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February 2014

India’s Gridlock

By Tarunkumar G. Singhal, Raman Jokhakar, Chartered Accountants
Reading Time 3 mins
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Given the fluid nature of circumstances, both globally and domestically, it would be almost foolhardy to crystal-gaze into what awaits India in 2014. At the same time, though, there may be a less speculative way to gain insights into next year: how India deals with its inheritance.

More worrying, from the point of view of an incoming regime, is the logjam that the country has witnessed between the haves and the have-nots—breaking this gridlock is a necessary condition for the Indian economy to regain its momentum. While the haves define policy change, the politically empowered have-nots can stall its implementation.

Both anecdotally and empirically—captured so well in the jobless growth phenomenon of the first decade of the new millennium and growing inequality—it is a fact that few have gained from India’s remarkable economic turnaround over the last three decades.

No matter where we look—whether it be about targeting of subsidies, mining for precious resources, people-centric urbanization, developing new infrastructure like roads/highways (more recently the Navi Mumbai airport project, or setting up of the Kudankulam nuclear power plant in Tamil Nadu)—there is an unresolved face-off. And this gulf is only widening. More often than not, these disputes are now ending up in courts and the judiciary is forced to be the referee.

This is a less than optimal situation because differences of such nature mirror the political pulls and pressures in society and hence, should ideally be resolved by elected politicians. So far, politicians have struggled to come up with a template to resolve such vexing face-offs where there can never be a winner. Whether it is environment versus development, paying subsidies in cash or in kind, tariffs for electricity or water, there is no black and white answer. This is because there are far more stakeholders in the economy today than ever before, with varying degrees of economic capacity (or the lack of it).

This is what makes the 2014 general election so significant.

The country is on a cusp. Not since it gained independence has the country needed a visionary— who will have the political courage to attempt out-of-the-box solutions to end this deadlock— at the helm more than it does now. It will not be about strong or weak leadership, secular or communal leaders. Instead, it will be the ability to throw up a person who has the vision to redefine the “grammar of governance” in sync with contemporary India. So think hard before you vote this summer.

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