When Rahul Gandhi was appointed vice president of the Indian National Congress--the dominant partner in the United Progressive Alliance (UPA), India’s governing coalition--hype and hope soared. Reason and reality? Not so much. Gandhi’s uncontested elevation to the second-highest position in his center-left party (the highest, president, is held by his mother Sonia Gandhi) was preordained, which made the celebrations seem more than a little forced—and unleashed a volley of sniping from political opponents.
But how about business? Do India’s business community and foreign partners have any reason to celebrate?
Not yet, certainly. This appointment--or “anointment” as detractors would have it--has little to do with revitalizing the UPA’s economic policy now and everything to do with positioning for the national elections, now scheduled for May 2014. The party's ambitions for him are clear: "Irrespective of formal name or position, Rahul is our leader," says member of Parliament and former Congress spokesperson Abhishek Manu Singhvi. "Not only in 2014 but in every which way, I have no doubt that he is going to show us the path."
Still, it’s not too early to ask what business owners can expect if the Congress-led UPA returns to power under Rahul Gandhi. Here are five questions that ought to be on entrepreneurs’ minds:
1. Will corruption end? The short answer: “No.” Repeatedly over the past two years, the government has been exposed as up to its neck in graft, particularly in how it has allocated national resources like spectrum and coal. In government’s interactions with citizens, the corruption is as omnipresent as oxygen itself. Changing a culture that have become so ingrained would be difficult for the most seasoned politician, and Gandhi has zero track record in administration or governance.
2. Will Gandhi deliver fresh and youthful ideas? Not necessarily. There is no direct relationship between being a young leader—Gandhi is 42—and delivering what a young nation needs. Indeed, the makeup of the Congress party suggests the opposite. Almost two out of five “young leaders” in Congress are what writer and historian Patrick French calls hereditary members of Parliament (HMPs), or MPs who are children of existing leaders. Gandhi, whose grandmother and father were prime ministers and mother is party leader, is exhibit A of his party’s dynastic tendencies. To expect leaders who are so inbred to deliver “young” solutions because of age is naive. India doesn’t need youthful leaders, per se: It needs a platform, founded by leaders of any age, that enables young business owners to set up enterprises and create jobs and wealth.
3. Will enterprise get energetic support from a Gandhi government? Again, not likely. When in his in his January 20 acceptance speech Gandhi praised India’s 1970s-era “bank nationalisation” because it “restored the voice of the poor in the market for credit,” he forgot the repressive financial regime that went along with it. To gaze longingly back at a four-decade-old socialist error has little to do with looking ahead. Gandhi, however, correctly points out that “the tragedy of India” is that the people of “tremendous understanding, deep insights” have no voice, and “are kept outside our systems.” Broadening opportunity in India will indeed be good for business, but not if accompanied by throwing regulatory roadblocks in the path of entrepreneurs.
4. Will Gandhi be able to pull India out of its slowdown? Not if his focus remains on welfare and, as in the past, the idea gets hijacked by the bureaucracy down the line. In his addresss, Gandhi spoke about the Food Bill, a proposed law that has noble intentions but that will widen India’s already steep deficit and lift its already stiff interest rates even higher. Further, finance minister P Chidambaram, currently on an international road show to attract foreign investors, is talking about raising taxes on the rich. In good times, this is a good idea, as Warren Buffett in the US or billionaire Azim Premji in India have said. But when capital is scarce and tax laws are seen as unstable, adding another layer of insecurity is not what business owners need.
5. So, what should business owners expect? Three things. One: Over the next few months India will see how a person who has had leadership thrust upon him because of his surname puts his signature on India’s economic policy and political alignments. Two: As the putative leader of his party in the next elections, Gandhi will finally have to carry accountability—missing in the haze of yes-men around him over the past eight years—on his shoulders to counter his business-friendly rival Narendra Modi, leader of the right-wing Bharatiya Janata Party. And finally, if the Congress-led UPA returns to power and Gandhi can get the new government to deliver enlightened governance, it would be the miracle India has been waiting for.