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However noble the intentions and pressing the need, a leader who cannot persuade party colleagues to back his or her proposals for reform is rarely able to achieve much. Manmohan Singh, the Indian Prime Minister, has made little secret of his determination to make his country more responsive to global markets since taking the first tentative steps as Finance Minister to reform a sclerotic, inward-looking economy in 1991. As Prime Minister he has tried to continue the reforms. But he has found himself frustrated by the hostility of left-wing ideologues within his coalition, by the vociferous complaints of those allegedly bypassed by India’s prosperity and by armchair socialists in the West who delight in denouncing the iniquities of the market.
Since 2003, India’s economy has grown by more than 8 per cent a year. This is by far the most impressive growth that the country has enjoyed since independence. In less than a decade, India’s fortunes have been utterly transformed. A country that only 50 years ago could barely feed itself is now a global leader in high technology and a significant industrial power, and is becoming an acquisitive and aggressive investor in developed Western economies. Millions of Indians each year are joining the emerging middle class. Millions more who once had no way of escape from humiliation and abject poverty are able to save enough to educate their children and secure a rung for them on the ladder upwards.
The whingeing of Western bien pensants who want India to remain wedded to a Gandhian philosophy of village socialism is not only outdated; it is deeply destructive and racist. By citing the growing gap between India’s very rich and very poor, it gives spurious legitimacy to the claim that the market has only exacerbated disparities, while ignoring the extraordinary advances made possible for millions of poor in India, China, Vietnam and other countries that have embraced the opportunities presented by economic reform.
This politics of envy, unfortunately, also has a strong grip within India. Opportunist politicians are quick to exploit the discontent in villages and slums, which, thanks to the rapid spread of tele-vision, communications and education, have seen how a tiny minority of the super-rich live. The opposition Bharatiya Janata Party – which disastrously went into the last election, proud of its free-market achievements, with the slogan “India shining” – has turned against foreign investment and liberal market reforms. It has made much of farmers’ protests against the setting up of Chinese-style special economic zones. Other regional parties and splinter groups attack the coalition led by the Congress party for not doing enough to spread prosperity to their states and regions.
These pressures on Dr Singh will grow after Congress’s loss of control of Goa, the small southwestern state that has been a mainstay of the tourist boom. The party’s leaders will take fright at this fourth election defeat in a year and could draw precisely the wrong conclusions. They will argue that they must do more to maintain subsidies for the rural poor by diverting more funds to agriculture, fixing prices and trammelling India’s dynamic new industries in regulation and red tape. Recent budgets have seen a partial retreat from reform. Dr Singh must defy the ideologues at home and abroad and liberate those market forces that have already transformed India.
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