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India

Could Coalgate finally bring down Manmohan Singh’s government in India?

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In the span of 10 days, India has seen a government report on government abuse in awarding coal contracts morph into perhaps the most ferocious scandal of Manmohan Singh’s government.

The scandal — known as ‘Coalgate’ — stems from an August 17 report from the Comptroller and Auditor General of India that accuses the  governing Indian National Congress (Congress, or भारतीय राष्ट्रीय कांग्रेस) of handing out coal mining contracts to companies without going through the proper competitive bidding process, leading to inflated prices for the ultimate recipients.  The accusation comes.

Singh spoke about the scandal for the first time on Monday in the Lok Sabha, the lower house of India’s parliament, challenging the house to debate the issue in full and disputing the corruption accusations.  In turn, Singh was met with jeers and shouts of, “Quit prime minister!”

His remarks appear to have emboldened the opposition — the conservative, Hindu nationalist Bharatiya Janata Party (the BJP, or भारतीय जनता पार्टी).  BJP leader Sushma Swaraj responded to Singh by accusing Congress of swapping coal mining contracts for bribes:

“Mota maal mila hai Congress ko” (Congress got big bucks),” Swaraj said….

“Congress has got a fat sum from coal block allocation, that is why this delay (in amending the laws) was caused. My charge is that huge revenue was generated but it did not go to the government and went to the Congress party,” Swaraj said.

Her “mota maal” charge was confirmation that the party, unfazed by government’s criticism for holding up Parliament or lack of support from non-Congress players, is in no mood to step down from its “maximalist” demand for the PM’s resignation.

In the past week and a half, Coalgate has monopolized Indian politics and all but ensured that the Indian parliament’s monsoon session* will be held up as a result of the scandal.  Congress and its allies control the Indian parliament with 262 out of 543 seats so, short of a formal vote of no confidence, Singh and Congress will likely govern until the next scheduled general election in 2014.  The government currently has no plans to call a trust vote itself — Singh, by daring the opposition BJP on Monday to call a trust vote, knows that leftists parties that comprise the ‘Third Front’ in the Lok Sabha would loathe supporting a BJP-led initiative to bring down the Singh government.

Joshua Keating at Foreign Policy argues that Singh will likely survive this scandal, because some BJP members are also implicated in the coal scandal.  Keating lists the growing number of scandals that Singh’s government has already survived:

  • accusations that Congress bribed allies in return for their support in last vote of confidence in the Lok Sabha — in 2008 over the U.S.-India nuclear pact,
  • corruption with respect to awarding contracts for the Commonwealth Games,
  • the ‘2G scam,’ whereby the government sold mobile phone bandwidth at a loss of $30 billion to the Indian government, and
  • most ironically, the 2011 firing of the government’s anti-corruption chief PJ Thomas on corruption charges.

But it’s not been a good year for Singh — or for India — and while most people still believe that Singh is personally one of India’s most honest politicians, he could have a hard time weathering the latest corruption charge plaguing his party.  That’s especially true now, with the entire world worried about India’s weakening economy.  Just last month, Time Magazine Asia declared Singh an ‘underachiever’ in a scathing cover story.

Continue reading Could Coalgate finally bring down Manmohan Singh’s government in India? →

India

Indian blackout a metaphor for India’s political, economic and infrastructure growing pains

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With some pluck, The Guardian begins an editorial on India’s world-record blackout — nearly 700 million people without power — with the following joke:

Q. What do you call a power failure in Delhi? A. Manmohan Singh.

Womp, womp.  But the joke — and the blackout as a metaphor for India’s governmental and infrastructure impotence — cuts deep.

While authoritarian China pushes onward with so much of the world’s attention, India — a chaotic democracy of 1.2 billion — and its political leadership seem stalled.

As The Times of India writes, dubbing yesterday “Terrible Tuesday,” in “powerless and clueless” India, most of north India — including 684 million Indians — was submerged into a power-less world for the second day, with accusations levied at Uttar Pradesh, Haryana and Punjab for over-drawing power.  But that does not hide the fact of India’s antiquated grid system nor the fact of a domestic coal supply that can’t keep up with domestic demand.

On the day of the biggest power failure in, well, human history, power minister Sushil Kumar Shinde was promoted to home minister.

As The Times notes:

Moving Sushilkumar Shinde out of the power ministry now is like changing the captain of the Titanic when it’s reeling after hitting a giant iceberg. The country is in the midst of an unprecedented power crisis. For two days in a row, the grid has collapsed. This doesn’t cover Shinde with any glory. Yet he’s promoted as home minister. Even if that’s ignored, what’s pertinent at this point of time is that Shinde is likely to have some clue about the power problem; a new minister – who will be holding additional charge of the portfolio – will possibly have none.

The international view is not much better. The Guardian writes:

Whatever the unadmirable qualities of contemporary British politics, imagine any cabinet minister failing to apologise for presiding over such a first-class foul-up, then being awarded a promotion. Such, sadly, is the typical high-handedness of India’s political classes, who too often lack any sense of obligation to their voters.

It’s a brooding time for India today, with its most recent quarterly growth rate of 5.3% a nine-year low, its eight straight quarterly decline — while the United States or any Western European country would be elated at 5% annual growth, it means a slowdown of alarming proportions for a country that averaged nearly 8% growth in the past decade.

Banyan, The Economist‘s Asia column, points its finger at Coal India — a bloated, state-run disaster that cannot keep pace with demand:

Not enough coal is being dug up by the state monopolist, Coal India. As a result, generating companies, which own power stations, face the prospect of buying expensive imported coal, with ruinous consequences for their finances. Many are in danger of going bust. As this week’s cuts have shown, the national transmission system that shifts power around the country needs modernisation and investment—some $110 billion according to a McKinsey study. And finally the “last mile” local distribution companies, usually state-owned and which deliver power to homes and businesses, are all but bankrupt. Their tariffs are held artificially low by politicians more keen to win votes than balance the books. They have also chronically underinvested.

Tyler Cowen has also been out way ahead in sounding the alarm on India’s economic slowdown, as evidenced in an op-ed in The New York Times just last May, where he pointed to several causes to the slowdown.   Continue reading Indian blackout a metaphor for India’s political, economic and infrastructure growing pains →