Saturday, June 06, 2009

Singh's 100-day plan to revolutionize India

He may be shy, but his 100-day plan for India is strikingly bold.

Jason Overdorf and Sudip Mazumdar
From the magazine issue dated Jun 15, 2009
For much of the past 15 years, Indian politics were so chaotic that a prime minister would spend most of his first 100 days focused on a single objective: holding onto power. But Manmohan Singh's surprisingly decisive victory in last month's election—coupled with the global economic crisis—has suddenly put him on an American president's schedule: you have 100 days, now get to work fast.

Believing that the Congress Party's near-majority in Parliament will free Singh to slash red tape and spur growth, bankers, columnists, lobbyists and think tanks have spent the time since the poll results were announced on May 16 issuing a torrent of to-do lists for the prime minister. But probably the boldest and most innovative agenda has come from Singh himself. Conceived during the election campaign, at a time when nobody else had much faith in him, his 100-day plan is filled with specific, substantive measures that range from selling stakes in state-owned companies to restructuring rules on public-private partnerships to removing bottlenecks that have delayed some $15 billion worth of road projects to enacting a new food-security law. Together, the advances might just amount to the big-bang reforms that India has been awaiting for nearly a decade now. And having vanquished his foes on the left and the right and earned the unquestioning faith of Sonia and Rahul Gandhi, his party's leaders, Singh might even manage to get it all done.

Not everyone is happy with his plans. Despite being best-known as the architect of India's economic opening in 1991, today the prime minister's got other things on his mind. He, Sonia and Rahul are intent on reforming—or transforming—India, but not in a way prescribed by international moneymen or CEOs. Instead, under the shorthand "inclusive growth," they aim to carve out a new path that, if successful, could provide a road map for developing countries worldwide.

Central to their goal are measures some people might not consider reforms at all. First among them are a National Rural Employment Guarantee Scheme (NREGS) and a Right to Information Act (RTI). Decried by some economists as a populist sop, the NREGS is in fact designed to revolutionize India's leaky bureaucratic mechanism for dispersing money and to free the poor from exploitative middlemen by channeling an unprecedented level of funds (and decision-making power) to village-level elected officials. Singh believes that, like Franklin Roosevelt's New Deal, this stimulus plan will put money in the hands of the people most likely to spend it well and will create a social safety net that will help unleash their productive capacities. Meanwhile, Congress plans to expand the use of the RTI, which was enacted in 2005, and to pass a few new laws to make bureaucrats, politicians and judges more accountable by shining a bright light on their activities.

In a country where even the trash in a government wastebasket is frequently considered classified information, the RTI is groundbreaking. Under the law, ordinary people can for the first time get a look at the books of their local ration shops, say, or at government departments—and see what corrupt officials have been skimming off the top, delivering to fictitious beneficiaries, or just plain stealing. And because the information must be made available within 30 days or the official in charge will face immediate punishment, whistleblowers get results from RTI cases much faster than they would from India's progressive but slow-as-molasses legal system.

Still, until recently, no one has pushed RTI far enough to enjoy its full potential. Now Rahul is striving to do just that by urging youth to storm the barricades of the bureaucracy with an ever-expanding number of RTI cases. The effects could be revolutionary. In Uttar Pradesh—India's largest state and a place where the Congress Party made a huge and unexpected surge in the recent election—Shailendra Singh, a former police officer who now heads the party's RTI cell, became such an irritant in September that the state's chief minister, Mayawati, had him arrested. With the rise of Rahul's youth brigade, there could soon be thousands of other gadflies just as irritating.

This isn't to suggest that the prime minister's 100-day agenda is only aimed at the poor and destitute. It also includes controversial measures that bankers have been advocating for a long time, such as the sale of state-owned enterprises. Though Singh himself has only said that disinvestment of public-sector units "will be tackled by the finance minister in the budget," sales of shares in Oil India Ltd. and the hydropower firm NHPC Ltd.—which were approved for IPOs of 10 percent and 5 percent, respectively, in 2007 but then blocked by the left—are reported to top the agenda. Deregulation of the oil industry—another move the left opposed because it would mean higher prices at the pump—is now also expected to be put before the cabinet within six to eight weeks. Instead of a vague pledge to increase capacity, the Power ministry has promised to deliver 5,600 megawatts of new power by the end of August and to unveil three 4,000 megawatt projects in Tamil Nadu, Gujarat and Orissa within 100 days. Investors have already taken note, pumping more than $4 billion into Indian equity markets in May and sending the benchmark Sensex on a 28 percent climb.

