Dec. 23 (Bloomberg) -- Supporters of India’s Congress party roared approval at an election rally last month as Rahul Gandhi draped a garland of flowers over a portrait of his great-grandfather, Jawaharlal Nehru, the independence hero who led the nation in its first two decades.
Gandhi, 41, rolled up his sleeves and told the crowd a leader who doesn’t “share the bread of a poor man and drink the contaminated water in his house and fall sick, that leader cannot understand the plight of the poor.” The appearance at Jhusi, a village in the late Nehru’s district, is part of Gandhi’s campaign to boost the Congress vote in an election to be held by May in Uttar Pradesh, India’s most populous state.
Regaining ground in a former Congress heartland -- now dominated by groups appealing to poorer social castes -- would help build the political credentials of the fifth-generation scion of a family that’s dominated Congress and governments in the world’s second-most populous country. The campaign offers the public a further look at a political figure whom Eurasia Group says may be India’s next prime minister, yet who has refused calls to join the cabinet and has kept long silences on policy issues that have paralyzed the government.
“Indians feel Gandhi is an unknown entity,” said Mohan Guruswamy, chairman of the Centre for Policy Alternatives in New Delhi and a former Finance Ministry adviser. “They are waiting to see whether he can live up to the enormous expectations on his shoulders. He needs to present new ideas on areas such as how to improve governance, end corruption, and provide strong economic growth with policies aimed at reducing inequality.”
Gandhi’s Nov. 14 performance in Uttar Pradesh state, which spans the plain of the Ganges River that is a breadbasket of India, will be important to the future of Congress heading into 2014 federal elections, said R.K. Mishra, a political science professor at the University of Lucknow in the state capital.
Sonia Gandhi, Rahul Gandhi’s 65-year-old mother and Congress president, had surgery in August, during which time she handed the party’s leadership to a council of four that included her son. Prime Minister Manmohan Singh is 79 and has held office since 2004, after pioneering India’s economic opening as finance minister in the 1990s.
“Congress now needs to look to the future after Mrs. Gandhi and Prime Minister Singh, and I think the party is dependent on the family such that it cannot do so without Rahul Gandhi,” Mishra said. “Other capable young leaders are present in several states but they will not emerge nationally while he is there.”
While junior Congress leaders have said in recent years that Gandhi should become prime minister, the party’s top leaders have started endorsing the idea. At least three members of Congress’s governing 20-member Working Committee, including Finance Minister Pranab Mukherjee, have told reporters that Gandhi will be a future Congress president and prime minister.
Gandhi, a one-time Harvard University student, has built his appeal on visits to communities of the 700 million Indians who survive on less than $2 a day. Less clear to investors is the degree of commitment to sustain the legacy of Singh, who has spent much of his career dismantling the state-dominated economy championed by Gandhi’s grandmother, Indira, in the 1970s.
Rahul Gandhi stayed silent for three weeks as coalition allies and opposition leaders alike pushed Singh to abandon legislation opening India to foreign department-store chains such as Wal-Mart Stores Inc. and Tesco Plc. Singh suspended the plan, then said in a Dec. 14 interview he will revive it after March. Gandhi backed him in a speech two days later.
“Like lots of investors, my main concern is we know so little about him,” said A.S. Thiyaga Rajan, a senior managing director at Aquarius Investment Advisors Pte. in Singapore, which manages about $350 million in Indian assets. “There has been complete silence on his economic thinking and we don’t know where he wants to take the country. So far he has given us no insight into his vision.”
Gandhi’s office did not respond to a call, an e-mail and a text message seeking comment on statements by analysts and investors that his policies were unclear.
Gandhi has focused his policy comments on pushing Congress to guarantee jobs and secure cheaper food for India’s rural poor and lower-caste peoples, known as dalits.
“It’s all right symbolically to dine with a dalit family occasionally,” said B.G. Verghese, an analyst with the Centre for Policy Research in New Delhi. Still, “that is not presenting a vision” for the country.
Singh this year faced protests on city streets and in parliament over corruption scandals linked to the sale of cell-phone licenses and to last year’s staging of the Commonwealth Games. The demonstrations, led by independent activist Anna Hazare, who held a 13-day hunger strike, swelled in August as Sonia Gandhi was overseas being treated for an illness the family and party won’t discuss.
Rahul Gandhi didn’t respond publicly to the protests for almost two weeks before telling parliament in an Aug. 26 speech that the government couldn’t be held hostage.
Singh, after initially criticizing the protest, told parliament the day before that he respected Hazare’s “idealism” and that Hazare had become “the embodiment of the disgust and concern about tackling corruption.”
The government’s overall handling of Hazare, which included arresting the activist for three days, helped depress its support to 20 percent by September from 30 percent in May, according to an opinion poll among 9,000 people across 28 cities by research company Nielsen Holdings NV and India’s Star News television channel. The opposition Bharatiya Janata party rose to 32 percent. No margin of error was given.
Nehru and his father were early leaders of the Indian National Congress. They campaigned alongside Mahatma Gandhi, who was not a relative, for independence from British rule. Nehru served as India’s first prime minister until his death in 1964. Power passed within 20 months to his only child, Indira Gandhi.
