After stunning debut, AAP scrambles to dispel doubts

GHAZIABAD Fri Jan 31, 2014 2:37am IST

Delhi's Chief Minister Arvind Kejriwal, chief of the Aam Aadmi Party (AAP), speaks during an interview with Reuters at his residence on the outskirts of New Delhi January 27, 2014. REUTERS/Adnan Abidi/Files

Delhi's Chief Minister Arvind Kejriwal, chief of the Aam Aadmi Party (AAP), speaks during an interview with Reuters at his residence on the outskirts of New Delhi January 27, 2014.

Credit: Reuters/Adnan Abidi/Files

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GHAZIABAD (Reuters) - Anti-corruption crusader Arvind Kejriwal has shaken up India's political landscape with promises to change a rotten system: Now he is scrambling to dispel fears that his populism and rabble rousing could be a liability for Asia's third-largest economy.

Barely a year after founding the Aam Aadmi Party (AAP), the former tax collector made a stunning debut in Delhi legislative elections last month, crushing the ruling Congress party and preventing the Bharatiya Janata Party (BJP) from taking control of the city.

As India heads to a general election due by May, Kejriwal - now chief minister of the country's capital - is preparing to wrongfoot the mainstream parties on a much larger scale.

If he succeeds, the implications could be profound. He could derail the ambition of BJP figurehead Narendra Modi to become prime minister, and possibly even hold the key to power in post-election manoeuvring to form a coalition government.

The trouble for Kejriwal is that many doubt he can make the leap from populism and street politics to policies that would lift India's economic growth from its slowest clip in a decade.

In his first weeks in office, he slashed power and water prices, banned foreign supermarkets from setting up in the capital and led an unruly protest against the police.

"We will need time to see what policies they establish in a national manifesto," said Natasha Ebtehadj, a fund manager at Threadneedle Investments in London. "However, initial moves do seem to suggest that they will not be prioritising economic reform nor reducing the reliance on unproductive subsidies."

In an interview, Kejriwal spelled out his economic priorities for the first time and said AAP would spur competition, simplify tax, reduce the role of government and make space for entrepreneurship to flourish.

"We have somehow put shackles on private enterprise, this needs to be removed. People need to be allowed to do business," he said at his cluttered apartment in Ghaziabad, a shabby satellite town of New Delhi far from the elegant streets preferred by most politicians in the heart of the capital.

CORPORATE LEADERS AND NOTED ECONOMISTS

The AAP's appeal is broad. Leaders from Apple Inc (AAPL.O), Barclay's Capital and software services giant Infosys Ltd (INFY.NS) have all joined what they see as a revolution against the bribes and graft that are holding India back.

To convince investors it is a serious player, the AAP has set up a seven-member committee to forge a policy manifesto, including former RBS (RBS.L) India CEO Meera Sanyal, former Idea Cellular (IDEA.NS) Managing Director Sanjeev Aga and noted economists.

That platform is likely to seek foreign direct investment (FDI) in infrastructure and financial services, favour a nationwide goods and services tax to cut business costs and bring in a uniform taxation regime, two sources with direct knowledge of the policy discussions said.

"We are not against FDI per se, we are not saying that FDI should not be in any sector, this is a decision that has to be taken on a sector by sector basis," Kejriwal said.

The party would not oppose partial privatisations, and it may suggest a roadmap to plug leakages in the delivery of subsidised grain, fuel and fertiliser, the sources said.

Kejriwal is opposed, however, to the entrance of foreign supermarket chains such as Wal-Mart (WMT.N) into India, arguing it would be damaging for local jobs and farmers. The Indian government has allowed entry of foreign retailers into the country but has left it to state governments to implement the policy.

Kejriwal returned time and again in the interview to his mantra, fighting the rampant graft that sparked unprecedented protests and hunger strikes in 2011 and led to the creation of his party.

"Good economics is the outcome of honest politics," he said.

India was ranked 94th in a list of 177 countries on Transparency International's 2013 global corruption index, lower than China, South Africa and Brazil. The Congress party-led government has been rocked by spectacular corruption scandals, and foreign investors regularly complain about the need for "speed money" to get business done in the country.

One of Kejriwal's first actions in government was to encourage citizens to use cellphones to record government workers who demand bribes, then call a hotline to report them. Businesses in Delhi say the effect has been dramatic, with far fewer demands for gifts and money.

BEDDING DOWN BY THE BARRICADES

Kejriwal's AAP clearly has strong support in Delhi, but it is unclear how far its popularity extends.

