Economics

The Bell Tolls for India’s Congress Party

Jul 8, 2012 Jagdish Bhagwati and Arvind Panagariya

There is widespread belief in India today that one of the country's two main political parties, the Indian National Congress, has now run its course and will sink into oblivion. Unlike past predictions of the Congress's inevitable demise, this time the forecast of fatal decline is probably right.

NEW YORK – Politics in Asia’s two giants, India and China, has suddenly turned very uncertain. China remains in authoritarian mode, of course. But egregious human-rights violations and suppression of dissent are raising the specter of growing internal disruptions, particularly in the wake of purges within the top leadership.

By contrast, India, with its firmly rooted liberal democracy, smells to some like roses. But many believe that India, too, faces uncertain political prospects.

In particular, there is widespread belief in India today that one of the country’s two main political parties, the Indian National Congress, essentially run by Sonia Gandhi and her son, Rahul Gandhi, has now run its course and will sink into oblivion. According to The Economist: “The Congress Party…is in a funk” and “in danger of…long-term decline.”

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Jagdish Bhagwati

Writing for PS since 2010
28 Commentaries

Jagdish Bhagwati is University Professor of Law and Economics at Columbia University and Senior Fellow at the Council on Foreign Relations. A renowned expert on international trade, he has served in top-level advisory positions for the World Trade Organization and the United Nations, including Economic Policy Adviser to the Director-General, GATT (1991-93), and Special Adviser to the UN on globalization. He is the author of many books, including In Defense of Globalization.

Arvind Panagariya

Writing for PS since 2010
2 Commentaries

Arvind Panagariya is Professor of Economics and Indian Political Economy at Columbia University.

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Manish Kumar Jul 26, 2012

The Columbia economists have rightly argued that the prospects of the GOP of India, the Congress Party, looks bleak in the upcoming parliamentary elections to be held in 2014. Given their reputation as first rate commentators on Indian political economy it is hard to disagree with their analysis.

India’s economic reforms, kick started in 1991, unleashed the long suppressed entrepreneurial spirit and subsequent reforms under the Vajpayee administration put the economy on a higher growth trajectory. The high growth rates achieved fuelled a revolution of rising expectations. The electorate has come to expect more from its political class.

According to Census 2011, half the country is less than 25 years old, and about 65 per cent is under 35. India’s median age is 25. That is why it has become almost a cliché to talk about India’s demographic dividend. The rapidly changing demographics have been showing its impact on politics and economics.

The voting behavior witnessed in recent state elections further reinforce the thesis put forward by the pro-growth economists, professors Bhagwati and Panagariya, that like in the advanced democracies of the west, the electorate has been increasingly rewarding those with a positive economic performance and hasn’t hesitated in punishing the non-performers.

An editorial, published in one of India’s most respected newspapers, The Indian Express, noted that ‘across classes people are now ambitious and value (economic) prospects over the politics of feelgood and subsidies.’ It further warned the ruling alliance, the UPA (Of which the Congress party is the major player), ‘(to) concentrate on vote getters of modern polity – wealth and employment…economic reforms (was) the only silver bullet the UPA can rely on if it wants to bag another term.’

The country suffers from massive deficits in critical areas like infrastructure, governance and therefore there is an urgent need to expedite the long stalled reforms to keep the Indian growth story buoyant. It must add significantly to its capital stock – health, education, roads, airports, factories – to catch up with more developed economies.

After a surprise UPA victory in 2004, expectations were running high that the highly accomplished economist Prime Minister, Dr Manmohan Singh, who in his previous avatar as Finance Minister in 1991 had helped craft the economic policies that India would go on to implement, would accelerate the reforms bandwagon, speeding at high speed at that time thanks to the pro-market policies of the NDA.

Alas, to the disillusionment of many of the cheerleaders of reforms, the UPA did a shocking U-turn and went on to implement one of India’s most fiscally notorious job guarantee scheme, the NREGA. It failed to carry out any reforms in the last eight years severely denting investor sentiments and growth prospects.

It wrongly believed that the statist ‘inclusive policies’ and pro-poor sloganeering alone were sufficient to win dividends at the ballot box. It practiced the much derided old tools of politics of quota and caste arithmetic to win elections forgetting that India had changed and the key to winning the popular sentiment was to practice the new mantras of ‘politics of aspiration’ and good governance.

Consequently the Congress party has fared badly in most of the elections fought in recent past. The drubbing it received in the UP state assembly elections has dealt a heavy blow to the party with low expectations of victory at the upcoming assembly elections of Gujarat and Himachal Pradesh further hurting its prospects in 2014. The going has already got tough for the Congress party.

