Is bad politics ruining India?

Indian snake charmer in Jaipur - 8 April 2010

Is India losing its mojo because of bad politics?

It's an obvious question to ask at a time when powerful - and populist - regional parties are again flexing their muscles at a fickle federal government, key economic reforms are seemingly stuck in the bog of messy coalition politics, and the government is struggling under an avalanche of corruption charges. Economic growth and investment have cooled and inflation remains high.

So is it surprising that The Economist magazine, in its latest issue, says the politics is "preventing India from fulfilling its vast economic potential"?

Or when Fareed Zakaria, editor-at-large with Time magazine, tells an audience in Delhi this week that India's politicians are "out of touch… they try to portray India as a victim, not the victor".

With uncharacteristic exaggeration, The Economist even invokes a return to the stifling days of the controlled economy.

"Lately, like a Bollywood villain who just refuses to die, the old India has made a terrifying reappearance," says the magazine. It blames a "nastily divisive political climate" for the crisis and believes that India requires "energetic, active leaders, plus politicians who are ready to compromise".

'Corrupt and corroded'

Both the magazine and the pundit are right and wrong.

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Reformers need to be patient; there are no shortcuts in India”

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The quality of India's politicians, many argue, has declined drastically, as in many parts of the world. Most of them seem to be out of sync with modern day realities - expectations have fallen so ridiculously low that an iPad carrying politician is described by the media as a modern one!

Most are also seen as greedy, corrupt and disinterested in serious reform. The increasing number of politicians with criminal records and the brazen use of money to buy party tickets and bribe voters erodes India's ailing democratic process.

It is not a happy picture. "Today the Centre is corrupt and corroded," historian Ramachandra Guha wrote recently. "There are allegedly 'democratic' politicians who abuse their oath of office and work only to enrich themselves; as well as self-described 'revolutionaries' who seek to settle arguments by the point of the gun." Only serious electoral reform can ensure a better breed of politician.

But to believe that less politics is good economics is a bit fey. There is little evidence to argue that political instability has been bad for India's economy.

India's first flush of economic reforms was launched by a minority government headed by PV Narasimha Rao of the Congress party in the early 1990s. The reforms spluttered to a halt when the government secured a majority.

Later, a rag-tag 13-party coalition United Front government helmed by two prime ministers in 18 months in the mid-1990s undertook significant reforms, slashing taxes, deregulating interest rates and moving towards capital account convertibility.

One study by Kausik Chaudhuri and Sugato Dasgupta actually found that more investments take place when coalition governments are in power, one of the reasons being various regional interests are held together by "generous distribution of infrastructure projects". Economist Surjit Bhalla has argued that political instability is actually good for economic reforms.

"The contention is that lack of political dominance means that politicians in power will make the extra reform in order to fight for marginal votes in a future election," he has said. "And if political stability is present, the politicians are unlikely to make an effort because of their inherent short sightedness or complacence."

Elitist biases

The problem, as Paranjoy Guha Thakurtha and Shankar Raghuraman argue succinctly in a study of coalition politics in India, is that privatisation - a key aspect of economic reforms - remains a dirty word with most of India's politicians, trade unionists and opinion makers.

There is still a serious lack of political consensus on issues like foreign investment, lowering interest rates on deposits in pension funds and privatising profit-making state-run factories.

Public consensus is harder to come by in an awfully unequal society where the middle class and the rich root for further opening up of the economy, while the poor want the state to invest in health and education and check corruption. The elitist biases in public policy is made easier by a poorly-informed and often unlettered electorate with low expectations.

Many would argue that India never got any magic going, so there is no question of losing it.

Consensus is painfully slow in such a society, and sometimes only a crisis can provoke the government - and the people - to bite the bullet. Reformers need to be patient; there are no shortcuts in India.

Soutik Biswas Article written by Soutik Biswas Soutik Biswas Delhi correspondent

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  • rate this

    Comment number 17.

    We have had coalition governments for a long time now. This isn't the first government in coalition. Things are drifting because we have a weak leader in the Prime Minister, a technocrat with zero political skills.

  • rate this

    Comment number 16.

    Our policies of appeasement (#14) increases during coalition. But Indian political parties & Govt routinely bypass laws, ignore court orders & keep on moving on the slippery slope of populist programs. Recently by Punjab Govt by refusing to punish the killer of a Chief Minister of the state!

