It's all about 2014

As the countdown to 2012 begins, there is very little to set the party rolling. Indian industry is caught in a stasis, Indian bureaucrats are paralysed, the Indian economy is looking wobbly and India’s political class has already slipped into election mode. Trouble is we may have to brace for not just one party-pooping year ahead but several — at least until the next general election.

For a start, there is the Lokpal effect. While it’s spawned a new middle class hero of sorts, Anna Hazare, and irreparably damaged the status of the ruling party, more deeply, it’s thrown the government machinery into a further state of paralysis, as at this stage it is unclear how the Bill will eventually play out.

What started off as demand for finding a means to spot, stop and punish the corrupt, is turning into a farce of brinksmanship. After months of agitations, it seems what we now have is a version of the Bill that is unwieldy in scope and jocular in intent with the introduction of reservation.

The other fallout of all the focus on corruption and accountability, good and bad, is that bureaucrats in the corridors of New Delhi are already chafing over months of inaction following the series of scams. Few are signing off any decisions, be that clean and legitimate ones or those with a vested interest, because they fear that the dividing line is so fine that it is open to misinterpretation. That’s pretty much what Indian industry is pointing to when it talks of policy inaction in government.

Enterprises, which oftentimes paid their way for favourable policy, are being forced to rethink their ways after the telecom scam put several high profile faces behind bars. In effect, a lot of industry and a lot of bureaucrats will have to look at fresh ways of doing business, if at all.

Then there is the state of the great Indian economy. India’s rupee has depreciated sharply against the dollar, hurting its import bill, loaded up with oil. While India’s own economy may be in better shape than the West, the European region continues to roil. That makes the dollar a safe heaven, putting further pressure on the rupee. As the government finds ways to deal with a ballooning import bill, and trying to shore up the rupee is not one of them, there’s a lot more to worry about at home.

The fiscal deficit, a long way away from coming off by the targeted 100 basis points each year, is in reverse mode by widening. This isn’t helped by a government which is buttressing populist schemes, be that its ineffective rural employment guarantees or promised food security.

It’s all too clear that several state elections and indeed the 2104 re-run attempt are at the heart of its decision making. Fiscal prudence is not. That leaves one last man to the rescue — overseas money and business, with which India has a love-hate relationship.

We smart when America tries to protect its jobs and wince when we open up sectors of the Indian economy to them. In the current economic climate it’s a big goodbye to overseas money. America will no doubt try to protect its jobs as it tries to crawl out of an economic slide. Businesses will cut down new activity as the economic uncertainty in the west continues. And foreign investors will wait to see how India tackles its policy paralysis and who comes to the helm at the next elections.

That then is 2014. Still, there is little reason for anyone to bring out the fairy lights or firecrackers.

Anjana Menon is a Delhi-based writer