A strongman is not the solution to India’s troubles

November 17, 2013 7:57 pm

A strongman is not the solution to India’s troubles

By Ramachandra Guha

Congress misrule has led to stalling growth – but Modi alone cannot fix it, says Ramachandra Guha

In the first weeks of 1967, the New Delhi correspondent of The Times wrote a series on “India’s Disintegrating Democracy”. “Universally believed to be corrupt”, the “government and the governing party have lost public confidence and belief in themselves as well”, he remarked. But he also thought that, among Indians, there was “emotional readiness for the rejection of parliamentary democracy”. They were due to vote in what the Times man saw as “the fourth – and surely last – general election”.Next May, the country goes to the polls for its 16th general election. In power, since 2004, is a coalition led by the centrist Congress party, with Manmohan Singh serving as prime minister. From the outset, Mr Singh subordinated himself to Sonia Gandhi, the party president, who led the election campaign but declined the office of prime minister. It was Mrs Gandhi who chose the cabinet ministers, and determined the government’s core priorities. Populist handouts and subsidies have been favoured, rather than the building of infrastructure or the renewal of public institutions.

While Mr Singh’s weakness was manifest in his first term, it has been magnified since the alliance’s re-election in 2009. A series of corruption scandals has rocked the government. The prime minister’s office has colluded in sweetheart deals with favoured companies. Despite strictures passed by the Supreme Court and the government’s own auditor-general, Mr Singh failed to take action against officials charged with misconduct.

As Mr Singh allows his authority to be flouted, a strongman named Narendra Modi has emerged as the frontrunner to succeed him after the next elections. Mr Modi started out as an activist in the Rashtriya Swayamsevak Sangh, a cultural organisation that believes in the construction of a Hindu theocratic state. The RSS is deeply suspicious of Muslims and Christians, seeing them as a contaminating foreign influence on Indian soil.

After many years in the RSS, Mr Modi was inducted into its political affiliate, the Bharatiya Janata party. In 2001 the BJP sent him to head the government of his home state, Gujarat. This has long been one of the moremarket-friendly parts of India. As chief minister, Mr Modi has furthered its industrialisation while radically cutting red tape. His record on social issues is less salutary. Early in his tenure, there was a pogrom against the Muslim minority, which a minister has been convicted of abetting. More recently, books have been banned and artists harassed in Gujarat, while teaching standards have slipped.

Mr Modi’s supporters claim that his greatest assets are “development” and “governance”. In truth, they are named Manmohan Singh and Rahul Gandhi. Mr Modi is increasingly perceived as what these Congress leaders are not. Unlike Mr Singh, he is a powerful orator and tireless traveller in India. Unlike Mr Gandhi, heir apparent to his mother, Sonia, he is willing to shoulder administrative responsibility.

Even more than in 1967, the ruling Congress is “universally believed to be corrupt”; and the public wish to use their right to vote to teach them a lesson. Mr Modi had therefore sought to reshape a parliamentary contest – fought separately in each of 543 constituencies – into a presidential one. His speeches focus largely on the incompetence of Mr Singh and Mr Gandhi. They have had some effect: recent polls suggest that the BJP may be in a position to lead a coalition government in 2014.

The BJP was in power in New Delhi between 1998 and 2004, when its prime minister was Atal Behari Vajpayee, who loved poetry and was unfailingly courteous to his political opponents. Mr Modi, on the other hand, is a brash, assertive, man, whose speeches make abundant use of sly innuendo as well as outright abuse. He frequently refers to Mrs Gandhi’s foreign origins. He dismisses the Congress regime as the “Rome Raj” and, when Mr Singh announced his support for foreign direct investment in multibrand retail, Mr Modi asked him how many Italian businessmen he wished to favour. He has likewise made derisive personal remarks about leaders of smaller regional parties that are not aligned with the BJP.

There is no question that Congress misrule has led to a stalling of economic growth and a steep decline in governance. However, to refocus on fiscal pragmatism and to rebuild public institutions requires a broad, collective effort, not a series of fiats. For, contrary to The Times’s prediction in 1967, democracy has strong roots in India. So has federalism. Many states are run by parties other than the BJP and Congress. There is a free press, and a vocal intellectual class.

In a relatively small state such as Gujarat, bonded by a shared language, Mr Modi’s authoritarianism has worked for him. A complex and heterogeneous union of 28 states may be another story. Indians now rightly disgusted with the submissive, acquiescent persona of Mr Singh might find themselves quickly disenchanted by the bullying and hectoring style of Mr Modi.

The writer’s books include ‘India after Gandhi’ and ‘Gandhi Before India’

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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