IT IS SAD

In the first quarter of 2012 India’s growth has been in the rate of 5 1/2%. In caparison to the double digit growth rate of the past this downward march is extremely disappointing. Standard and Poor, a credit rating agency, has downgraded India as a poor prospect for investment. Others are directing their money away from India because of the instability in Government’s financial policies. Had it been a dictatorship – thank God, it is not – the tug of war among political elements would not have mattered. But India being a democracy any push and pull among politicians and their Parties is magnified many fold which carries a profound impact on different policies - domestic and foreign – of the Government. The United Progressive Alliance Government headed by the Congress Party’s Manmohan Singh, like its predecessor the National Democratic Alliance headed by the Bharatiya Janata Party is wedded to the principle of liberalization. However, some of its allies at the State level see multinational corporations such as IKEA or WALMART coming into India’s consumer market as a disaster waiting to happen. They oppose the entrance of these behemoths in spite of the Center’s disgruntlement. Yet, the Central Government is in no position to do anything to counter the small Parties as it needs their support. In spite of its commitment to economic liberalization, the Manmohan Singh Government, because of domestic reasons, is taking certain protectionist measures that other countries see as a violation of the International trade agreement. For the first time in independent India’s colorful history local leaders of various States are asserting their rights and actually succeeding in doing so. Mamata Banerjee is opposing the multinationals selling consumer goods in Bengal. Naveen Pattnaik is opposing the Counter terrorism Center opening in Odisha. And the list goes on. Two major political Parties of the country Congress and BJP are beholden to regional Parties because of the way the country votes. In order to form a government a Party must cobble together a majority. Those who help a major Party to make the grade also expect to extract their price. That is how regional leaders such as Karunanidhi, Jayalalitha or Yediyurappa or Chandrababu Naidu pull their strings. Clearly, India has reached a period of the coalition government that seems to continue for some time to come. Smaller States, regional Parties in power, dependence of the Center on allies have created a new reality which also has created political uncertainty to some degree. The situation also has created different centers of power that have more or less helped strengthen India’s democracy. On a personal level, many of the leaders have been unable to work in a cooperative way. The result has been that different elements continue to drag the country in a different direction. Their uncoordinated effort to effect progress has hurt the country financially and it shows. The drop in the credit rating along with a sharp decline in the growth rate tells the story. Yes, there are external forces that could be attributed to many of the debacles. The bursting of the housing bubble in the United States or the economic hardship in Europe or China’s economic slowdown could be factors. But all of them individually or together do not tell the whole story. One would not be too far off to think that it is the political leaders of India who as a group have failed to stimulate the economy through sheer negligence. While trying to undercut each other shrewdly, they have helped ruin the country’s economy and its future. Then there is the question of corruption which is present at every stage of public life. Various individuals and groups are working against this national scourge. However, getting rid of corruption requires a hand from everybody, politicians included. Sadly, such a thing is not happening. And together, all of these elements take the country deeper and deeper into an economic hole and that is sad.



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