The Economist, in its latest issue, featured India’s fading optimism on its cover. It wrote:
This dispiriting scene is in turn mainly caused by two political problems. The gradual fragmenting of voters’ allegiances has made India’s parliamentary arithmetic excruciatingly tight. The Congress party, which has ruled the country since 2004, depends on fickle and populist coalition partners. Congress itself is in a mess. The elderly ministers who run the country serve at the behest of Sonia Gandhi, the hereditary chief; an attempt to promote her son Rahul as the next dynast has gone badly. The government has not passed a big reform for years and seems preoccupied by holding a ragged coalition together until national elections in 2014.
The second kind of political problem has to do with limited ambition. The recent budget saw tweaks to tax rates, debt quotas and duties, all implausibly heralded as big steps. Struggling to pass reforms such as a new nationwide goods and services tax, and unwilling to tackle state monopolies and vested interests in industries like energy, even reforming politicians now settle for yanking a few rusty levers of the bureaucratic machine. Administrative improvisation is being taken as a substitute for genuine reforms that open up the economy.
So, what happens now? Are we doomed to a darkening future?