The Fast Solution

After a 12-day fast in the heart of New Delhi, Kisan Baburao Hazare — popularly known as “Anna” or “elder brother” in the language of his native Maharashtra state — forced the government of Prime Minister Manmohan Singh to succumb. Worried, if not unnerved, by growing support for Hazare’s protest against corruption in public life and by the crowds he was gathering in the capital as well as in other cities, the Indian government agreed to strengthen a proposed anti-corruption law to create a new watchdog authority.

The Lokpal or ombudsman bill already introduced in Parliament and sent for discussion by a parliamentary committee would now also consider three amendments proposed by Hazare and his team of civil-society activists, organized under the banner “India against Corruption.” By itself, this is some achievement. The glow of Hazare’s success may, however, be short-lived as his youthful supporters discover his statist views may not be as conducive to their career ambitions as much as corruption was an obstacle.

The government’s somewhat clumsy initial response to Hazare’s protest, quick arrest and as quick a release had cost it much political capital. The Congress Party, which heads India’s ruling United Progressive Alliance or UPA coalition, confessed to being taken aback by the groundswell of middle-class support for Hazare.

Waving national flags and banners denouncing the government, the crowds also indicated the return of youth activism to street politics, essentially not seen since the launching of economic liberalization in 1991.

What did the youth quotient in the crowds represent?

First, they were emblematic of the growing popular impatience with a series of high-profile public scandals in India. The biggest of these was the controversial sale of telecom licences to ineligible companies by a minister now in prison. Close behind were allegations of sweetheart deals and extensive overspending in contracts for the New Delhi Commonwealth Games of 2010.

Second, they pointed to the political challenges of India’s youth bulge. Of India’s billion-strong population, those in the 15-34 age category numbered 350 million at the turn of the millennium. The cohort size is expected to peak at 485 million, out of a total population of 1.5 billion, in 2030. Sometimes called India’s demographic dividend, this phenomenon also represents a political risk. To the government — to any government — it means a constituency that will be very hard to please.

After a near-decade of high growth, India’s GDP is beginning to expand less slowly. In the past year, foreign direct investment has also fallen and in fact been significantly overtaken by export of capital by Indian companies investing abroad. This has been attributed to policy and regulatory bottlenecks and the Congress’ tepid commitment to economic reform.

Under its president, Sonia Gandhi, and her son, Rahul Gandhi — Congress general secretary and possible future prime minister — the Congress has focused on welfare schemes. Among these has been a national rural unemployment dole program that has actually served to push up wages in agriculture and industry. Analysts worry insufficient attention has been spent on keeping the growth engine chugging, opening up more sectors of the economy, cutting government expenditures and urgently filling India’s infrastructure gaps — or creating jobs.

As a result, the UPA government has lost support among Indian business and the urban middle classes. “We have focused on the politics of grievance,” agrees a Congress minister, “perhaps we need to temper it with the politics of aspiration.” In delaying labor law reform, opposing specific projects — including South Korean steel giant POSCO’s steel plant in Orissa, which would account for the single largest FDI infusion in India — and by deploying rhetoric that has married mercantilism with a rather romantic view of agriculture, the Congress has optimised the “politics of grievance” in the past few years.

Unfortunately, the Congress now finds itself being outflanked. Some of Hazare’s lieutenants are also practitioners of the “politics of grievance” and critics of economic reform. One of them, lawyer-activist Prashant Bhushan, used a seminar on the Lokpal bill a few months ago to link rising corruption to post-1991 economic policies: “In the name of privatisation and disinvestment, the government is now in a position to transfer … public money in the public sector undertakings to private hands … This has led to the creation of a corporate mafia.” Hazare himself has announced that among his upcoming protests will be one against the “commercialisation of education.” Presumably privately-run schools and colleges will be targeted.

There appears to be a disconnect between Hazare and his colleagues and the young Indians who came out to cheer them. The Indian middle class is bigger and stronger than ever before in history precisely because of the benefits of 20 years of economic reform. Impatience is directed at a political system that the middle class feels has not kept pace with economic change, in fact holding up economic change. As it happens, nobody in the Congress or the Hazare group is tapping into this reservoir of aspiration.

What is this aspiration born of? To an extent, it’s the empirical recognition that where reform and deregulation have been permitted, they have shattered the shortage economy and made life easier for the citizen.

Telecom is a standout example. Before the late 1990s, few Indians owned a phone. For those who did have a telephone, the instrument was a mixed blessing. Services were poor, the line often went dead. To bring a dead phone back to life was a complex exercise and often required cajoling petty officials in the neighborhood telephone office. Local linesman needed to be bribed regularly. These are not overstated stories, but born of real-life examples.

Today, petty corruption has disappeared from the telecom industry. Indians don’t need to bribe landline technicians or clerks at their mobile service provider’s office. Private-sector entry and keen competition have eliminated waiting lists. Whereas an earlier generation had to wait 20 years — again, an example from this writer’s own family — for a telephone to arrive, today phone connections chase consumers rather than the other way round.

Of course, as the ease of connectivity has grown, so has the market and quantum of revenue. This has made getting into the telecom business attractive, and licences and spectrum much sought after. The supply-demand asymmetry has moved to another level. Politicians such as A. Raja, the jailed former telecom minister, exploited this, allegedly converting issuing licenses for telecom companies into a means of private income.

As it happens, Hazare and his comrades prefer to see only the second part of the story, the graft that has followed expansion of telecom services. No doubt, the restive young Indians on the streets of New Delhi see the glass half full — and want it topped up double-quick. They know what neither Hazare nor the Congress’ 21st century socialists are willing to acknowledge: that the real and lasting antidote to India’s corruption is economic expansion.