The Asian tiger has been widely celebrated in recent years and it is two specific elements of the Indian framework that are most customarily lauded – the country’s democratic government and its fast growing economy. Interestingly, a closer look at the major events of 2011 indicates worrying developments in regard to these acclaimed elements, with India’s democracy and economy both under threat.
India is the world’s largest democracy. This year witnessed severe setbacks for the Indian government, with a crisis of accountability entrenching itself. The year was the setting for the aftermath of a series of scandals that had gripped the country in 2010, some of the major ones being the 2G Spectrum Scam, the Adarsh Housing Society Scam, and the Commonwealth Games. Intense public dissatisfaction gave rise to a massive popular movement early in the year, led by Gandhian Anna Hazare, which eventually forced the government to concede to introducing an anti-corruption bill in parliament. The protests continue unwaveringly, with efforts such as arresting the key figures involved in the scandals doing little to abate popular distress.
The anti-corruption movement seems to have acquired a stronghold in the Indian public sphere, even translating into isolated individual instances, such as when a young man publicly slapped and threatened to kill Union Agriculture Minister Sharad Pawar attributing his action to the latter’s alleged involvement in corrupt cases. The common Indian today doesn’t trust his political representatives, and the larger movement is indicative of this distrust.
This crisis of accountability has only been exacerbated by other key events in 2011, with three coordinated bomb explosions in Mumbai in July, and a major bomb blast outside the Delhi High Court in September. During the year, the government came under intense scrutiny for revising its poverty line definition and estimates, and the country fell in the Global Corruption Index from 87 to 95. These developments, along with economic predictions for 2012, paint a troublesome picture.
The Indian economy seems to be showing signs of slowing down, with the chief economist of the Deutsche Bank and the governor of the Reserve Bank of India both warning of a high downside risk to growth. In November, the rupee fell to an all time low, trading at Rs. 52.50 to a dollar, and corporate India recorded single digit growth, the worst in five quarters. 2011 witnessed significant fuel hikes and high inflation figures, the worst amongst BRIC (an acronym for Brazil, Russia, India, and China) countries, and on the 23rd of November, the Indian Stock Market crashed to a two year low. The private sector has for the first time experienced significant setbacks, with the chaos engulfing Kingfisher airlines being a leading example. Additionally, India’s current account deficit and fiscal deficit are worrying, and fresh investments are slow.
2012 could be a year of concern for the BRIC countries, with the "I" in it the first to turn shaky. And while it is true that any predictions for 2012 are akin to flipping a coin, a calculated estimate at this stage perhaps reveals a long-term trend having developed in the year 2011, which when we look back, may just be the year that India’s (democratic and economic) bubble burst.
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