Stakes Are High for U.S. in India's Next Election

By Minhas, Sardul Singh | Examiner (Washington, D.C.), The, March 2, 2014 | Go to article overview

Stakes Are High for U.S. in India's Next Election


Minhas, Sardul Singh, Examiner (Washington, D.C.), The


India is an important natural ally of the United States, with shared roots in democracy and an ongoing turn toward a free-market economy.

It will also be an increasingly powerful -- India is projected by HSBC Bank to have the world's third-largest economy in 2050.

But India is at crossroads today, as it struggles with key issues ahead of a national election that must be held by May. The nation's self-confidence has been sapped by a combination of three factors: uncertainty regarding the correct economic path, well-publicized incidents revealing deeply inequitable treatment of women, and all- pervasive governmental corruption.

How the next government copes with those issues will have a major impact on the Indo-American relationship.

In the post-independence era of 1947-1991, India's economy combined features of capitalism with a heavy dose of socialism, resulting in inward-looking, interventionist policies. Economic growth barely kept pace with the population-growth rate.

In 1991, Prime Minister P. V. Narasimha Rao pushed through free- market reforms. The resulting turbo-charged economy established India by 2008 as one of the world's fastest-growing economies; its gross domestic product grew by 9.3 percent in 2010-11. But a shift to populist schemes, a slowdown in infrastructure development, and the general incompetence of the ruling government over the last two years caused the growth rate to nosedive; the GDP grew at an anemic 4.7 percent in October-December 2013.

The fast change from the Image of a rising world power to economic stagnation caused a severe whiplash to the Indian psyche. A fierce debate has broken out on the correct economic path for the country. The eminent Harvard economist Amartya Sen has asserted that India's free market reforms did not help the poor. Following his advice, the ruling Congress Party shifted to massive welfare spending. The government's fading interest in growth and overzealous environmental enforcement brought approvals for new projects to a virtual halt.

Another eminent economist, Jagdish Bhagwati of Columbia University, champions pro-market reforms and rules-based capitalism, which would restore high economic growth and help everyone, rich and poor alike. His thoughts may find good reception if the opposition party BJP comes to power in the general election scheduled to be held in April or May.

Women's rights are another sore point; traditional norms often conspire against laws meant to enforce them. …

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