Economic Viewpoint

Tainted Reputation

For a government battling one crisis after another, the 2G spectrum scam is proving to be a millstone around its neck

It’s paradoxical that while the Indian National Congress (the largest constituent of the ruling UPA coalition) should be moving towards improving its political stature, the government it leads appears to be in a state of paralysis lurching from one crisis to another. Even as the country’s grand old party is poised to politically gain in the ongoing elections to the legislative assemblies of five provinces, the federal government headed by economist PM Manmohan Singh has not merely failed to improve the state of the economy but is also perceived to have turned a blind eye to corruption in high places.

When the results of the assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa are declared on March 6, one can predict with a fair amount of certainty that the Congress will be the biggest gainer in all but possibly the last two states, which are also the smallest. In UP, the Congress has a similar number of Members of Parliament (22 out of 80 MPs after the 2009 Lok Sabha elections) and Members of the Legislative Assembly (22 out of the 403 MLAs elected in 2007). There is no way the party’s performance will worsen. Irrespective of whether the Congress doubles, trebles or quadruples its tally in the assembly and/or is in a position to determine the composition of the new state government in Lucknow, the party’s 41-year-old youngest general secretary Rahul Gandhi will invariably be hailed as the only person capable of holding the top job in the world’s largest democracy.

What then happens to the current PM? Will he be asked to move to Rashtrapati Bhavan? Speculation is rife in the capital about an impending change of guard. There is an all-too-apparent contradiction in Rahul Gandhi making common cause with the poorest of the poor with the head of the government of the same political party propounding economic policies that have lead to greater benefits to the already well-off and widened inequalities of income and wealth. Food prices have come down in recent weeks. But that’s small consolation for the majority of the population whose real incomes have eroded sharply over the last four years on account of double-digit inflation.

The Supreme Court’s stinging indictment of government policies that led to the misallocation and under-valuation of second-generation telecommunications spectrum culminating in the cancellation of 122 licenses issued in January 2008 has confirmed the worst apprehensions of many, namely, that the then Finance Minister P Chidambaram and the PM watched helplessly as the former Telecom Minister A Raja ran amuck. In seeking to protect themselves from the taint of criminal culpability, Singh and Chidambaram have lowered the credibility of the incumbent regime. They have junked the notion of collective responsibility at the altar of expediency – that is, by attributing the re-appointment of Raja in May 2009 to the compulsions of coalition politics.

The 2G spectrum scam is a millstone around the neck of the government. However hard it tries to cover up the tracks, the scandal refuses to die. The analogy with the Bofors scam that contributed greatly to the defeat of Rajiv Gandhi’s government in 1989 is a bit too close to the bone for the Congress party. The country’s rulers want to convince the people that stern action has been taken against the corrupt and that important people (politicians, bureaucrats, corporate captains) have spent -- or are spending -- time behind bars. Yet, public anger against corruption refuses to abate.

The government is getting no kudos for the fact that influential individuals have been incarcerated. Paradoxically, credit is being hogged by honest sections of the judiciary and proactive elements of civil society. Time alone will tell if the writing on the wall portends more chaos and anarchy before there is progress and prosperity – a new era in which the government acts as a true custodian of resources (spectrum, natural gas, iron ore, coal) that belong to the people of India and not just to its corrupt businessmen, bureaucrats and politicians.



This article was originally published on March 03, 2012.

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