In a few days the 16th Lok Sabha will be prorogued and the UPA’s – basically the Congress’– ten year reign will come to an end. With that will end the most tragic period in independent India’s history. Tragic not because any catastrophe has befallen the nation, but because during this period Indians got a brief glimpse of affluence, a brief taste of global respect, and a brief view of a more secure future, only to have all three snatched away from before it ended.
This is not India’s first lost decade. There was another between 1965 and 1974. But that was triggered by events outside the government’s control – two successive droughts in 1965 and 1966 and two wars in 1962 and 1965. The Indira Gandhi government’s response deepened the economic crisis these caused and slowed down growth even further, but it was not responsible its onset.
In sharp contrast, most of the wounds of the past decade have been self –inflicted. In 2004 Atal Behari Vajpayee’s government bequeathed to the UPA a country whose economy had just recovered from a five year recession and recorded an 8.1 percent rate of growth in 2003-4, the highest the country had known. It had demonstrated India’s nuclear weapons capability, weathered the storm of sanctions the world had unleashed upon it, forced the US into its first serious dialogue with India, and made it rethink its policies towards Pakistan and Kashmir.
It had pushed through Kashmir’s first truly free and fair election in 2003, in the teeth of universal scepticism, a Hurriyat boycott, and determined opposition by the National Conference, and shown Kashmiris that they could make Indian democracy work for them. It had decisively won the Kargil war and, two years later forced Pakistan to reconsider and all-but-abandon its proxy war, using ‘non-state actors’, against India. It had then held out a hand of friendship to Pakistan in 2003, symbolically from Srinagar.
It had signed the Islamabad agreement with President Musharraf in January 2004, brought lasting peace on the LOC in Kashmir and begun the detente that led to the almost consummated Manmohan-Musharraf Delhi Agreement on Kashmir in 2005.
In the realm of economic policy it passed the Fiscal Responsibility and Budgetary Management Act and reduced the Centre’s fiscal deficit to 2.5 percent of the GDP before handing over to the UPA. It halved interest rates between 2000 and 2003 and set off the boom in the stock market that continued, almost without interruption, till January 2008.
All that the UPA had to do, when it came to power was build upon the foundation that Vajpayee and the NDA had built. It began well, but then gradually allowed everything to fall to pieces. In its relations with Pakistan, it dragged its heels over negotiating the details of the four point plan for settling the Kashmir dispute, ignoring warnings that Musharraf was losing power within his own country, till the Judges crisis took power out of his hands altogether. It also came close to settling decades long disputes with Bangladesh over the Ganges basin waters and the demarcation of the border, but then failed to live up to key commitments, leaving Sheikh Hasina’s Awami League government vulnerable to attacks from the BNP and the Jamaat-i-Islami. It persuaded the Maoists in Nepal to rejoin the mainstream of democratic politics but inexplicably withdrew its support from them just when their moderate, pro-India, leader Prachanda needed it most.
In 2013, when Prime Minister Manmohan Singh pulled out of the Commonwealth Heads of Government meeting in Colombo, he humiliated the Sri Lankan President Rajapakse and severely damaged a relationship with Sri Lanka that had taken more than a decade to rebuild after the IPKF debacle. In order to appease Tamil nationalist sentiment in Tamil Nadu, he threw away the considerable capacity India had built for influencing Colombo’s policy towards its Tamil minority.
India’s two year tenure of a non-permanent seat in the UN Security Council was perhaps the most undistinguished of any in the post cold war period. Its hallmark was an unending search for ways to avoid taking a stand on key international issues that would offend the US, Europe, and the Islamist sheikhdoms of the Arab world. At a time when these countries were launching unprovoked wars upon sovereign members of the United Nations and thereby destroying every pillar of the UN charter upon which a multi-polar world order could be built, India never once voted against them. Instead it abstained in the Security Council as they planned their assaults upon Libya and Syria, and voted with them on non-binding general assembly resolutions to show that they did not need to take its abstentions in the Security Council seriously. It justified this to itself by claiming that it was taking a ‘balanced’ position when balance was the last thing that a world headed for chaos needed from a large, rapidly growing and uncommitted middle power.
Within the country it came within a hairsbreadth of ending the deep alienation in Kashmir, but then took a series of decisions, starting with the crackdown upon Kashmir in August 2008 and ending with the surreptitious hanging of Afzal Guru, that made it infinitely deeper. As if that was not enough, after having made a catastrophic mistake in promising separate statehood to Telengana, it did not have the courage to admit it, and rammed the division of Andhra through the Lok Sabha after throwing its opponents out of the house in the last days of its last session when it had already become a lame duck government.
