Sluggish Start for India's Leader ; after a Year in Office, Reformer Manmohan Singh Has Been Unable to Push the Economy to New Heights

By Scott Baldauf writer of The Christian Science Monitor | The Christian Science Monitor, May 23, 2005 | Go to article overview
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Sluggish Start for India's Leader ; after a Year in Office, Reformer Manmohan Singh Has Been Unable to Push the Economy to New Heights


Scott Baldauf writer of The Christian Science Monitor, The Christian Science Monitor


When Manmohan Singh came to office as India's prime minister a year ago, there were high expectations that this architect of the recent boom times would be able to engineer even greater economic miracles. Surely, the former finance minister who first opened India's economy would sweep away bad regulations, invite more foreign investment, and turn the elephantine Indian economy into a racehorse. Or so the thinking went.

Today, some observers say, Mr. Singh's greatest achievement may be simply staying in office.

Surrounded by leftist coalition supporters who oppose almost every economic reform, and right-wing opposition parties who refuse even to attend parliament, Singh is an isolated figure. Economic growth has not shot up, but hovered just below 7 percent. Modestly, Singh himself gives his government's first year a barely passing grade of six out of 10.

In recent times, India has begun to see itself, like China, as a future regional powerhouse. The prime minister's ability to deliver a high-growth economy is seen not only as important for lifting millions of Indians out of poverty, but for India's international goals as well.

"Competing with China will require more than simply playing with the economic levers of growth," says Sumit Ganguly, director of the India Studies program at Indiana University in Bloomington. "It will involve bureaucratic reform - despite changes, the bureaucracy still remains slothful, elitist, and mostly unresponsive. It will also involve getting more serious about improving India's infrastructure."

Mr. Ganguly expects that Singh will do more in the remainder of his term, but in an incremental fashion. "His task, given the crew that he has, and the parliamentary constraints he faces, will be to simply stay in office, nudge and push where he can, and live to fight another day."

Modest successes

To be sure, the first year of a Congress-led government was not without successes. Indian relations with the United States have continued to improve, and India has warmed up relations with two of its fiercest rivals, Pakistan and China. Minor economic reforms, such as a new value-added tax, have been imposed to simplify tax collection, and the Singh government has opened up new sectors to foreign direct investment.

Yet from economists and political observers alike, Singh's first year in office has been greeted with varying degrees of disappointment.

Shankar Acharya, a friend of Singh, and now an economist at the Indian Council for Research on International Economic Relations in New Delhi, says that Singh's greatest weakness is that he relies on a coalition of leftist and secular parties, many of which are completely opposed to the economic reforms Singh was expected to deliver.

Referring to the ruling coalition's agenda for its term of office, Mr. Acharya wrote recently, "The Common Minimum Program has been a fertile breeding ground for many bad ideas. With profound sadness, I have to record that Bad Ideas seem to be trouncing Good Men."

'Bad Ideas' dodged

The good news, reformers like Acharya say, is that few of the ideas in the Common Minimum Program - including guaranteed employment for 100 days, affirmative-action programs for India's lower castes in the private sector, and canceling or delaying the sale of state-owned enterprises - have come to fruition.

The bad news is that the pace of economic reform remains slow, making it difficult to generate new jobs and to improve the lives of the poor and rural voters who elected this government to office.

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