Wednesday, March 9, 2011

India's Mood Darkens as Corruption Undermines Nation's Self-confidence

Corruption has a "deeply corrosive impact" on young Indians, who were starting to feel it was limiting their opportunities to succeed.

NEW DELHI - Just a few months ago, India was preening itself in the global spotlight. World leaders were queuing up to visit and President Obama famously declared the country was not simply emerging: It had "emerged." Yet the elation the nation felt then was short-lived. Its pride buffeted on a daily basis by tales of collusion between politicians, bureaucrats and businessmen and reports of billions of dollars brazenly stolen, the mood among India's middle classes is distinctly crestfallen. The country is experiencing what some people are calling "a reality check," or what business tycoon-turned-independent member of Parliament Rajeev Chandrasekhar sees as a "psychological crisis of confidence."

The fundamentals of the Indian success story have not changed: the tremendous power of the country's entrepreneurship unleashed by economic liberalization two decades ago, the rapid growth and spending power of its 300 million-strong middle classes, the demographic dividend of its burgeoning young population. And although inflation has risen and foreign direct investment has fallen, the economy, which emerged almost unscathed by the global financial crisis, is still expected to grow at 9 percent this year.

For years, that success had fed what many business leaders, economists and social commentators now acknowledge was a sense of complacency, a feeling that economic growth and the pursuit of wealth would solve the nations' problems and deliver a bright new future. Today, there is a realization that it is not enough for the government to get out of the way of the private sector, that it actually needs to govern, too, to deliver services instead of merely lining its pockets. The idea that India was on an automatic path to becoming a developed capitalist economy was "delusional," many feel. Doubts about India's bright future started to set in during the run-up to last summer's Commonwealth Games, the nation shamed by stories of blatant corruption and stunning incompetence.

But when India's comptroller and auditor general reported in November, just a few days after Obama's visit, that mobile phone operators had been undercharged nearly $40 billion for allocations of 2G frequency bands in 2008, and leaked telephone conversations suggested the existence of an unsavory nexus among politicians, business and the media, the national mood really soured. The billionaire leaders of industry had been the gods of the new India, people like Anil Ambani, the head of mobile carrier Reliance Communications, who was voted MTV's youth icon in 2003, and the septuagenarian Ratan Tata, often seen as the embodiment of business with a social conscience.

In the past few months, those icons have been publicly humbled. In February, Ambani was hauled up to the Central Bureau of Investigation for questioning over the 2G scam, while Tata has been to court in an attempt to block release of the taped telephone conversations, in which he featured, along with his lobbyist Nira Radia and other top industrialists, politicians and journalists. A February survey of urban middle-class Indians by the Times of India showed a stunning 83 percent felt corruption was at an all-time high, two-thirds said the government was not serious about tackling it and 96 percent said it had tainted the
government's image.

The crisis of confidence is sharpened, political analysts say, by a leadership vacuum, and the elderly figure of Manmohan Singh standing apparently helplessly at the helm of a government in denial about the scale of the problems. Singh talks of the corruption scandals as "aberrations" and blames the media for sapping India's self-confidence and spoiling its image abroad. It is argument that only seems to make many Indians angrier. Singh himself has been forced to agree to appear before a parliamentary investigation into the mobile spectrum scam. His telecoms minister is in jail, and he admitted "an error of judgement" when the Supreme Court struck down his appointee to run the country's anti-corruption watchdog because he was himself facing charges for graft.

Indians see a turning point

Corruption has a "deeply corrosive impact" on young Indians, who were starting to feel it was limiting their opportunities to succeed.

At the end of January, about 30,000 people, most from the traditionally apathetic ranks of the young and middle classes, marched in New Delhi against corruption, mobilized largely by a campaign on Facebook. There was no comparison to the massive protests that have convulsed the Middle East and no one is expecting revolution in India. But there is a widespread feeling that the country is at an inflection point, that crisis can be turned into an opportunity, but that India needs to dramatically improve the quality of its governance, if as a nation it is to fulfill its vast potential. The Washington Post

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