This further brings down the probability of meaningful reforms taking place. While the ruling government would be able to take decisions which are executive in nature, the choice set would be further truncated, given the potential political fallout of carrying through with some decisions like FDI in retail, especially given that the general assembly election is due in 2014. While the government seems to be determined to increase administered prices of various petroleum products, it may not pass muster, given the current political imbroglio. India’s creaking infrastructure (especially the physical kind) is for everybody to see. The recent power outage caused by excessive drawing of power some states from the national grid, exposed rickety state of India’s infrastructure. India continues to struggle to come out with meaningful land acquisition, environment and other related policies which has had a devastating effect on India’s mining sector, manufacturing (especially in the capital goods segment) and other related sectors. Political shenanigans are putting up roadblocks against FDI in retail, FDI in aviation, pension and insurance reforms, introduction of GST etc.
The ruling coalition government is clearly not in control, as far as governance is concerned. Their inability to exhibit strong leadership qualities engendered by their steady marginalisation in the political arena and the unending stream of skeletons (read corruption) tumbling out of the cupboard, they do not seem to have either the political and/or moral authority to govern. Not that the opposition parties can claim a high moral ground. Far from it, actually. But the clear lack of political strength of the ruling UPA government magnifies the problem of corruption in public life and hence governance becomes a casualty.