The litany of scandals of recent months culminating in the 2G spectrum allocation and the easing out of Telecom Minister Mr A Raja, only revealed the extent of decay in the polity adding to its discomfiture. Abroad, the sheen is off the image of dynamic India on a pristine growth path.

Even if most of the scams originated in private greed with accomplices in every sphere, including bureaucrats, the Government of the day cannot escape blame for smugness and laxity. Its lack of serious attention to bring down double digit food inflation hurting millions for two years was an example of masterly indifference. Mismanagement which it cannot correct within, rather than supply constraint, was the limiting factor as Government had substantial food stocks to be deployed to force down prices but allowed to rot. Glowing speeches suffused with “aam admi” and “inclusive growth” are no substitute for decisive action on the ground.

While the fragile Government withstood successive opposition onslaughts in Parliament over its failure to bring down prices, without running the risk of a vote, and was also lucky to have been spared massive citizen protests over persistent inflation, as in other countries, UPA cannot escape from the opprobrium for the scandals under its nose. No doubt, certain swift actions have been taken in cases where Congressmen holding public office were involved or came under cloud.

The winter session of Parliament had to be adjourned sine die without doing any business for 20 days as a determined opposition led by BJP insisted on a JPC probe into the telecom scandal while the Government firmly rejected the demand maintaining that all related issues were under investigation at appropriate levels and the CAG report hinting at a massive loss to the exchequer was being gone into by the Public Accounts Committee of the two Houses.

But there will be no getting away for the Government for months to come from the shadow of the Legion of Scams, some of the starred ones like 2G spectrum allocation already under CBI investigation. More importantly, the Supreme Court is now seized of all aspects of the telecom scandal and hearings are on. The Court has also called for the complaint on the basis of which authorities started tapping the telephones of corporate lobbyist Niira Radiah with a host of people including politicians, corporate leaders and media personalities.

With the coalition constraints, which have taken a heavy toll of the prestige of Government, it was not easy for the Prime Minister to call for the resignation of Mr Raja at an early stage, even when he was flouting procedures laid down for issue of spectrum allocation licences. This was because he was the chosen nominee for the key portfolio of the DMK leader Mr Karunanidhi., who even staged a drama of sorts in the capital in May 2009 to get him installed as he desired.

Even as a verdict on Mr Raja’s alleged involvement in a mighty fraud will take some time, Mr Karunanidhi is re-working his strategy to face a formidable foe in AIDMK leader Ms. Jayalalithaa, in the Assembly elections in May. After stoutly defending Mr Raja, playing his ‘Dalit” card, Mr Karunanidhi now says if allegations against him are proved, he would be expelled from DMK. Mr Karunanidhi needs the Congress more than before for the DMK-led alliance in Tamil Nadu, evidently giving up his earlier dream of going it alone to establish a “Dravidian state”. He had sidelined the Congress for power-sharing for five years.

Ms. Sonia Gandhi, Congress President, with all the praise she has showered on the DMK leader, since 2004, for his role in enabling UPA’s ascent to power at the Centre, may play safe while securing a stronger footing for her party in post-election power-sharing. The Congress, ensconced at the Centre, is working on its own strategy of survival of a Government with a battered image and growing doubts about its ability to steer its way out of the current turmoils to be able to give the country not merely economic growth but clean administration and credible governance.

Ms. Gandhi acknowledged recently that while the economy may be increasingly dynamic, “our moral universe seems to be shrinking”. The tapped phone calls of corporate lobbyist Naiira Radia, working for two major conglomerates, as leaked out in sections of the press, have brought to light murky dealings in high places, as if to validate the Congress President’s observations.

The reverberations of scandals in India and the leaked telephone tappings have spread far and wide, dismayed investor firms and evoked depressing commentary from global economy watchers who tend to see an outgrowth of “crony capitalism and inadequate oversight” fuelling widespread skepticism about the Indian economy. Both Indian governance and capitalism have come under a major test and it remained to be seen whether the system could mete out punishment for wrongdoing, according to a report in the New York Times. The scandal has even tarnished the Prime Minister Dr Manmohan Singh considered “the most upright and squeaky politician in India” the report said.

The newspaper quoted warnings of damage to the economy and social fabric from unfettered corruption by two leading US-based Indian economists who have in the past advised the Government on financial sector issues. ‘Graft-ridden approach to privatization could leave long-lasting scars that hold India back from reaching its potential”, said Prof Eswar S. Prasad of Cornell University. Open corruption and rising stark disparities in wealth are “a volatile mix that could affect social stability if the benefits of growth do not filter down”, he added. Prof. Raghuram G Rajan at the University of Chicago said if people got away with taking bribes and no one was getting punished in the government structure, “everyone starts trying to do it”. Big corruption with little punishment becomes an even worse disease”.

These developments in India have caused some misgivings in the corporate world about the future. The Prime Minister Dr Manmohan Singh felt called upon to give fresh assurances to Indian businessmen, let alone foreign investors, that Government would provide “an enabling environment” conducive for the growth of the corporate sector and a “level playing field for private businesses, free from fear or favour”.

He referred to the “nervousness” arising out of powers to tap phones for “protecting national security and preventing tax evasion” and justified the need “in the world that we live in, though these powers have to be exercised “with utmost care and under well defined rules, procedures and mechanisms”.

With elections in Tamil Nadu, Kerala, West Bengal and Assam, and tensions already building up in Andhra Pradesh, which awaits the Sri Krishna Commission report on the state's future, the Congress and the UPA Government will go through some difficult months in the new year. Budget-making and other policy measures would have to be tailored to the emerging political situation for a Government thrown into defensive by a recalcitrant opposition, even if in the budget session it begins to play the rules of the game. (IPA Service)