September 23, 2010 / 10:28 AM / 9 years ago

Analysis: Games fiasco highlights fissures in India government

NEW DELHI (Reuters) - The Commonwealth Games fiasco opens a weakened Indian Prime Minister Manmohan Singh to dissent within his government and may add to a policy drift over issues from economic reforms to dealing with a Kashmir revolt.

Singh’s Congress-party led coalition will likely stay in power to the end of its term in 2014. But a perception of a floundering and out-of touch leadership may bolster the rise of a more leftist inner circle led by family scion Rahul Gandhi.

The Games were meant to show India’s global clout, but filthy venues, a bridge collapse and a suspected militant attack have added to a sense the 77-year-old, increasingly overshadowed by Rahul, doesn’t control the reins of power 6 years in office.

An increasingly influential Rahul could push Congress to the left on policies ranging from social programs to stricker controls for industrial projects to protect farmers, overshadowing Singh’s attempts to liberalize Asia’s third biggest economy.

For the moment, Games criticism is being heaped on officials underneath Singh, such as its organizer and Congress party lawmaker Suresh Kalmadi. But this week Singh was forced to enter the fray, with growing calls for India to get its act together.

“Multiple centers of power are emerging,” said political analyst Swapan Dasgupta. “They’ve always existed but this time they are becoming more public and the Games will only exacerbate that. Succession is always on the back of people’s minds.”

Many politicians may use a national embarrassment to juggle for influence. Rahul, son of the country’s most influential politician Sonia Gandhi, is thought by many in India to be waiting in the wings to succeed Singh.

This week, in the middle of the Games controversy, the prime minister’s own press spokesman made headlines when he appeared to criticize the government’s lack of vision. He said the comments were taken out of context, but the damage was done.

“Congress is by nature a status-quoist, pragmatic party,” Harish Khare, was reported by local newspapers as saying on Tuesday. “It does not believe in any conviction. (It’s) only conviction is to win elections.”

Those criticisms are rising in tone. Rahul also made headlines recently by effectively telling Singh to pass a land bill to help farmers.

Other politicians, like Environment Minister Jairam Ramesh seen close to Rahul, have appeared on a different page to Singh on how to enforce environmental rules for industrial projects.

No one is doubting the government’s stability. The main Hindu nationalist opposition, the Bharatiya Janata Party, is in disarray. The ruling coalition will likely survive until 2014, or when and if it calls early elections.

But Singh appears unable to take advantage of near double-digit growth, stocks at more than a two year-high and strong capital inflows. And frustration among Rahul’s followers, who want to target more funds to social programs, may be growing.

Many foreign investors have priced in the slow pace of India’s drive to open up the $1 trillion economy, with any surprise reform a upside for investors, company executives say.

CONTRAST WITH ASIAN GAMES

In India’s last major sports event, then Prime Minister Indira Gandhi put her son Rajiv to run the 1982 Asian Games, a job that helped usher him into succeeding her as prime minister before he was assassinated in 1991.

But Indira was an autocratic and charismatic leader once labeled “the only man in her cabinet.” Singh, by contrast, is an unassuming politician never directly elected to office.

This time round, both Sonia and Rahul have been markedly distant from the Games. Singh left it to middle-ranking leaders like Kalmadi, a decision that has boomeranged.

“Singh’s authority is increasingly coming under question and there will be some hard-thinking within Congress,” said political analyst Mahesh Rangarajan. “What we are seeing in India is a succession is slow motion.

Few would dare to push out Singh, widely seen as India’s most honest politician.

But widespread reports of corruption at the $6 billion Games, where costs ballooned more than 17 times, can hardly help the leftist Congress party with its pro-poor image.

While it relies mainly on support of poor farmers, who account for half of India’s 1.2 billion plus population, 24-hour news cycles mean these controversies have longer tentacles.

The reports may alienate a middle class, and millions more voters with middle class aspirations. Congress in part won the 2009 vote due to this vote bloc drifting from the BJP.

“The middle class votes more on issues than regional and caste politics,” said Yashwant Deshmukh, head of C-Voter Polling Agency . “They are more fickle and we may see a reaction.” But as rumblings surface around Singh, other commentators say there is still a long way to go before his rule is history.

“People have always underestimated Singh,” said Jahangir Aziz, chief India economist at JP Morgan, referring to Singh’s ability to survive six years in government. “People mistake his soft-spokenness for weakness. That weakness is simply not there.

Editing by Paul de Bendern and Miral Fahmy

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