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India's Conservatives Are Reaping The Spoils Of Kashmir


International Outlook

India's Conservatives Are Reaping the Spoils of Kashmir

In politics, war can work wonders. Just four months ago, it looked as if the Congress Party, which had ruled India for most of its 50 years of independence, would sweep back into power. But when Indians go to the polls on Sept. 5, for the third time in four years, the likely winner will be Prime Minister Atal Bihari Vajpayee and the governing Bharatiya Janata Party.

Fueling Vajpayee's comeback was India's recent victory over Pakistani-backed rebels in the Kashmir conflict. A recovering economy and surging stock market have also helped. Polls indicate that the BJP and its numerous allies may win enough legislative seats to last out a full five-year term. The Congress, led by Sonia Gandhi, the wife of slain former Prime Minister Rajiv Gandhi, limps far behind.

This is more than a political upset in the making. At bottom, it marks a national change in consciousness. Congress has long billed itself as the party of Indian modernization--and successfully ridden a wave of popular aspirations. Suddenly, that looks like yesterday's stance. In today's India, Sonia Gandhi's "progress for all" rhetoric, focused on the plight of the downtrodden, sounds patrician and retrograde. The BJP, by contrast, is coming across as the party of economic growth and military might. It effectively is preaching a form of identity politics--that Indians can stand tall in the world just as they aRe.

The BJP's reversal of fortunes has amazed most analysts. For much of its 13 months in power, the Hindu nationalist BJP has had a reputation for religious bigotry. The coalition it led was marked by incompetence, and Indians had grown disillusioned with the chaotic transition from socialism to capitalism. After a food crisis last September, the party lost local elections even in strongholds such as New Delhi.

But the conflict against Muslim separatists in Kashmir tilted the scales. The rebels received the tacit support of The Pakistan military. Feuds with its neighbor have always been an emotional issue for Indians; even cricket matches between the two countries are highly charged affairs. The Kashmir issue gave Indians the common enemy they needed to renew their sense of national power.

Confidence in the economy, long a vulnerable point for the BJP, has also improved. Just last year, the BJP's protectionist tendencies left businessmen and foreign investors feeling rattled. Now, the government's aggressive promotion of the information technology industry has boosted software stocks and exports. So far in 1999, industrial production is up by 5.6%.SONIA'S SLIDE. Indeed, the BJP's reform program is now virtually indistinguishable from the Congress Party's. Both vow to keep reducing government controls and open up more segments of the economy to private investment. Both also promise growth of 8%, compared with a forecast of 6.5% this year. The BJP's reforms are also rallying investors. The Bombay Sensex index is up 54% this year. "Politicians are finally realizing that it's all about the economy," says Surjit Bhalla, a director at New Delhi's Oxus Fund Management.

The ruling party also benefited from the collapse of Sonia Gandhi's campaign. Despite speaking fluent Hindi, Italian-born Gandhi couldn't shake her image as a foreigner, which doesn't sit well with India's nationalistic mood. Nor did she capitalize on widespread anxiety that the BJP's Hindi nationalism, which in 1992 led to the razing of a famous mosque, had gone too far. The hope is that with a strong showing at the polls, Vajpayee can control his party's most radical elements. Most Indians now seem to see him as the best hope for a modern India, rather than a retreat to the past. By Manjeet Kripalani in Bombay; Edited by Patrick SmithReturn to top

French Tax Cuts?

Pressure is building across the political spectrum for tax cuts in France as Socialist Prime Minister Lionel Jospin wraps up his budget plan for 2000. Jospin has already proposed targeted tax cuts to spur housing construction. But Laurent Fabius, Socialist leader of the National Assembly, is urging him to go further, warning that French voters are tired of bearing one of the heaviest tax burdens in Europe. Economists also warn that France is at a growing competitive disadvantage as Germany and other governments slash corporate taxes to stimulate business. France can afford tax cuts: Government revenues are running nearly 8% above last year as the economy strengthens.Return to top


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