The party must understand that in a fast globalizing age dominated by the free flow of ideas and technology (in retrospect how hard it is to believe that social media can instigate and intensify such mass movements as an Arab spring) political dynasties and brand names are fast losing their charm and attractiveness.

The move towards greater democratization, quicker upward socio-economic mobility owing to faster growth and increasing economic interdependence among nations has brought to the fore a burgeoning middle class with vastly different political sensibilities. With growth picking up in erstwhile stagnant regions the contagion is spreading fast thus ever bringing within its fold more people appreciating political and economic freedom.

The concentration of power in the hands of Nehru-Gandhi family with their remote control style of functioning blessing the sycophants and hurting the rare challengers, absence of merit based system of nurturing young leaders, failure to facilitate the growth of regional leaders and their true empowerment are some of the challenges facing the Congress party. These need to change before it’s too late.

India is not willing to trade the ideals of economic freedom and free markets for the false bait of economic inclusiveness that the Congress has been promising without delivering.

Indians are yearning for better economic opportunities that only economic reforms can bring. They are the best antidote to India’s economic woes. The writing on the wall is clear for the Congress party – reform or perish in 2014!
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P. Kamath Jul 11, 2012

The Bell Tolls for India’s Congress Party ;

What can any expect about the fate of the Congress Party? This party has such a wonderful history of 137 years with a string of great patriotic men and women of such high moral strength and public dedication. Of course million others who were less known people in the bygone decades should not be forgotten either.

But what happened during the captaincy of this prime minister? All you see is this ghastly corruption which is corroding the entire society with the moral rot. The prime minister has turned out to be so impotent not saying one word about corruption among his own men in the cabinet.
Take a hard look at the man1 he is old, tired, weak, slow in speech and thinking.

Time for him to go and let Indians think of the 'tomorrow" tomorrow.
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chinmay krovvidi Jul 11, 2012

There is little doubt that Congress party is in decline.It has thoroughly mismanaged the country the result of which is being now seen in the slow down of economy.The fact of the matter is that even under congress rule what ever little was achieved was due to Prime Ministers not belonging to the Nehru-Gandhi family like Narasimha Rao and ManMohan Singh.But to say that is going to become defunct may not be correct as it still commands a committed vote-bank.Indira converted a genuinely democratic party into her pocket purse which spanned many bad trends like dynastic politics, bureaucratic corruption etc.If congress is being rejected it should be welcomed.Hope some one decisive like NARENDRA MODI becomes PM in 2014 to set things right.But for that to happen electorate should decisively vote for the other national party BJP and not some kichidi alliance of Third Front
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Carolin Maney Jul 11, 2012

While I can see why the INC is at a disadvantage for the 2014 elections, I am not convinced that the 2014 elections will spell the death of Congress. Besides I'm not sure if the BJP can necessarily solve the problems that the nation is facing today. It would be a shame if any party came into power just on the basis of dissatisfaction with the incumbent government (though I'm aware that happens quite often). I would not mind the INC or the BJP coming into power as long as they have truly reevaluated their leadership and what they can offer to solve regional and national problems facing India.
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rajiv anand Jul 11, 2012

God help us if congress comes back in 2014, a possibility given the options. A victory in 2014 will be vindication for the Gandhi lady that a welfare scheme led politics is the right way, so what if it is bankrupting the economy,so what if it is killing productivity in the economy. This is a situation that will kill the Indian growth story at least into the medium term.
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Jitendra Desai Jul 10, 2012

It is no longer a party.It is a cabal.And hence better that it disappears.Its disintegration was started by late Mrs Indira Gandhi and her kitchen cabinet in late sixties.Since then Congress has mutated in to so many outfits [ Eg CFD,TMC,NCP,Bengal Congress...] It will be Mrs Sonia Gandhi who could be overseeing its ultimate demise.It was the bankruptcy of Congress , that it had to rely on a widow of foreign origin with no political background to lead a party ,that was once led by Mahatma Gandhi and Sardar and Nehru.It is a fall which will be good for the country.Amen.
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Alok Shukla Jul 10, 2012

It would be very easy to comment on the basis of the facts provided however it seems the Indian Voters are completely confused which is leading to the formation of Khichdi Govt. at the Center. This is the underlying reason for complete inaction at the policy level. The voter needs to deliver a clear verdict and needs to have clear understanding of what is good at state level may not be good at federal level. Hence voter needs to deliver a clear mandate whether it is Congress or BJP or some other party.
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Kevin Lim Jul 9, 2012

All well and good, but who will fill the void. Is there a moderate, economically liberal party in the wings we havent heard of ready to fill the vacuum? Or is it more likely that the BJP will exploit Congress's weaknesses (once it overcomes its own infighting) in the next election. I certainly hope not - it speaks poorly of India if one of the architects of the Uttar Pradesh race riots becomes the next PM
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