Delhi's year of drama and stasis
The middle class and investors are frustrated with India's corrupt and inept politicians

India Kangaroo/Flickr

Protesters march in an Anna Hazare anti-corruption Rally in Delhi

Article Highlights

  • Two large conclusions about 2011 in #India remain unmistakable

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  • India's inability to address corruption and improve governance could derail economy

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  • How India addresses Anna Hazare movement and corruption will define the country's role in #Asia

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It is only fitting that as the year draws to a close, the Anna Hazare movement—which has dominated India's headlines since it burst on to the national stage in April with a demand for a tough new anticorruption ombudsman—is once again in the spotlight.

Today Mr. Hazare, the 74-year-old activist who leads the movement, is scheduled to begin his third public fast this year. As of Boxing Day, more than 100,000 people had signed up online for his campaign to fill India's jails with protestors who feel that a bill currently before Parliament will create a toothless ombudsman (or lokpal in Hindi) beholden to the very politicians it's meant to police.

Whether middle-class protestors fed up with corruption in public life will indeed end up flooding India's squalid prisons remains to be seen. Their current grouse hinges on abstruse technicalities about the independence of a federal investigation agency—not exactly the sort of thing that fires the average person's imagination. Mr. Hazare's supporters and the government may well come to a last-minute compromise before the three-day campaign kicks off on Dec. 30.
Regardless of how the drama unfolds, two larger conclusions about 2011 remain unmistakable. Indian politics has entered a new era of turbulence, fueled by middle-class anger toward corrupt and inept politicians. And an inability to improve governance—to effectively link this new politics to better policies—could derail an economy that not so long ago was regarded as one of Asia's most promising.

"Where else would activists demand the creation of a new unwieldy government institution to solve problems brought on in large part by other large unwieldy government institutions?"--Sadanand Dhume

To be sure, neither protest movements nor middle-class disdain for politicians are new phenomena in India. Grassroots outrage against perceived high-handedness and corruption helped topple governments in New Delhi in 1977 and 1989, and the rise of the Hindu-nationalist BJP to power in the 1990s was fueled as much by its (then) perceived probity as by passions released by its campaign to build a temple on the site of a disputed 16th century mosque in the northern town of Ayodhya.

Nonetheless, the Anna Hazare movement marks a watershed. To begin with, aside from Mr. Hazare—a former army truck driver with a seventh-grade education—the movement's troika of high-profile lieutenants embody middle-class striving. Two of them, Arvind Kejriwal and Kiran Bedi, first entered public life through a brutally meritocratic national civil service exam—as a tax official and a police officer respectively. The third, Prashant Bhushan, practices law in the Supreme Court.

All three are effortlessly bilingual in English and Hindi. They stand apart from a political class seen by its detractors as claiming power based on dynastic privilege and crude appeals to caste and creed, or by effectively buying the votes of the poor through populist government programs.
The Hazare movement's ability to mobilize followers using the Internet, to communicate effortlessly through India's freewheeling 24-hour news channels, and to bring a notoriously apathetic middle class to the streets for a public cause, has no parallel in independent India's history. In short, for the first time since the introduction of universal suffrage in 1947 drowned a tiny minority of educated Indians in a sea of peasants, the middle class—some 300 million people by the most generous estimate—has found a voice in public life.

It's not clear, however, that India's democracy will respond with the flexibility and imagination it needs to channel this new awareness toward practical solutions. If anything, the evidence thus far is discouraging. The Hazare movement itself—though sparked by genuine idealism—pushes the same old tired statist solutions to policy problems that have kept India backward to begin with.

Where else would activists demand the creation of a new unwieldy government institution to solve problems brought on in large part by other large unwieldy government institutions? For its part, instead of an honest effort to give the country an independent anticorruption czar—an unexceptionable goal in itself, if only a partial solution to the problem—the government has raised extraneous issues such as caste and religious quotas in the proposed new body.

Meanwhile, foreign investors have begun to lose their stomach for the glacial pace of India's reforms. The suspension last month of a long-awaited decision to allow foreign direct investment in multibrand retail, which would have allowed in global stores such as Walmart and Tesco, crowns years of policy paralysis. Foreign investment fell for the third straight month in October to a paltry $1.2 billion.

The rupee, Asia's worst performing currency in 2011, has lost nearly 20% against the dollar since March. Despite GDP growth slowing from nearly 9% to under 7% per year, and a fiscal deficit sure to overshoot the projected target of 4.6% for the year, the government has decided to plow ahead with an expensive food security bill that will offer subsidized grains to about two-thirds of the population.

In an ideal world, the middle-class awakening embodied by the Hazare movement would force India's politicians to address the issue of corruption while deepening economic reform. Instead, the government has responded to the challenge with a familiar mix of obfuscation and populism. Should this trend continue, 2012 may well be the year that India's economy returns to a familiar place—as an Asian laggard overshadowed by its East Asian peers and largely ignored by the rest of the world.

Sadanand Dhume is a resident fellow at AEI

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