She alienated voters by suspending the constitution in 1975 to quash protests challenging her rule, and lost an election two years later. She regained office in a 1980 vote only to be assassinated in 1984.
Indira Gandhi’s son, Rajiv Gandhi, succeeded her for five years before losing an election amid a corruption scandal. When he, too, was assassinated in 1991, his Italian-born wife, Sonia, withdrew her family from politics.
Rahul Gandhi was a student at Harvard in Cambridge, Massachusetts, when his father was killed. He transferred to Rollins College in Winter Park, Florida, to complete his degree under an assumed name.
Gandhi later earned a master’s degree in development studies at the U.K.’s University of Cambridge and worked for companies in London and Mumbai.
Seven years after her husband’s death, with some leaders quitting Congress to form their own blocs, Sonia Gandhi accepted the party’s appeal to become its president.
A revived party won power at the head of a coalition in 2004, with Rahul entering politics by winning his father’s former parliament seat. Sonia Gandhi declined party leaders’ calls to take the premiership, choosing Singh for the role instead.
“The Gandhis have been as glamorous and fascinating for Indians as the Kennedys for Americans, but the Kennedys are no longer in power” while the Nehru-Gandhis have ruled their country for 45 of its 64 years of independence, said Rasheed Kidwai, Bhopal-based author of the 2003 book “Sonia: A Biography.”
Drinking the Water
Rahul Gandhi led a national election campaign in 2009 that secured the party’s best result in 20 years. He has since worked on building a base for himself and the party by expanding and democratizing its youth wing, turning aside public calls by Singh for him to join the cabinet.
Gandhi explained his visits to share water and food with India’s poor and powerless in a televised election rally this month. “When it makes me sick and my stomach gets upset, I will remember the well whose water our poor brothers are forced to drink,” he said.
One visit in May revived public discussion of Gandhi’s inexperience. After he met villagers in Uttar Pradesh who had clashed with authorities over land acquisitions for a highway, Gandhi went directly to Singh with allegations that police had killed 74 protesters. Villagers didn’t back up the story and forensic tests on a mound of ash where Gandhi said the victims had been buried showed no human remains.
“He can be rather erratic in his conduct,” said Verghese, who served as an aide to Indira Gandhi when she was premier.
Strengthening rural welfare programs and the land rights of local communities are initiatives Gandhi has backed, echoing the populist bent of a mother who has supported broadening food subsidies and rural employment guarantees. Gandhi would promote “redistribution and focus on the marginalized,” New York-based Eurasia Group said in a Nov. 16 report.
Singh, an economist, has worked on strengthening the private sector in an economy that for decades was dominated by the state. “It is the only path to reduce the chronic poverty millions still live under,” Singh said in the Dec. 14 interview. Gandhi as prime minister probably would have to adopt some of that approach, Mishra said.
“Gandhi’s arrival could be a very positive thing by providing glue to the party and the coalition,” said Sam Mahtani, a London-based director of emerging markets at F&C Asset Management Plc., which manages about 103 billion pounds ($161 billion) in assets. “This may be what is needed to allow the government to push through important reforms,” said Mahtani, who is currently overweight in investments in India.
India’s $1.7 trillion economy grew 6.9 percent in the three months through September, the weakest expansion since the second quarter of 2009. Business leaders, including Reliance Industries Ltd. Chairman Mukesh Ambani, the country’s richest man, have urged Singh to work faster on legislation to aid growth.
At the same time, Indian stocks are lagging behind the developing world average. The BSE India Sensitive Index, or Sensex, has fallen 23 percent this year, compared with a 20 percent decline in the MSCI Emerging Markets Index, on investor concern a weak rupee, rising borrowing costs and Europe’s crisis will hurt profits.
Gandhi’s grip on Congress will depend on how effectively he shows regional leaders that his family name and political skills will win them elections, said D.H. Pai Panandiker, president of RPG Foundation, the nonprofit social welfare arm of the Mumbai-based RPG Group of companies.
The 200 million people of Uttar Pradesh would make it the world’s fifth most populous country, ahead of Brazil. In his Nov. 14 rally in the state, Gandhi attacked its chief minister, Mayawati, who built her Bahujan Samaj Party by pulling millions of lower-caste voters away from Congress.
“While there has been no progress for the poor in the past 20 years, corruption and the power of thugs have increased,” he said, his hands jabbing the air.
At the village of Chilh, 70 kilometers (40 miles) down the Ganges River, cloth merchant Amrit Lal, 82, said the Gandhi family “has done a lot for India” and received his vote for 30 years.
Sitting amid bolts of fabric in his shop, Lal praised Gandhi for visiting his community last month after villagers publicly protested what they say are abuses by local police.
“We are willing to see Gandhi as prime minister,” Lal said as neighbors pressed into his shop to listen. Still, his future in high office will depend on his performance, notably on prices and graft, Lal said.
“If he can do something, let him try,” he said. “If he can’t, we have the habit of throwing these governments out.”
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