India “in blundering retreat ” on corruption crisis

India’s endemic corruption is demolishing the credibility of its Congress-led coalition government and threatening prime minister Manmohan Singh with an inglorious end to a long career as an economist, bureaucrat and politician. This not because new corruption cases are emerging (though some are and there are plenty in the locker), nor of course that the prime minister is himself corrupt. The problem is that wide-ranging current cases are exposing how he has failed to exert his authority.

Meanwhile in Uttar Pradesh (UP), a battle is being fought not only for which party runs the massive state after current assembly elections, but for the credibility of the Gandhi dynasty whose leader-in-waiting, Rahul Gandhi, is staking his embryonic political reputation on changing the crime and corruption-wracked state.

These then are the contrasting faces of Congress and India’s political leadership – a tired crisis-ridden national government led by a prime minister who is 80 this year, and an heir-apparent to the ruling dynasty who is little more than half his age at 41. The prime minister does not seem to want to resign for having failed, and would like to hang on till he gives way to the crown prince , but the prince shows no sign of wanting to move in to the prime minister’s office.

“I have no aspirations to become prime minister,” Gandhi said at a nationally-televised press conference on the UP election trail this morning – an obvious line for him to take, but it could well be true.

Gandhi did however emerge this morning as a viable political future leader, full of much more strength and self confidence than he has shown in the past, though he did not produce any detailed policies for UP. Nor did he say how he would fulfil what he described as his “mission” to the state and try to solve its problems - would he for example risk his political reputation by taking on the extremely tough job of chief minister if he were in a position to do so?

The prime minister must have been tempted to respond to the country’s anti-corruption mood and resign last Thursday when the Supreme Court cancelled 122 telecom licences that have become the subject of a far-reaching corruption scandal since they were issued in January 2008. That must have been the worst day of his long career. He knew that he could have stopped the rot some four years ago but had not done so because the Congress Party, led by Rahul’s mother Sonia Gandhi, did not want to upset its coalition partner, the DMK party, whose nominee, A.Raja, was telecom minister.

Then, on Saturday, a lower court dismissed a criminal conspiracy case brought against Palaniappan Chidambaram, the home minister, for failing when he was finance minister in 2008 to stop Raja’s business friends from making massive profits by selling shares in the licences to Telenor of Norway and other foreign telecom companies.

That judgement is likely to be appealed. If Chidambaram were eventually found legally culpable for failing to stop Raja, the prime minister would be next in line for blame, along maybe with other cabinet ministers. There was speculation last week that Chidambaram would have resigned if the court had not dismissed the case, and that would inevitably have made the prime minister vulnerable.

Meanwhile Raja has been in jail for a year – the anniversary was on February 2. That itself (along with jailing of officials involved in 2010 Commonwealth Games contracts) is a mark of progress because no politician has been jailed for corruption for so long.

“Raja in jail UPA in handcuffs” ran a front page headline in yesterday’s Indian Express on a column written by Shekhar Gupta, the paper’s editor. On the handling of the 2G scam, he wrote that the government is “in blundering retreat from one indefensible position to another, much in the fashion of our army against the Chinese in 1962″ – a cruelly damning line given that the 1962 defeat is probably India’s biggest post-independence humiliation.

The good news last week was that India decided remarkably quickly on a $10bn-$18bn contract for 126 Indian Air Force fighter jets – with it seems no major corruption. The government is to start final negotiations for Dassault of France’s Rafale fighter, which I hear has been priced 6% below its rival, a German and British-led European consortium’s Typhoon.

That has triggered annoyance in the UK and sparked an argument over the value of the country’s £266m ($425m) annual aid to India if it does not help to win such orders.

There have also been suggestions that India’s pay-off will be French help on nuclear energy.

For a longer version of this post, go to John Elliott’s Riding the Elephant blog – http://wp.me/pieST-1Ar

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