It's no small irony that all these measures are being driven forward by such a humble, soft-spoken man. At public gatherings Singh often seems to step backward and offer the microphone to someone else. The modest prime minister was denigrated during the campaign as the weakest leader in India's history. But he has turned his apparent shortcomings as a politician—his poor oratorical skills and incapacity for court intrigue—into strengths. His reputation for honesty is unparalleled in a country where a fourth of the legislature faces criminal charges or investigations and politicians have come to be generally reviled. Singh's name has never been mentioned in association with any scandal. And his refusal to trumpet his achievements or play political games has endeared him to the public and given him a reputation for impartiality, which has allowed him to build consensus and should help him implement his agenda. "He's been a very good arbiter when two departments disagree, or there's a disagreement between ministers," said Transport Minister Kamal Nath, who was Commerce minister in charge of World Trade Organization negotiations during Singh's first term.

The prime minister has another big weapon helping him in his current campaign: he knows what he's talking about. The Oxford-educated economist has served as governor of India's central bank, head of its planning commission and as finance minister—a unique résumé for a world leader and an especially potent one during the current crisis. "Others have to depend on so many inputs, and have to be briefed and have to try to understand. He briefs the others. He's a man who understands the subject better than any world leader today," says Nath. In these economic times, it turns out, you can afford to speak softly—if you carry a big calculator.

Just as important as his own qualities, though, is the degree of support that Singh now enjoys from Sonia Gandhi and her son Rahul, the dynasty's emerging heir apparent. Singh today is not so much India's prime minister as the leader of its first triumvirate. Yet the clear division of responsibilities makes him more powerful, not less. With Sonia managing the internecine rivalries within the party and Rahul focused on rebuilding Congress's grassroots network, the prime minister can concentrate on policy, not the party's next campaign. It's a unique political formulation for India and, as the recent election showed, a formidable one. While the Bharatiya Janata Party (BJP) was derailed by divisions among its various leaders, Sonia and Rahul squashed internal efforts to undermine Singh's candidacy, performed the heavy lifting for him on the campaign trail and protected him from opposition attacks. Since concerns about her Italian birth forced Sonia to make Singh her surrogate in 2004, the two have developed a strong relationship built on mutual trust and respect. That good feeling facilitated Rahul's entry into their troika and should help when he someday assumes the top spot. "Singh needs Sonia as much as Sonia needs him. And they work very well in tandem," says a senior Congress leader who asked not to be identified.

Singh is far from Sonia's puppet, as some allege. This became especially clear during the negotiation of the nuclear pact with the U.S. last year. Though there was much domestic pressure to scrap the deal, Singh managed to convince Sonia that it would end India's isolation and make it a much larger player in world affairs, even offering his resignation if the pact were scuttled, according to one of his former aides. Since then, with the emergence of Rahul, the team has become more effective. Though outwardly very different, the three leaders have much in common. For example, all are sensitive to the plight of India's minorities: Singh because he is a Sikh, Sonia because she was born a Christian and Rahul because he is linked through his grandfather to the tiny Parsi community. All three share a loathing for the Hindu supremacist rhetoric of the rival BJP. And all three are courteous and humble, traits that have endeared them to an electorate accustomed to imperious behavior from its pols.

Now the triumvirate's big challenge is living up to expectations. They face a slothful political system that is a holdover of the colonial mindset and they must contend with a culture of bureaucratic obstructionism that has outlasted many previous would-be reformers. Entrenched interests within Congress itself will also no doubt seek to derail Singh's programs and the Gandhis' efforts to make the party more democratic and to allow fresh faces to emerge. But with his newly enhanced grip on the reins of government, Singh knows that his 100-day deadline is a nominal one intended to light a fire underneath his subordinates. He has a full five years to perform. That said, the stakes couldn't be higher. This is more than Congress's big chance; it is India's. Failing to capitalize on it would be costly indeed, for the party, the country, and most of all, for its citizens.