Rajanish Kakade / AP
Nowhere Man: Singh never had the power to push reform
ASIA

How Singh Blew India’s Moment

The ruling Congress Party failed to capitalize on an unprecedented boom and a sweet nuclear deal.

 

Email To A Friend

Please fill in the following information and we'll email this link.

Separate multiple addresses with commas

SPONSORED BY
 

It must have been an unusually tense night for India's prime minister. While Manmohan Singh waited in New Delhi, his fate hung in the balance more than 4,800 km away in Vienna. There diplomats from the 45-nation Nuclear Suppliers Group were deciding whether India should be granted a waiver allowing it to purchase uranium and civilian nuclear technology abroad—even though India has never signed the nuclear Non-Proliferation Treaty. The dispensation, part of the nuclear deal hammered out between New Delhi and Washington in 2005, would provide India with much-needed energy, cement its new strategic partnership with Washington and enhance its international stature. Singh had staked his legacy on the deal and risked the collapse of his fragile coalition government if it was scotched.

As the clock ticked past midnight in Vienna, things looked grim, with six nations reportedly opposing the deal. Yet just a few hours later, after a flurry of last-minute U.S. diplomacy, the holdouts came around, and the news was announced Sept. 5: India had secured its exemption. Headlines hailed the agreement as a triumph for Singh and a remarkable rebound from lame-duck status.

Just three months earlier, Singh's government had been on the ropes, as its communist partners threatened to abandon the coalition if it moved forward on the deal. But after months of equivocating, Singh ditched the communists and put together a new coalition that survived a confidence vote by an unexpectedly wide margin. Now one might assume Singh's Congress Party is well positioned for the next election, which must be called before May. The nuclear deal is almost in hand, and with annual growth rates topping 9 percent, India's international star has never been brighter. Yet Singh's government remains stubbornly unpopular.

The disaffection stems from Singh's inability to deliver on promises and bridge India's rich and poor gap. His countrymen long for a leader who can marry the country's vast potential with a bold vision, and make that vision a reality. What they got instead was a caretaker. Thrust into power almost by chance, lacking a clear mandate and constrained by his own party and his allies, Singh has often seemed meek and indecisive. And he's been unable to seize a series of once-in-lifetime opportunities.

Behind India's headline-grabbing economic growth, dissatisfaction and malaise abound. The reforms that ignited India's boom in the early 1990s—and that Singh helped implement as Finance minister—have stalled. The wealth gap between rural and urban dwellers has grown. Spiraling inflation, well into the double digits, has begun to pinch the wallets of even middle-class Indians. The white-hot economy has begun to cool, with growth projected to slip below 8 percent this year. That still sounds brisk, but it's not enough to lift millions of Indians out of abject poverty. Meanwhile, government spending has outpaced surging tax revenues, leading to a fiscal deficit estimated at more than 8 percent of GDP and that's gotten India's debt downgraded to near junk-bond status. The sense of insecurity is also compounded by faltering peace talks with Pakistan, a recent series of terrorists attacks inside India and new unrest in Kashmir. And in the past month the government has been criticized for its sluggish response to catastrophic flooding along the Kosi River and anti-Christian violence in Orissa.

Congress may manage to cling to power—its archrival, the Hindu nationalist Bharatiya Janata Party (BJP), suffers from internal division and geriatric leadership. The last BJP government (1999 to 2004) presided over huge economic growth but the gains were mostly concentrated in a few sectors, such as information technology, and a few urban centers. Hundreds of millions of Indians believed they'd been passed by and responded eagerly to Congress's promise of "growth with equity."

Label

Newsweek Top Stories
NEWSWEEK's 20/10
NEWSWEEK's 20/10

Our decade-in-review project recalls the highs and lows of the last 10 years.

Obama's Promises
Obama's Promises

Is the new president fulfilling his campaign pledges? Or falling short?

The Decade in 7 Minutes
The Decade in 7 Minutes

Video: A fast-paced review of the best and worst moments. Don't blink.

Accidental Celebrities
Accidental Celebrities

From Levi Johnston to Elian Gonzalez, these people never expected to be in the spotlight.

Discuss

Sponsored by

Member Comments

  • Posted By: bvijaykumar @ 10/11/2008 11:13:00 PM

    If ever there has been a BIASED article on the current stae of affiairs in India - well this article does take the cake. I am not an ardent fan of the congress party BUT i have a grudging admiration at the way Singh has handled doestic affairs in a complex stratified country with issues that have no parallels in the world. Arm chair philophists and writiers can easily throw accusations in the wind but under the circumstances Singh has done an admirable job. I have watched India over the last few decades and a leader of Singh's calibre unfortunately has never surfaced - most of them have worked with naroow self interests that nver kept the country ahead of their / party's aspirtatiosn. I do agree that the communist party (who I suspect work for China to undermine India's progress) has been most instrumental in the downfall of the country. I am however not convinced about all the examples of inflation, high food costs etc being blamed on Singh - which country can the author confirm has been isolated from these global trends due to their leaders acrtion. I await this detaisl in anticpation

  • Posted By: Bimal @ 09/29/2008 12:00:41 PM

    While I fully agree to the observations made by the author about the failures of Dr. Singh's government in capitalizing on the boom in India, I do not understand the common thinking, including in this article, that reforms in banking, insurance and pension sector means privatization. Before concluding that since the government controls most of the assets in this sector, the reforms have not taken place, the author should have examined the major improvements that have happened in reduction of red tape in these sectors, improved customer service, openness of government owned banks and insurance companies to develop and provide products that match the private sector offerings, performance-driven management systems, automation and technology adoption making transaction processing much faster etc. In fact, a yet poor country like India (as it comes out in the article too) cannot afford to have private sector play with pension funds and then get into a mess with the market making common men penniless. We are seeing such possibilities in probably the most privatized economy of the US. In a totally reverse move to privatization, the US government had to bail out two mortgage funding companies, Freddie Mac and Fannie Mae, almost nationalizing it.

    The reforms do not become good just because reforms are implemented faster and they are mostly through privatization. The economy of India has shown resilience against international and Asian crisis most of the time in last two decades because of the slow and cautious approach that successive governments have taken in implementing reforms in various sectors.This is probably the best way for India to move further on reforms

  • Posted By: sumpingrey @ 09/17/2008 1:14:48 PM

    Manmohan Singh has proved to be the WORST prime minister India has ever had, bar none. The gap between promise and delivery has never been higher, expectations raised sky high were never met. Ancient Nehru dynasty loyalists like Arjun Singh and that embarassment Natwar Singh were given responsibilities for which they werent prepared...with that weak a leadership, everyone wanted to be first among equals.
    The rate at which I am taxed is absurd, considering I never get the infrastructure for my own money, earned by compromising personal life and peace of mind. The private sector - the only true meritorious institution left in the country after Arjun Singh took his axe through the IIT/ IIMs - is threatened with reservation, without ANY effort to raise primary education levels for the so-called 'lower castes'. And all this from an ECONOMIST????? I mean, cool Singh's kids are all in the US, settled and enjoying the fruits of said country. That's why he can go about finishing India.

Reply

Report Abuse

Enter comments if any for reporting abuse