Claude Moraes asks where record growth and a centre-left Congress coalition government are taking India

I WAS an immigrant from India to Britain aged six and am now one of 20 or so parliamentarians of Indian origin in Europe or the United States. We were invited to return last month to talk directly to India’s Prime Minister Manmohan Singh and see the reality behind India’s headline-making economic growth.

Hardly a week goes by without India’s status in the globalised world in the news. On a single day in October, it was announced that an Indian national, Mukesh Ambani, had replaced Bill Gates as the richest person on the planet, while multinational Gap was exposed for using Indian child labour – allowing the world to see again the extent of child exploitation in the sub-continent.

That there is great pride amongst the Indian diaspora about India’s economic growth reaching annual peaks of 9 per cent and the country’s new-found soft and hard political power in the region is clear. There is little doubt that poverty is being reduced and that the growth is for the long term.

Yet there are still great problems. India’s economic growth is very much based on huge domestic consumption, in contrast to the export-led growth of China.

Improvements in infrastructure are badly lagging behind. In many ways, India does not appear to be a country on the verge of economic super power status. The contrast between the gleaming Infosys complex in Bangalore and the grinding reality for India’s largest economic sector is stark. In the caste-ridden smallhold farming sector, the increase in the number of farmers committing suicide because of debt was one of the headlines when we arrived in the country.

So where is the still-relatively new government of the Congress Party taking India? A myth about India’s economic take-off is that the nationalist BJP government, defeated by Congress in 2004, created the reforms which power the recovery even today. The reality is that painful initial reforms were initiated as far back as the 1980s and the more radical ones of 1992 were put in train by Congress.

The objective evidence shows the BJP inherited a successful economy and, to its credit, built on this. However, the heavy lifting had already been done.

The architect of the second round of reforms was Manmohan Singh, who was then finance minister. Depending on the yardstick used, it is arguable that around 300 million Indians have seen a radical improvement in their lives in the past 15 years.

It is an interesting aspect of India’s recovery that it was instigated by Congress, which is on the centre-left and often radical in outlook. The party’s policies include controversial but necessary positive discrimination measures to tackle the deep inequality suffered by India’s lower caste communities.

The concern of progressives in India and beyond is that economic growth should continue and start to benefit the millions who have been left out of the success story. In both India and China, the middle classes are vastly better off, but the new wealth is not trickling down fast enough. Any visitor to India will see the many difficulties still facing the country. Progress is uneven and economic growth has driven people from the countryside to the major cities, which are unable to cope with the influx. Where major infrastructure projects such as the road links between India’s main cities are underway, the environmental costs are great. India is also greatly energy dependent, which means tough choices on nuclear power will have to be made.

The good news for India is in some comparisons with its giant neighbour. In China, where the wealth differentials are greater, the lid is kept firmly on dissent. India’s democracy, regardless of its unwieldy nature, marks a clear difference with China. Governments like the BJP one, who do too little for the poor or shift too sharply away from the notion of secular country, are thrown out. India’s free and active media ensure the spotlight remains on whoever takes the reigns of the economy and the secular tradition.

While China is well ahead of India in the sheer scale of its export-led growth, the World Bank puts India ahead of China on the four main governance indicators: quality of regulation, rule of law, control of corruption, and freedom of expression and accountability. For India, saddled with widespread corruption since independence, these comparisons are a breath of fresh air.

So far, Indian newspapers take the view that Congress, while sharing power in coalition with the Communist Party (the United Progressive Alliance), have kept the reforms on track. Under Manmohan Singh, there is a sense of quiet national pride in the country’s improvement, differing somewhat from the ultra-nationalist “India Shining” strategy of the BJP.

There is clear evidence of investment and job creation. The business community is making the critical move from traditional industries such as textiles, which fed domestic consumption, to new industries – electronics, car components, information systems and pharmaceuticals. As a result, India now has a trade surplus with China.

There is much debate in the Indian press about whether the high-tech and outsourced industry of Hyderabad, Chennai and Bangalore are really the major economic drivers as portrayed in the West, given they make up only a small percentage of the economy. But under the new coalition, those industries have continued to flourish.

Inevitably, there is an underlying fragility to the government. The recent row over India’s civil nuclear deal with the United States is a symptom of that. Congress wants a deal with the US to end the 30-year bar on the use of civil nuclear power. The Communists see the issue as the ultimate dividing line in the coalition, which nearly sparked a general election in recent weeks.

So, what did I learn, returning to India as a Western parliamentarian? I saw that India’s democracy and the instincts of the people in backing a centre-left grouping have been a great strength. Life continues to be extremely hard for many millions and frustrating for millions more who choose to study and work abroad. Yet improvements in the way India’s wealth is distributed are being made and a newly self-confident middle class has emerged. Ambitious plans, particularly for education and infrastructure, are emerging.

Manmohan Singh, controversially appointed Prime Minister by Sonia Gandhi, the President of Congress, is perhaps not the type of leader preferred in the West these days. He is 74, modest, academic and readily acknowledges India’s weaknesses. He also has a track record of economic success and is focused on fighting India’s greatest enemy: poverty. Some interpret his quiet approach as weakness. But the facts of India’s new-found economic strength and regional power tell a different story.

Claude Moraes is a Labour MEP for London