A test of India's confidence
Joe Leahy | Sunday, 20 July 2008
FT Syndication Service
NEW DELHI: When Manmohan Singh, India's prime minister, decided early this month to push through a nuclear deal with the US, the response from his erstwhile communist parliamentary allies was immediate and to the point. "That time has come," said Prakash Karat, head of the Communist party of India (Marxist). The CPI (M) and its three leftist partners, which strongly opposed the nuclear deal on ideological grounds, withdrew their support in parliament for the ruling United Progressive Alliance coalition led by Mr Singh's Congress party.
This set the stage for a parliamentary vote of confidence tomorrow (Tuesday) that will decide the fate of the government. If the UPA can survive the vote and emerge with new, more reform-minded partners, the exercise could be the best thing that has happened to the government since it was elected in 2004. For India, it might also finally be a chance to bid good riddance to the communists and their stranglehold over the country's economic future.
The four main communist parties over the past four years have enjoyed that most privileged of positions: power without responsibility. The leftists have refrained from formally joining the governing coalition, instead using their 59 seats to provide the UPA with the majority it needs in the 543-member national parliament to stay in power. At the same time, they have used their position to exercise an effective veto over any UPA policy that did not fit with their ideology.
The result has been four years of policy stagnation that has left India flatfooted in the face of the economic downturn. On almost every front - infrastructure, reduction of expensive subsidies such as on fuel, or allowing foreign direct investment in retailing and education - the communists have advocated the status quo, even when this is woefully inadequate.
As one illustration, a paper on the CPI (M)'s website written in 2006 recommends stopping the privatisation of India's airports and leaving their modernisation in the hands of the state-run Airport Authority of India. This was despite the fact that after decades of government management, many of India's airports are among the shabbiest of any fast-growing economy in Asia. Without a substantial injection of private capital and expertise, they are unlikely to keep pace with soaring air traffic.
The same year, the leftists opposed an increase in retail fuel prices, recommending tax cuts instead. Yet if the government had started raising fuel prices more aggressively in 2006, it might have softened the impact of the present oil crisis. The surge in global crude prices has raised the cost of India's fuel subsidies to an unsustainable $60bn (Euro37.8bn,
NEW DELHI: When Manmohan Singh, India's prime minister, decided early this month to push through a nuclear deal with the US, the response from his erstwhile communist parliamentary allies was immediate and to the point. "That time has come," said Prakash Karat, head of the Communist party of India (Marxist). The CPI (M) and its three leftist partners, which strongly opposed the nuclear deal on ideological grounds, withdrew their support in parliament for the ruling United Progressive Alliance coalition led by Mr Singh's Congress party.
This set the stage for a parliamentary vote of confidence tomorrow (Tuesday) that will decide the fate of the government. If the UPA can survive the vote and emerge with new, more reform-minded partners, the exercise could be the best thing that has happened to the government since it was elected in 2004. For India, it might also finally be a chance to bid good riddance to the communists and their stranglehold over the country's economic future.
The four main communist parties over the past four years have enjoyed that most privileged of positions: power without responsibility. The leftists have refrained from formally joining the governing coalition, instead using their 59 seats to provide the UPA with the majority it needs in the 543-member national parliament to stay in power. At the same time, they have used their position to exercise an effective veto over any UPA policy that did not fit with their ideology.
The result has been four years of policy stagnation that has left India flatfooted in the face of the economic downturn. On almost every front - infrastructure, reduction of expensive subsidies such as on fuel, or allowing foreign direct investment in retailing and education - the communists have advocated the status quo, even when this is woefully inadequate.
As one illustration, a paper on the CPI (M)'s website written in 2006 recommends stopping the privatisation of India's airports and leaving their modernisation in the hands of the state-run Airport Authority of India. This was despite the fact that after decades of government management, many of India's airports are among the shabbiest of any fast-growing economy in Asia. Without a substantial injection of private capital and expertise, they are unlikely to keep pace with soaring air traffic.
The same year, the leftists opposed an increase in retail fuel prices, recommending tax cuts instead. Yet if the government had started raising fuel prices more aggressively in 2006, it might have softened the impact of the present oil crisis. The surge in global crude prices has raised the cost of India's fuel subsidies to an unsustainable $60bn (Euro37.8bn,