Business, Economics and Jobs

India: Congress bets on economic reform to revamp party's future


Indian Prime Minister Manmohan Singh (2L) and Congress Party General Secretary Rahul Gandhi (R) join Congress President and UPA Chairperson Sonia Gandhi (C) as she waves towards supporters during a party rally at The Ram Lila Grounds in New Delhi on November 4, 2012.



At a huge weekend rally, Congress Party President Sonia Gandhi and heir apparent Rahul Gandhi finally put their full might behind Prime Minister Manmohan Singh's push for economic reforms, in what was widely seen as the party's new election strategy.

The Congress party leaders addressed a crowd of hundreds of thousands of supporters on Sunday, attempting to reclaim lost political ground after being battered by a series of corruption scandals, the Associated Press reported.

The rally comes as Himachal Pradesh and Gujarat head to the polls, and as the party begins preparations for national elections to be held in 2014.

According to the Times of India, both Sonia and Rahul delivered a "ringing endorsement" of the PM's reform policies in their speeches, suggesting that the party has realized that its former populist stance has been damaged by the anti-corruption campaign led by activist Arvind Kejriwal. (Previously, the Congress attempted to own the "aam admi" or "common man" slogan, but Kejriwal has co-opted that territory with his attacks on the alleged cosy relationship between Congress leaders and business tycoons).

In his speech, Rahul hit out at the BJP and the Left for criticizing FDI in retail, saying the claim that it would drive small stores out of business was false, the Times of India said. "The truth is that food processing will help farmers," the paper quoted the Congress Party general secretary as saying.

"With Sonia also voicing support, Congress may have fully shed its squeamishness over unabashedly pursuing the growth mantra," the paper suggested.

To go beyond rhetoric, more actual reform is needed, though, the paper argued.

"There is an urgent need to follow up fuel price hikes and the FDI in retail therapy with a roadmap on passing the goods and services tax and direct tax code bills, increasing railway fares, moving forward on insurance and pension reform and ensuring passage of an improved company law." 

Meanwhile, even if that happens, political analysts said the image-boosting exercise did help the Congress take its message across but the move might be too little, too late, according to

On Sunday, Shekhar Gupta, the astute editor-in-chief of the Indian Express, described the maneuver as a "retreat to reform," in his weekly National Interest column.

"Irrespective of which side of the argument you are on, you have to take note of the fact that India’s largest political party has thrown off its carefully stitched cloak of hypocrisy," Gupta writes.

"This is some change from a party whose leaders usually de-risked themselves from almost anything remotely free-market or reformist by writing cautionary letters to the prime minister. Even on the nuclear deal, the party had thought long and hard before supporting the prime minister and after he had left them no choice. However, this “aberration” was also “corrected” almost immediately in UPA 2. The prime minister’s first foreign policy initiative, in his second term, at the Sharm el-Sheikh summit was snubbed promptly, rudely and so dismissively that he was left too bloody-nosed to take another step, except backwards. Now, it seems, he has discovered the nuclear deal moment again. If the nuclear deal, therefore, was about changing the paradigm on India’s larger foreign and strategic policy, this is an equally significant and audacious shift on economic discourse."

What has brought about the change?

"First of all, it is a realisation that the party is left with no other tricks in the bag," says Gupta. "It cannot fight the next election on the issue of corruption, or in other words, on its entire opposition’s (conventional, and neo-activist) terms. It may be useful, therefore, to shift the discourse to economics. And for that, it needs a perch more distant and distinct than old socialism."

It remains to be seen if the electorate will bite.