis of a new democratically elected regime in Pakistan. [15]

The BJP’s prime ministerial candidate, Narendra Modi, who is known for his tough stance toward Pakistan, can be fairly well counted upon to dwell on relations with Pakistan as the general election draws closer. If incidents along the LoC continue apace and the UPA regime fails to adopt a firm, if not aggressive, stance toward them Modi may deftly portray the government as being weak and indecisive in its dealings with India’s long-standing adversary. Among some segments of India’s electorate, especially those in northern India, who pay greater heed to Indo-Pakistani relations such a stance may well have adverse electoral consequences, even if only at the margins, for the Congress and the UPA.

The differences over how best to deal with Pakistan and its provocative behavior is not the only foreign and security policy issues that could have electoral consequences in 2014. The treatment of the Tamil minority in Sri Lanka, especially in the aftermath of the end of the civil war in 2009, has had considerable resonance within the internal politics of India’s southern state of Tamil Nadu. The UPA regime’s ambivalent outlook on how best to deal with Sri Lanka has irritated significant segments of the Tamil population in the state. Consequently, the choices that the UPA regime makes in the upcoming months toward Sri Lanka, especially if the Mahinda Rajapaksa regime continues to show scant regard for the concerns as well as the rights of its Tamil population, could further erode the limited support that it enjoys in Tamil Nadu.[16]

Economic Woes and Political Leadership

In the late summer and early fall of 2013, India’s economy went into a tailspin. The sources of its economic woes were obviously manifold and some quite deeply rooted.[17] However, much of it stemmed from a seeming inability of the regime in New Delhi to take meaningful steps toward a second generation of long-delayed market reforms, the concomitant flight of foreign investment, the adverse effects of global energy prices and the consequences of the United States Federal Reserve bank to follow a policy of tapering. [18] Since then, following the appointment of a noted University of Chicago professor of finance, Raghuram Rajan, as the head of the Indian Reserve Bank, the Indian rupee has recovered some lost ground against key foreign currencies, investor confidence has grown and a few modest banking reforms are now in the offing. However, the inflation rate continues to hover around seven percent and growth is not expected to exceed 5 percent this year. Indeed the anemic growth rate has dashed the hopes of many in India’s newly emergent middle class as economic opportunities have shrunk dramatically over the course of the past year.[19]

There is little or no question that this economic slowdown will have an adverse impact upon the political fortunes of the UPA. Combined with the country’s economic troubles the paucity of political leadership within the Congress is also bound to unfavorably influence its electoral prospects. The scion of the Nehru-Gandhi family, Rahul Gandhi, whom the Congress has chosen to repose its faith in has already demonstrated his lack of political acumen and ability to generate much support on the campaign trail.[20] Though apparently surrounded with able and well-qualified advisers he appears to lack much empathy of Indian voters, cannot address them in an idiom that holds much appeal and most importantly has not initiated policy reforms of the slightest consequence. It is therefore extremely difficult to conclude that he will be able to miraculously acquire a persona in the few months before the upcoming elections that will reassure India’s increasingly sophisticated electorate that they should yet again rally around the Congress. Reliable polls are scarce but thoughtful analysts suggest that the diminishing stature of Prime Minister Manmohan Singh, the lack of obvious enthusiasm for Rahul Gandhi and the tarnished reputation of the party thanks to the many allegations of corruption are all bound to have a sandbagging effect on its electoral prospects. All the Congress and the UPA can bank upon are the vast populist schemes that they have managed to push through in the past several years.[21]

Apart from relying on the potentialelectoral popularity of their many welfare-oriented policies the Congress and the UPA may take some comfort from the BJP’s lack of a viable alternative set of policies. Narendra Modi may well enjoy a degree of charismatic appeal, his technocratic orientation may hold some allure with India’s business communities, and others may simply see him as a more seasoned politician than Rahul Gandhi. However, whether these attributes alone in the absence of a set of clear-cut programmatic alternatives to the UPA’s welfare-oriented gestures could lead a complex, astute and diverse electorate to cast its lot the BJP still remains an open question.