The editorial, “Nuclear dodo”, Mint, 15 October, succinctly analysed the political situation after the Left’s rejection of the 123 Agreement. From the outset, the nuclear deal, with its subsets, the Separation Plan, the Hyde Act and the 123 Agreement, was fraught with grave risks, political and technical. While Bush and his political managers succeeded in de-risking it, at home, the Congress party failed to appreciate the political hazards of 123. This was evident till the last minute, when the committee for negotiation with the Left included legal eagles such as P. Chidambaram and Kapil Sibal, rather than political managers who could reach out to Prakash Karat and Sitaram Yechury. Besides, it is a moot question whether political brinkmanship was an appropriate strategy to coerce allies with more than 10% seats in the Lok Sabha.
Whether the deal would have gone through the Nuclear Suppliers Group (NSG) and the US Congress is also debatable. With Israel’s request for a special reprieve for non-NPT states “with strong non-proliferation credentials” for “supply of know-how and equipment” and China wanting a package for other states—a euphemism for Pakistan—the NSG may not have been able to agree in India’s favour. New Delhi would have then committed itself to inspections by the IAEA without getting the approvals for the supply of nuclear material by the NSG. That would have been more diplomatic egg on the face. This factor may also have had an impact on the Congress decision to back off, as much as pressure from the Left. The other relevant issue raised in the edit is the stultifying impact of the stand-off between the Left and the Congress on policymaking.
A back-of-the-envelope calculation will reveal that delay in policymaking could even curtail economic growth by a percentage point or more. Whether the same impact would have come about with an early poll may be unclear—a choice between a stable but indecisive government and an unstable and decisive one. But a clear trend—the stock exchange is not necessarily the only barometer—is the growing irrelevance of political events in the economy. A Sensex at 19,000 could be due to either hot money or global analysts’ confidence in India’s growth story. Increasing federalization with state satraps such as Narendra Modi and even Buddhadeb Bhattacharjee making investment decisions may also be a major factor. Besides, the second quarter figures are healthy despite a weak rupee as bellwether stocks such as Infosys show. Consumer loans are cheaper and supply of housing and automobiles is set to grow.
Perhaps the economy is trying to shake off its umbilical connect to the polity, as the common man laughs his way to the savings till with the many sops likely to come his way with an extended period of political wooing in the air.
Rahul K. Bhonsle is security analyst and editor of South Asia Security Trends, a monthly journal covering security trends in South Asia. Comments are welcome at email@example.com