The jubilation around India’s latest sporting star P V Sindhu—her success in bagging a medal at the World Badminton Championship, the first Indian after 30 years to do so—resonates with a salutary message. Aspiring India is desperate for a win, for winners. The outrage on the streets is about loss of pride, over the incapacity of a government to deal with issues of national import —whether it is the serial humiliation at the borders and/or the hapless state of the economy. The state of governance is now the assembly line for jokes laced with dark humour, Bhaag Rupee Bhaag is the title of a blockbuster. Such participative angst on SMS is but a reflection of an anxiety to be rid of that losing-feeling, to be back in the winning circle.
And the only way this can now come to be is for India to go to the polls. Indeed, it is as much in the interest of the Congress-led United Progressive Alliance to board the poll express and gracefully chug back towards the voters on political, if not compassionate, grounds. Its legitimacy is being challenged in government by the babudom, by the opposition in Parliament where over 100 bills are pending since 2004. The algebra of politics keeps UPA II alive but it lacks the arithmetic to guarantee that India will stop being a-drift to thrive.
Doctors of physiology believe that death is a necessary precondition for rigor mortis. This, though, does not apply to governments. It can be a ‘stiff’ and yet be alive as is evident. However, a nation of a billion people can scarcely afford such surrealism. India is poised on the brink of a serious crisis. National security, political stability and economic viability have all been laid vulnerable by a regime suffering from a crisis of legitimacy. Continuing on the precarious life support system of transactional politics serves political ends but not national interest. It will only aggravate the many crises India faces.
It is not an accident that both Pakistan and China are needling the Indian Army at the borders almost in concert. Indeed, the incursions by China are co-terminus with increasing signs of the political chaos within. There is a growing belief that foreign hands could be funding at least some of the agit foment. While the jury is out on the theory, it is obvious that a weakened regime has emboldened not just China but even Pakistan to revive its six decades old doctrine of ‘a war of a thousand cuts’. It might sound paranoid, but there is every reason to suspect that this is a pincer move by two old allies, the principal and its client state. The Western Bloc nations perceive the possibility but can scarcely be expected to be sympathetic, furious as they are at what they see as transgressions in patent laws, regulatory over-reach and retrospective tax legislation.
India is also poised at the brink of a serious economic crisis. The economy is suffering from many deficits —fiscal, current account and growth. All of which are consequences of aggravated decision deficit. The government spends much more than its revenues by borrowing over `1,500 crore per day, India imports far more than it exports driving the rupee lower and GDP growth is at a 10-year low. None of this happened overnight. While the widening of fiscal deficit is the result of populism, the doubling of current account deficit in three years is the direct result of apathy towards reforms.
There is much debate on imports of gold and oil subsidies. But little discussion on the rise of non-oil merchandise imports which have shot up from $113 billion six years ago to over $335 billion. Of course there is gold, worth around $80 billion. What else is India importing worth $250 billion? Mostly what is made here but is too expensive to buy. In 2011-12 and 2012-13, India imported $60 billion worth of electrical machinery, sound and television image recorders and parts, of which nearly $30 billion were from China. Everything from Chinese Ganeshas to glitzy smart phones, from flooring materials to firecrackers is being made cheaper elsewhere. And this is so because reforms—on power, labour, land, clearances—are all stuck.
Interestingly, India told the International Monetary Fund (IMF) in 2010 that the widening of the current account deficit was “transitory”. In 2012, current account deficit has nearly doubled and the IMF has observed that lower exports, rising imports and deleveraging by advanced economies’ banks (read Bernanke at the Fed) could have an adverse impact on India. The buzz in Delhi and DC (Washington) is that India is already in talks with the IMF. Among the exotica under consideration is issuance of bonds to be subscribed by IMF—a bailout with a positive spin.
Going to the IMF, however, means accepting conditionalities. It is not something the party’s many entitlement raj evangelists will accept, not in the run-up to the polls for sure. Sorting out the border issues, similarly, requires making the distinction between political interests and national interests. But clearly both the geopolitical and the economic crisis need early resolution.
Waiting it out till the last breath has been the Congress’ tried and tested mantra. But there is no upside to waiting. Neither growth nor governance is guaranteed. It is best for the Congress-led UPA to opt for polls and end its own and the nation’s agony. The monsoon has been good. The current account crisis can be kept at bay till December. The food security promise is already in place. In Andhra, the creation of Telangana is expected to mitigate the Jagan factor. If the Congress is convinced of polarisation and the BJP of Modi’s potential, why not time the general elections along with the state polls in November?
The results may throw up a UPA III, an NDA II, a Fourth Front. Whatever the outcome, at least Indians will be rid of this sinking feeling.
shankkar.aiyar@gmail.com
Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change