Sluggish start for India's leader
After a year in office, reformer Manmohan Singh has been unable to push the economy to new heights.
By Scott Baldauf | Staff writer of The Christian Science Monitor from the May 23, 2005 edition
NEW DELHI - When Manmohan Singh came to office as India's prime minister a year ago, there were high expectations that this architect of the recent boom times would be able to engineer even greater economic miracles. Surely, the former finance minister who first opened India's economy would sweep away bad regulations, invite more foreign investment, and turn the elephantine Indian economy into a racehorse. Or so the thinking went.
Today, some observers say, Mr. Singh's greatest achievement may be simply staying in office.
Surrounded by leftist coalition supporters who oppose almost every economic reform, and right-wing opposition parties who refuse even to attend parliament, Singh is an isolated figure. Economic growth has not shot up, but hovered just below 7 percent. Modestly, Singh himself gives his government's first year a barely passing grade of six out of 10.
In recent times, India has begun to see itself, like China, as a future regional powerhouse. The prime minister's ability to deliver a high-growth economy is seen not only as important for lifting millions of Indians out of poverty, but for India's international goals as well.
"Competing with China will require more than simply playing with the economic levers of growth," says Sumit Ganguly, director of the India Studies program at Indiana University in Bloomington. "It will involve bureaucratic reform - despite changes, the bureaucracy still remains slothful, elitist, and mostly unresponsive. It will also involve getting more serious about improving India's infrastructure."
Mr. Ganguly expects that Singh will do more in the remainder of his term, but in an incremental fashion. "His task, given the crew that he has, and the parliamentary constraints he faces, will be to simply stay in office, nudge and push where he can, and live to fight another day." Modest successes
To be sure, the first year of a Congress-led government was not without successes. Indian relations with the United States have continued to improve, and India has warmed up relations with two of its fiercest rivals, Pakistan and China. Minor economic reforms, such as a new value-added tax, have been imposed to simplify tax collection, and the Singh government has opened up new sectors to foreign direct investment.
Yet from economists and political observers alike, Singh's first year in office has been greeted with varying degrees of disappointment.
Shankar Acharya, a friend of Singh, and now an economist at the Indian Council for Research on International Economic Relations in New Delhi, says that Singh's greatest weakness is that he relies on a coalition of leftist and secular parties, many of which are completely opposed to the economic reforms Singh was expected to deliver.
Referring to the ruling coalition's agenda for its term of office, Mr. Acharya wrote recently, "The Common Minimum Program has been a fertile breeding ground for many bad ideas. With profound sadness, I have to record that Bad Ideas seem to be trouncing Good Men." 'Bad Ideas' dodged
The good news, reformers like Acharya say, is that few of the ideas in the Common Minimum Program - including guaranteed employment for 100 days, affirmative-action programs for India's lower castes in the private sector, and canceling or delaying the sale of state-owned enterprises - have come to fruition.
The bad news is that the pace of economic reform remains slow, making it difficult to generate new jobs and to improve the lives of the poor and rural voters who elected this government to office.
Yet, there are signs that Singh's honeymoon with the people is continuing. In a public opinion survey by "The Week" magazine, 73 percent of those surveyed said they had benefited either somewhat or greatly from economic liberalization. More than 66 percent of those surveyed credit Singh, in his 1991 - 92 term as finance minister, for starting liberalization and boosting the economy from the days of 3 percent growth.
"I think the prime minister is being modest when he gives himself 6 out of 10," says Gen. V. R. Raghavan, director of the Delhi Policy Group, a security think tank. "He is not the sort of man to build himself up, and that hurts him a bit in this media age. The kind of reforms that he is proposing take time to implement, and for their effects to be felt. I would grade him higher."
Ironically, Singh is getting more applause these days for his efforts in foreign relations.
Last month, Singh met Pakistani President Pervez Musharraf in New Delhi - during the two nations' month-long cricket series - and agreed to continue peace talks over the disputed province of Kashmir. Singh also met for the first time with Chinese Prime Minister Wen Jiabao in Delhi, where the two nations agreed to begin talks over border disputes, and to explore new trade links and greater economic cooperation.
In addition, Singh continued a decade of warmer relations with America. India's military appears ready to buy major weapons systems from the US, including F-16 fighters, and India's business sector is opening up to foreign investment. At present, Singh's government is looking at 37 new major proposals for foreign direct investment. The proposals involve investment in 13 public-service utilities including electric power generation plants, as well as dozens of road and irrigation projects.
On the economic front, Singh has dispatched his petroleum minister, Mani Shankar Aiyar to Pakistan and Iran to speed up agreement on a series of new natural-gas pipelines, in a bid to guarantee an ample supply of energy to keep India's industrial economy booming in future years.
Ganguly says that Singh also deserves credit for restoring some measure of harmony between the nation's restive Hindu majority and its many religious minorities, including Muslims and Christians.
"Singh deserves credit for a dog that has not barked," says Ganguly. "Notice the marked absence of communal violence and tension in the country. This is hardly accidental. I believe that state power can contain and limit communal violence." State election ahead
Yet critics say that Singh and his government will have to do more to modernize the economy, encourage the creation of new private-sector jobs, and to invest in new roads, or else they may face a backlash from voters in upcoming state elections in the coming months.
"Our daily life has become just a little worse in the last 12 months - whether it is in the form of worse roads, worse water and electricity supply, or even worse tourist facilities," wrote political analyst T.V.R. Shenoy in the Indian Express. "Another four years of this and we can bid farewell to the twenty-first century as we slide inexorably into a grimy past."