Some supporters may have had second thoughts in recent days after the spectacle of Kejriwal leading a street protest against the city police, who are controlled by the federal government, and bedding down for the night beside the barricades.

In the national election, AAP would field candidates against 73 members of parliament facing serious criminal charges and also stand against several cabinet ministers who had "engaged in corruption", Kejriwal said.

Some leaders have said the party is preparing to contest up to 400 of the 543 parliamentary seats at stake, though opinion polls conducted since the Delhi election suggest that - despite such ambitions - it is unlikely to win more than a dozen.

Nevertheless, support for the AAP across the country could yet grow, putting the party in a key and influential position if, as polls predict, there is a hung parliament and a coalition government has to be formed.

Kejriwal said he is opposed to both the Congress and the BJP, but has accepted support from Congress in forming the government in Delhi.

The AAP's meteoric rise has already forced the main parties to adopt some of its anti-elite, anti-corruption language. Its crowd-pleasing Delhi policies have had a knock-on effect, with two states following Kejriwal's cut in electricity prices. On Thursday, the Indian government increased subisides for domestic cooking gas, a move apparently aimed at AAP's core support base of urban voters.

G.R. Gopinath, an entrepreneur who founded India's first low-cost airline and recently joined the AAP, wrote in a blog that the party's rowdy edge could however erode support among the educated middle class whose funds and motivation helped it win in Delhi.

"AAP is in danger of being branded like other political parties of resorting to cheap and populist measures and opposing for the sake of opposing," he said.

(Additional reporting by Sumeet Chatterjee, Himank Sharma and Tony Munroe in MUMBAI, Sruthi Gottipathi in NEW DELHI; Editing by John Chalmers and Raju Gopalakrishnan)

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Comments (4)
Mahishmati wrote:
Arvind Kejriwal must fight the Loksabha elections, of course against both – Rahul and Modi; because he is the greatest symbol of hope.

Jan 30, 2014 6:53am IST  --  Report as abuse
Nramac wrote:
For every 1 rupee spent by the government only about 15 paisa reaches the people, the rest is swallowed by the corrupt politicians and bueaurocrats. The thousands of crores that is being looted from the government by Congress and BJP politicians would have generated employment to so many people, made India a developed country, strengthened the defence of the country by making honest and timely purchase instead of Coffin for Kargil scam that we saw from the BJP government that looted our martyr dead soldiers honor, the Augusta Westland helicopter scam, the Bofors scam, Tatra truck for army scam during Congress regime plus other major scams such as coal scam which continued under both BJP and Congress governments, the fodder scam under BJP and Lalu Prasad, spectrum scam under Congress and so many other scams. Honest, committed MPs with integrity and farsight are the need of the hour who will strengthen our country such that our education system will improve because now government funding for education is pathetic and the fact that most of these funds are looted away as can be seen from government schools which are lagging so far behind in standards of education and both BJP and Congress governments are not interested in raising the standards of our governments schools where most of the common people send their children because they are not interested in common children becoming empowered and knowledgeable because then they will know they are being screwed by the system ruled by the BJP and Congress. Our agriculture will improve by enabling farmers to get the best system for agricultural practice, strengthen internal security because if people are happy, employed and leading productive lives there will be no threat to our internal security, loosen government control that is restricting people from becoming entrepreneurs because of bureacratic red tape and corruption. To start a business in India is a serious issue because you have to pay bribes left, right and center which only the super rich can afford to do and not the ordinary businessman. So first we need to eliminate corruption, then other problems will over time get solved completely when honest people with good intentions are heading the government. So AAP is doing the best thing possible by giving tickets to honest and committed people from all walks of life who will contribute to uplifting India into a developed and prosperous country. So we need to make the right beginning and voting for AAP majority in parliament is the way to go forward. Jai Hind.

Jan 31, 2014 11:54am IST  --  Report as abuse
Vishnugupta wrote:
AAP says “We have somehow put shackles on private enterprise, this needs to be removed. People need to be allowed to do business,” If this is true, why are they fighting with BJP? NaMo is saying the same thing. Corruption,Secularism are very flimsy excuses for not joining BJP.As far as secularism is concerned, they do not mind towing Muslim extremist line like Prashant Bhushan or their opinion on Batla House encounter. The real face of AAP is, that they have extreme leftist like Medha Patakar, Binyak Sen, Yogendra Yadav as their ideologue, who thrived on patronage from Congress and intellectual mooring from Communists. They have hatred towards BJP. Today as their umbrella of Congress is blown away by NaMo typhoon, they are compelled to come in open and fight with BJP. Their main opponent is BJP.

Jan 31, 2014 12:48pm IST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

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