NEW YORK – The Congress Party’s unexpected landslide in India’s general election was greeted with euphoria. Many believe that Congress – with its commitment to secular values, economic growth, and helping the poor – now has a mandate to transform India into a great power. Business and financial interests, in particular, are delighted with the outcome, crowing about the bonanza about to be unleashed as Congress liberalizes India’s economy further.
The Americans are happy that India’s pesky left, reduced to a paltry 24 seats, has been all but eliminated from national government. India’s Communists had tried to topple the Congress-led government last year in an attempt to scuttle the nuclear deal brokered by the United States, and had vowed to upend it.
As for the threat from the right, anyone hoping for peace in the region and reduced tensions within India between religious communities is relieved by the defeat of the Hindu nationalist Bharatiya Janata Party (BJP). The BJP’s strategy of painting the Congress as soft on terror and demonizing Muslims as an existential threat to India badly misfired.
Unfortunately, however, the economic trajectory that Congress is plotting, though it may well boost growth in the short term, is ultimately on a collision course with both equity and sustainability. Despite rhetoric about “inclusive growth,” India’s wealth gap has widened during the years of exceptionally rapid economic expansion.