India at the Crossroads

Its reputation sullied, the Congress Party may suffer its worst-ever defeat

India, home to one-sixth of the earth's population, appears at a turning point in its history. The world's largest-ever election, involving some 590 million eligible voters, is unlikely to result in a clear verdict; none of the three major political groupings are projected to win an absolute majority in Parliament.

The point has been reached where the new government leaders cannot shy away from taking tough, harsh decisions without seriously undermining fundamental national interests. Their decisions could shape India's destiny for the next quarter-century or more. And by instituting electoral reforms, greater accountability, and corruption cases against tainted politicians, they would help stem India's recent political rot.

Some critical decisions looming large on India's horizon are related to its search for great-power identity. With the 50th anniversary of its independence approaching next year, the world's second-most-populous nation has yet to develop a clear vision and blueprint on how to transform itself from being a regional actor to an important player on the Asian and world stage. There is growing domestic consensus, however, that the country should focus on building its economic and military strength.

For the moment, the political scene, reeking of corruption and opportunism, is expected to get murkier before starting to clear up. Indian politics in the days after ballot-counting begins May 8 will likely turn into a virtual auction mart as the myriad parties jostle to come to power through fresh realignments and "horse-trading."

Once the dust settles, the new ruling coalition will confront a host of pressing issues neglected or not adequately addressed by the Congress Party government of Prime Minister P. V. Narasimha Rao.

Among the key challenges are how to achieve the desired high economic growth as part of a liberalization drive; build cost-effective defenses against two powerful and closely aligned neighbors, China and Pakistan; and control demographic pressures in a country whose galloping population is set to cross the 1 billion mark by the end of this century. In addition, the new government will have to tackle ethnic and regional unrest, an ebbing but still bloody Muslim insurrection in Kashmir, and environment-related problems across much of the nation.

Five years of feeble, corruption-besmirched governance by the Congress Party have convinced many Indians that coalition rule may not be a bad idea. After all, multiethnic India itself is a coalition of diverse interests.

Rao was widely seen as a stopgap arrangement when he rode to power on the sympathy wave triggered by the assassination of his party leader, former Prime Minister Rajiv Gandhi, in the 1991 election campaign. Once in power, Rao showed his wiliness by side-lining all his potential challengers in the party and turning his minority support in Parliament into majority support by luring opposition lawmakers to his camp - in some cases with bribes, according to recent court testimony.

Rao, satirized as an indecisive politician shirking hard decisions, is almost the antithesis of the sort of leader India is crying for today - dynamic, charismatic, and visionary. The only resolute course of action he undertook as prime minister - initiating radical economic reforms - was forced upon him by an acute balance-of-payments crisis that coincided with his appointment.

With India on the brink of external-debt default, Rao began reversing four decades of socialist policies to help secure multilateral credit assistance. His government dismantled many trade and investment barriers, scrapped licensing controls, reduced tariffs, and floated the rupee.

But government spending continues to swell. The mammoth public sector remains inefficient and unprofitable, and labor laws still bar closing unproductive units. The number of Indians with "iron bowl" government jobs exceeds the 17 million population of Australia, nourishing India's proverbial red tape, which still intimidates citizens and foreign investors alike.

After a string of state-election defeats, Rao has slowed the much-heralded market reforms that catapulted India into the United States' list of the top 10 emerging markets. The reform program and Rao's image have been pummeled by a succession of scandals involving speculative stock trading, disinvestment in government-owned firms, opening up of the telecommunications sector, and political nepotism.

Indians have widely come to see the privatization drive as a windfall for corrupt politicians. The only silver lining is the increasing assertiveness of India's Supreme Court, which has ordered probes into several scandals.

Indian voters in the past have demonstrated their acumen by throwing out politicians who became too big for their boots, including Prime Minister Indira Gandhi and her son, Rajiv Gandhi. Now the voters appear in a mood to inflict possibly the worst-ever defeat on the Gandhis' Congress Party, which has governed India for all but five years since independence. With a fast-eroding grass-roots base, the party seems in its twilight era.

The end of the Congress Party raj should unburden India of the political baggage it has long carried, putting it on a new, ambitious path to the 21st century.

'Hard' governance may help India's capitalist growth and rein in its population explosion. But it will also increase nuclear worries for the rest of the world. There is increasing recognition here that if India is to concentrate fully on economic modernization, it has to feel secure from external interference or aggression. With real defense spending continuing to plummet, India has put on hold conventional-force modernization for more than six years. As the gap with China widens and Chinese nuclear and missile technology continues to flow to Pakistan, a nuclear deterrent is becoming more attractive to New Delhi.

The challenges of building a reliable missile-based nuclear deterrent without testing, however, are forbidding for India, fueling its opposition to the proposed Comprehensive Test Ban Treaty. Today, India confronts an agonizing moment of truth on its long-held nuclear option: If it does not address the technical needs before a test ban takes effect, the nuclear option could become nothing more than theoretical.

Thus a key decision awaiting the next government is whether to renew testing 22 years after the country's lone nuclear detonation. That's of major importance to India - and to a world trying to suppress the spread of such weapons.

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