  • rate this

    Comment number 15.

    "More investments take place when coalition governments are in power"- mainly because laws are easier to break when Govt is weak, as in coalition Govt. Proposed projects & investment plans are least scrutinized in such situations. "Investment" became the buzz word to influence voters & to create a false sense of "development", besides getting cut money & party fund etc from such investments.

  • rate this

    Comment number 14.

    @BluesBerry (6,7). Indian states & districts within states were drawn based on cultural difference (mainly linguistic). Neither state/district borders, nor big size is of great importance for mis-governance. The new, re-drawn states are no better governed than older ones. Our policies of appeasement basically ruined our chances to use the biggest asset India had/has- i.e. its diversity and size.

  • rate this

    Comment number 13.

    There was/is, in fact, inverse correlation with bad governance & economic "development" in India. In reality, Indian economic bauble was built exploiting mainly huge supply of decently trained cheap labor, cheap raw material, least regard for environment, ease to break almost any law & almost total lack of corporate governance. It was not based on invention/innovation to long term sustain growth.

  • rate this

    Comment number 12.

    will be imprisoned and tortured by police in the name of national security. No one will come to know about the reason behind his/her final destiny. Because our media sorry corporate & entertainment media channels are busy with GDP growth figures, Cricket (the only sports we play what a shame) & Bollywood.

  • rate this

    Comment number 11.

    It's becoming clearer that the country is in deep trouble. Recent incidents involving Army chief General VK Singh, alleged bribe offer by the head of military intelligence & General Singh's leaked letter to PM are just few more indications on how worse the situation is. Almost all national institutions are systemically ruined. Many time courts need to intervene to ensure basic governance.

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    Comment number 10.

    That’s why India is a country of the politicians, for the politicians and by the politicians using most destitute common people during voting time in the name of democracy. If anyone raised his/her voice against this, either he/she will be killed by criminals which under the political parties or

  • rate this

    Comment number 9.

    Indian Penal Code was made in 1862 by British raj not for proving justice to common people of India, just to protect raj so that they can rule the country smoothly.British left, our politicians came in, and today they are taking the benefit instead of common people. Due to this simple reason they are highly reluctant to change any system

  • rate this

    Comment number 8.

    Well, not only bad politics but bad governance as well. A nation progress only when there is rule of law. After nearly 65 years of independence still we failed to establish rule of law due to our corrupt politicians.

  • rate this

    Comment number 7.

    India is simply too big & too diverse for democracy. Just voting becomes a massive exercise with inevitable delays, to say nothing of candidates being able to penetrate their views to the people. Something must be done to make India's size manageable, its programs deliverable. I believe this "something" is division of country along best ethnic/traditional lines possible.

  • rate this

    Comment number 6.

    India is too big, too diverse, too politically divided, & yes, too corrupt.
    It's not first time I've expressed opinion that India ought to seriously consider redrawing her boundaries in consultation with neighbouring states. This was supposedly done before = Pakistan. But it was done hurriedly & badly. I can't understand why Indian Govt would rather deal with daily hostilities.

  • rate this

    Comment number 5.

    Isn't the fact that India is a dynastic 'democracy' i.e. you vote for which 'royal' family gets its nose in the feeding bag for five years, the real problem? All India's corruption issues stem from from nepotism (whether railway jobs, to Prime Minister) ... its this that drive the bad politics.

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    Comment number 4.

    Thank you for this article, Soutik. I feel that a major factor shackling the development of India is bad politics. Why would anyone invest in a place where corruption is protected (and nurtured) by all political parties? Even now, India is unwilling to punish condemned terrorists like Kasab, Afzal Guru and Rajoana ( ) because of political reasons.

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    Comment number 3.

    Completely ! I will go to the extent of saying the Indian constitution needs to reworked. The ground reality has changed. I think it is a sorry state and only some kind of political revolution can only solve it. The dynasty-ism has to be removed. The electoral process is something that will require some serious radical changes.

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    Comment number 2.

    "Consensus building" need real leadership quality that comes from wisdom & honest desire. There are not many "leaders" in both ruling & opposition parties with it. In reality, India never learned democratic, consensus decision making. Even in its best form (keeping aside routine issues of ignorance & self-interest), India is basically a feudal society where decisions are imposed, not influenced.

  • Comment number 1.

    This comment was removed because the moderators found it broke the house rules. Explain.


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