But none of these failures has come close to matching its ruin of the economy. In 2004, the Congress inherited a nation was growing at more than 8 percent. Today that growth rate has slipped well below 5 percent. Industrial output grew by 8.4 percent in 2004-5 and rose to 13 percent in 2006-7. In April to December 2013 it contracted by 0.1 percent. Non–agricultural employment has been the main casualty. According to the 66th round of the National Sample Survey, this grew by more than 37 million between 2004 and 2009. A partially overlapping set of data collected by the ministry of Industry shows that between April 2008 and March 2013 it rose by only 2.3 million. This suggests that more than 30 million job-seekers failed to find jobs. Another, more recent, survey by the NSO has shown that rural womens’ employment has also fallen by 9.1 million.
Indian industry has taken a terrible beating. Relentlessly high interest rates have ensured that there has not been one IPO ( Initial Public Offer) of shares in the last four years. Instead large industrial houses have been moving their investment in what a Singapore based industrial consultant described as ‘a Lemming –like rush’ to Indonesia, Thailand, Kazakhstan, Uzbekistan and elsewhere.
India’s road, rail and power infrastructure remains as starved of investment as it was a decade ago. Today not only are its bottlenecks even more forbidding to foreign investors than they were in the 1990s, but these have become the biggest hurdle to the diversification of agriculture out of cereals into high value fruit and vegetable crops. A simultaneous liberalisation of exports of the latter, under the mistaken impression that the free market cures all evils, has fed food price inflation and kept the cost of living index rising by more than ten percent a year for the past four years. This combination of joblessness and a relentless, supply side, inflation has created the mounting sense of insecurity that has proved the Congress’ undoing.
All this has happened not because the government was corrupt, or short-sighted, or sold out to the industrialists, but because of weakness and ineptitude. Nowhere has this been more apparent than in its attempt to achieve ‘inclusive development’. In the last decade it has quadrupled the annual expenditure on rural development and social welfare. There are now more than 80 schemes under which the rural poor have a right to the largesse of the State. But India has slipped down three places in the UN’s Human Development index.
Within the nation the balance of power between centre and states has tilted so far towards the latter that India is beginning to look dangerously like it did under the later Mughals. The UPA has enacted statutes on tribal welfare and land acquisition that predators in the state governments have contemptuously ignored or circumvented. It has enacted Rights to Food, Education and Employment that have built a permanent deficit into the central budget and will bankrupt the treasury.
It has set the dangerous precedent of allowing Mamta Bannerjee, a state chief minister, not only to sack a central minister but also choose his successor. As if that were not enough it has allowed her to veto an international agreement with Bangladesh over the sharing of the waters of the Teesta river. Today, as the Coalgate scam showed, there is hardly a central subject left on which the centre feels it can act without first securing the assent of the states.
The Congress is not solely responsible for this all-round deterioration. In India’s relations with its Pakistan, for instance, the weakness of governments in Islamabad is at least as much to blame. In an era of coalition governments it is also a moot point how far any central government could have kept the states in check. But there is one common thread that runs through all the changes described above for which the Congress party is solely to blame. This is a lack of statesmanship, and of decisive leadership, at the epicentre of government. This has given India a dysfunctional government.
In the last two years it has become fashionable to say that UPA-1 ruled well and to heap all the blame for its ineptitude after 2009 upon the prime minister, but the real damage was done when Mrs Sonia Gandhi led the Congress to victory in 2004, but then created a dyarchy by refusing to become the prime minister and appointing Dr Manmohan Singh in her place. Although she did this with the best of intentions the confusion it created in decision-making sowed the seeds of the ineptitude that has virtually paralysed the government in recent years.
This has made the last decade one of good intentions betrayed by sloppy implementation and oversight; of promising starts seldom carried to fruition, of opportunities missed and challenges ignored. In 2008 the Congress party almost buckled under the pressure of its ally, the Left Front, and decided to let go of the Indo-US nuclear deal rather than risk its withdrawal of support. Only late in the year, when President George W Bush’s tenure was about to end, did it muster up the courage to call the Left Front’s bluff. By then it was almost too late to get the 44-nation Nuclear Suppliers’ Group to accept the deal. It was only Bush’s tireless calling in of favours that made the NSG lift its embargo on the supply of dual use technology to India.
At the BRICS’ Delhi meeting in 2012 India joined Russia and China in strongly criticising NATO’s intervention in Libya and Syria, but failed to vote with them in the Security council. In the same year Delhi could not prevent Dinesh Trivedi from resigning as railways minister when Mamta ordered him to do so, but it could have made it clear to her that it would cost the Trinamool Congress a seat in the cabinet.
In September 2012, when RBI governor Subba Rao refused to heed finance minister P Chidambaram’s agonised pleas to lower interest rates after he had effected cuts in subsidies that would reduce the central and state deficits by around Rs 100,000 crores in a full year, the prime minister should have sided with his finance minister and forced the RBI to fulfil its tacit promise of July. Instead he did nothing and succeeded only in deepening the recession in industry.
In the end the decision-making vacuum at the Centre has consumed the Congress itself. Six years of relentless belt tightening, with only a small break at the onset of global recession, has given the poor neither growth nor price stability. It is their rage at being cheated of a future that the Congress has begun to feel today.
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