WHERE INDIA IS HEADED - The troubled present is obscuring Indiaâ€™s possibilities Rare bird In spite of all of Indiaâ€™s problems, I share the optimism about Indiaâ€™s long-term prospects of many like Raghuram Rajan: demographics give us huge human energy, our diversity makes us good at coping with different difficult environments, and obedience to precepts and interpretations of the Constitution are foundations for achieving our potential. The doubts are about the present. Our governments have been passive with neighbours and underestimated the threats posed by them. Jawaharlal Nehru trusted the United Nations to be just, and believed that Panchsheel would help keep up good relations with China; Indira Gandhi trusted Zulfikar Ali Bhuttoâ€™s word, and later governments, in spite of three victories over the Pakistan army and the throwing back of countless intrusions, could not assuage the hostility. We have not countered Chinaâ€™s aggressions with, for example, stapling visas for their nationals from Tibet or other volatile regions, or hedging our support for Tibet as a Chinese province. Our leaders must have clarity and courage. The judiciary and constitutional bodies have begun reforms. Among these are electoral and administrative reforms to curb criminals in politics; ensuring transparency in political finances, and letting administrators function without fear. Some pending reforms include expanding the judiciary and enabling quick trials, allowing investigating agencies freedom to work without interference, introducing severe penalties for all crimes including white collar and financial crimes. For a decade we have rarely seen and heard our leaders, the prime minister or the Congress president. Bumptious, recently-minted political â€˜leadersâ€™, instead, expound on or defend government policies. Corruption on a humongous scale has become rampant. The investigative and judicial systems were misused to avoid punishment to the accused, especially politicians. Poorly conceived social welfare schemes offer charity (subsidies, employment guarantees and so on) instead of building peopleâ€™s capabilities. Vast sums are stolen and claimed to have been spent on these schemes. There is no understanding of their adverse effects on prices, growth and employment. None of the numerous reports on reforms is heeded. With the court preventing criminals from legislating, the first step to improve the quality of legislators has begun. We can expect more cleaning. Growth has decelerated â€” with high inflation hurting the poor. The stability of the external value of the rupee is uncertain, with a decline in savings, followed by that in investment, foreign investment, employment and industrial production. We have fallen from the worldâ€™s pedestal. People are harassed, afraid and uncertain. But no foreign investor or lender expects India to fail; indeed they expect a revival soon. A new Congress president or a new government will bring rationality in public expenditures, and revival. The next elections could see neither the Congress nor the Bharatiya Janata Party forming a Central government, even to dominate a coalition. The ragtag bunch of regional parties might join with the communists to form a government, but we have experience of how weak and incompetent these were when they last ran a government. The Congress has emasculated any alternative leadership within. The BJP has Narendra Modi as front-runner, with L.K. Advani, Rajnath Singh and Sushma Swaraj as hopeful replacements. Advani as Union home minister displayed form (â€˜the iron manâ€™), not substance. Singh was a short-term chief minister of Uttar Pradesh, and a Union minister. The BJP collapsed in UP after Singh was chief minister. Swaraj has rhetoric, but no vision, nor leadership traits. Modi has administrative and oratorical skills, an ability to change his ideas with circumstances, vision in ruling Gujarat, financial integrity. He has articulated Hindu superiority. People say that he was not responsible for the killing of minorities in 2002 (other Gujarat chief ministers also experienced communal riots and many deaths, but were not accused). But his personality is aggressive, arrogant and, if in power, he may not be open to compromises that Indiaâ€™s diverse polity and coalitions require. His rhetoric tends to runs away with itself, away from facts (Takshila is in Bihar, Alexander came to the Ganges, Chandragupta Maurya belonged to the Gupta dynasty, Nitish Kumar abandoned Jayaprakash Narayan, Nehru did not attend Sardar Patelâ€™s funeral). On Pakistan and China, his instincts may be correct, but when in power, he has to weigh Indiaâ€™s relative military might. On the economy, he appears to give more emphasis to growth than building capabilities and giving opportunities to the weak and vulnerable. Charity (as in food subsidies, free health and education) is essential for the poor. Foreign investment on a large scale is essential and his stand has yet to be specifically articulated. There are many unknowns and doubts about what Modi stands for, what his core beliefs are, and how he will approach Indiaâ€™s complex and diverse polity in a coalition government. The Congress and all regional parties (the Samajwadi Party, the Rashtriya Janata Dal of Lalu Prasad, the Bahujan Samaj Party, the Dravida Munnetra Kazhagam, the All India Dravida Munnetra Kazhagam, the YSR Congress, the Telugu Desam Party, the Telangana Rashtra Samiti, the Shiv Sena, with the Nationalist Congress Party promoting Sharad Pawarâ€™s daughter), are dynastic parties. The BJP, the Biju Janata Dal, the communist parties and the Janata Dal (United) appear democratic, with regular elections. The membership decides on the leader of the party. Our democracy needs inner-party democracy in all. The Rashtriya Swayamsevak Sangh controls the BJP. It does not appear to interfere in government policy decisions by BJP governments at the Centre and the states. But the BJP has to show it accepts the RSS ideological commitment to Hinduism, by building a temple at Ayodhya, by vilifying minority communities, through anti-Western attitudes to lifestyle and culture. If a BJP prime minister is to act independently, he must head a multi-party coalition government with a â€˜coalition dharmaâ€™, with a popular standing like Atal Bihari Vajpayee had and Modi is developing. Vajpayeeâ€™s initiatives were born from this independence and mass appeal. The BJP has less interference by the RSS in state governments. Its successful governments earlier in Rajasthan and Uttarakhand, and now in Gujarat, Madhya Pradesh, Chhattisgarh, and Goa, have shown good economic development and innovative administration. The BJPâ€™s failure in Karnataka was because of the election of an inept chief minister, caste emphasis and corruption. Chhattisgarh, in spite of the Salwa Judum created to combat the Maoists that was struck down by the Supreme Court, has been effective in reaching social welfare schemes to the poor. Madhya Pradesh has also done well except recently. Goa has been transformed under the BJP. In these states, the party is subservient to the government. Congress rule in Maharashtra, Rajasthan, Haryana, Uttarakhand and Andhra Pradesh has not combated dissidence, rampant corruption, ministers using their powers to exploit women and to accumulate illegal wealth, suspect land transactions, and gross ineptitude. The longevity of Congress state governments depends on their subservience to the party and the Nehru-Gandhi family. P V. Narasimha Rao, unlike Indira Gandhi, was not paranoid about a â€˜foreign handâ€™ trying to disrupt the nation. He believed in a more open economy, greater international trade and investment, in private enterprise as a stimulator of the economy, and wanted friendship with all nations. The Congress follows the Indira Gandhi precepts: donâ€™t allow anyone else to rise in the party; encourage a dissident leader within each state government to keep the chief minister on his toes; use every instrument of government (the Central Bureau of Investigation, income tax authorities, enforcement directorate and so on) to keep supporting parties, Opposition and its own party members in line, and not permit a whisper against members of the Nehru-Gandhi family. Narasimha Rao succeeded as prime minister because he had a vision and implemented it. The present Congress government does not have one. A truly effective Indian democracy requires party democratization, it needs to cater to our diversity and not pander to only some groups, it needs transparency, prime ministers with courage and mass appeal, free media, and recognition of the judiciary as the interpreter of the laws and the Constitution. The author is former director general, National Council of Applied Economic Researc Where India is headed ****************************************************** A candid round up of the Indian election scene and the future. Each one has their own issues. The issues are analysed, thought there appears to be a subtle hint that Modi may emerge as the dark horse.