India Insight

Too early to write off India’s Congress-led coalition

Is the sun setting on the Congress-led UPA government? India’s opposition Bharatiya Janata Party (BJP) is certainly riding high after victory in the southern state of Karnataka at the weekend , giving it a first chance to run a government in the south.Party workers of Bharatiya Janata Party (BJP) light smoke flares to celebrate the party’s victory in the state elections in Karnataka, outside the party’s headquarters in the western Indian city of Ahmedabad May 25, 2008. REUTERS/Amit Dave (INDIA)And it’s the latest in a long losing streak for Congress in state elections. The question is whether the ruling party can turn things around.

The economy certainly isn’t helping. Rising inflation seems to have already wiped out whatever electoral benefits the farmers’ debt waiver might have brought. A slowdown in growth, already apparent in industrial production statistics, won’t help either.

So the first problem for the government is to bring down inflation in time for next year’s national polls.

For now, Prime Minister Manmohan Singh is sounding optimistic, and a favourable monsoon would certainly help. But there is little relief on the horizon from global oil prices, and the government may soon have to bite the bullet and raise domestic fuel prices again.

Reining in inflation will be tough, but not impossible over the next year.

On the political front, all the momentum is with the BJP.

At times, Congress looks disorganised and rudderless. In several elections, Congress seems to have paid the price of failing to nominate a candidate for the chief minister’s job, and relying too much on the pull of the Gandhi family.

from FaithWorld:

India’s Hindu caste quotas edge towards private companies

The issue of redressing the imbalance of Hinduism's ancient caste system by creating job and college entry quotas for lower caste and other disadvantaged groups in India seems to be gaining headway in an election year. Now it may be the turn for private industry.

Medical students attend protest in Kolkata, 26 Sept 2006/Parth SanyalParties across India's political spectrum appear to be seeing caste-based reservations, as the quotas are known, as potential vote winners. It is a sign again that caste consciousness will become ever more important in what in theory is a secular Indian state.

Now multinationals enjoying the fruits of an Indian economic boom may find they are not immune. Much to the horror of many industrialists worried about their international competitiveness.

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