Can telecom scam bring down India's government?

NEW DELHI, India — As investigations continue into the most damaging corruption scandal to strike the Congress party in decades, Sonia Gandhi, the party's leader, had a go at flipping the script.

At the party plenary marking the Congress' 125th year on Sunday, Sonia stood up for beleaguered Prime Minister Manmohan Singh. She unveiled a five-point plan to root out corruption, and she blasted the opposition Bharatiya Janata Party (BJP) for its "despicable" attacks on Singh — they said he was asleep at the switch while his telecom minister allegedly defrauded the country of billions of dollars. But Singh, she said, is an "embodiment of sobriety, dignity and integrity."

It wasn't Sonia's remarks, however — or Singh's promise to appear before an investigating committee, saying "I have nothing to hide from the public at all" —that gave the best hint as to the Congress strategy for regaining control of the news cycle. That came from the party's general secretary, Digvijay Singh, in the role of hatchet man as he defended the 40-year-old prime minister-in-waiting, Rahul Gandhi.

Embracing Rahul's trepidations about "Hindu terror" — WikiLeaks' diplomatic cables revealed that Rahul told the U.S. ambassador that he feared Hindu terrorist groups more than Islamic ones — the general secretary attacked the BJP's Hindu nationalist parent, the Rashtriya Swayamsevak Sangh (RSS). And by amplifying Rahul's rhetoric — he apparently sought to shift the focus from corruption to communalism, the word India uses to discuss its religious divides.

"The RSS in the garb of its nationalist ideology is targeting Muslims the same way Nazis targeted Jews in the 1930s," Digvijay told plenary attendees.

In a less corrupt country, the context for the general secretary's comments might itself be enough to reveal it as a transparent attempt to distract attention from the problems besetting his party.

Thanks to a series of high-profile corruption scandals, the Congress party faces its biggest challenge in years. Every day, new revelations hit the headlines from leaked transcripts of tapped telephone conversations between an influential lobbyist and top politicians, billionaire tycoons and (formerly) respected journalists.

And even though the party has already ousted the chief accused — who is a coalition ally, rather than a Congress party member — the perception remains that the government is dragging its feet on a full-scale inquiry, as its resistance to an investigation by a joint parliamentary committee was at the root of opposition disruptions that prevented legislators even from meeting for all but seven hours of the month-long winter session of parliament.

"After the Bofors [defense kickbacks] scam in the '80s and various scandals of the Narasimha Rao government, this is the first time the opposition has something that it looks like will stick," said Delhi University professor Mahesh Rangarajan, a political analyst. "The opposition is united with an issue for the first time since the beginning of the UPA [the Congress-led coalition government.]"

Despite his impeccable personal reputation, the prime minister's two terms at the helm of the UPA have paid rich dividends in allegations of corrupt dealings — or what Indian reporters like to call scams. In the so-called rice scam, for instance, officials at state-owned companies involved in grain exports to Africa allegedly bent rules to help private players cheat the government out of $500 million.

In the Commonwealth Games scam, organizing officials allegedly bilked the state for $100 million in inflated rentals for furniture and other fixtures. And in the mother of them all, the 2G spectrum scam, former Telecommunications Minister A. Raja of Tamil Nadu's Dravida Munnettra Kazhagam party allegedly cost the country as much as $40 billion by allowing top industrialists to buy telecom licenses for what opposition politicians term "throwaway prices."

"People are struck by the magnitude of the scandal," said political analyst Praful Bidwai. "This is pretty outrageous."

But in scam central, questions remain whether corruption allegations alone — or even a smoking gun — is enough to engineer a change in government. One need look no further than the last election results to see that Indians — who by and large believe that all their politicians are equally corrupt — suffer from scam fatigue.

Despite new efforts to publicize the criminal records and outsized assets of politicians, the number of members of parliament who face charges of crimes including robbery, extortion and murder increased from 128 in the 2004 elections to 162 in 2009, while the average lawmaker's assets grew to $1 million apiece from around $400,000.

True to form, while this season of scams brought the legislature grinding to a halt, there was no sign that the government might fall. Moreover, with the next national election not scheduled until 2014, unless it loses a confidence vote the Congress will have more than enough time for damage control. And that's where the renewed focus on fundamentalism gets interesting — if we look back at the most famous corruption scandal in Indian history.

Though it certainly contributed to his defeat, the Bofors defense kickbacks scandal, revealed in 1987, was only the final straw for then-Prime Minister Rajiv Gandhi. Like the present, the late 1980s were halcyon days for the "India story." Rajiv, who had not yet turned 40, was hailed as India's John F. Kennedy, and his efforts to open up the economy ushered in industrial growth of 5.5 percent and manufacturing growth of 8.9 percent a year.

But during Rajiv's term, Sikh terrorism had spread, militancy had begun in Kashmir, reporters had begun to call his intercession in Sri Lanka's civil war "India's Vietnam," and two catastrophic droughts had struck the poor even as his economic policies drew criticism for pandering to the rich, according to Ramachandra Guha, the author of India After Gandhi.

Moreover, instead of ousting an implicated cabinet minister — as Manmohan Singh has done — Rajiv sacked the man who had brought the irregularities to light.

Even then, Rajiv might have been able to weather the storm if not for the rise of Hindu fundamentalism. The BJP capitalized on a new enthusiasm for the god Ram and the claim that Rajiv had adopted a policy of Muslim appeasement to increase their tally of parliamentary seats from just four in 1984 to 88 in 1989 — tipping the balance in favor of the National Front coalition.

And three years later, after Rajiv's assassination, the Ram temple movement and the destruction of the Babri Mosque at Ayodhya — believed by Hindus to be Ram's birthplace — began the rise of the BJP as a legitimate national rival to the once unassailable Congress.

With the Congress itself now endeavoring to turn the national dialogue back to multicultural secularism versus Hindu nationalism, the Bofors comparison shows how much India has changed — and how much it remains the same.

Today, in stark contrast to 1992 or 2002, the Congress believes that the BJP's failures to whip up anti-Muslim sentiment after the 2008 terrorist attacks on Mumbai indicates that the opposition party's fundamentalist ideology is a weakness, rather than a strength. But at the same time, today's daily allegations about the back room deals behind seemingly every Indian fortune — and the public outrage that trusted journalists, too, might be corrupt — suggest that in the broader arenas of business and politics the wide-eyed enthusiasm for the "new India" was mostly plain naivete.

During the Bofors era, when a former gas station attendant built Reliance Industries into India's most powerful company by dint of his political connections, every large business house maintained lobbyists in New Delhi to lever an advantage from the so-called License-Permit Raj, according to Guha.

But cutting the red tape associated with the planned economy wasn't enough to destroy — or even dent — the culture of corruption, the ongoing 2G telecom license debacle shows. The corruption-free information technology boom of the 1990s was an aberration, because there were no regulations governing IT and thus no bribes to pay. But now that India's economic growth has shifted to mining, telecom, property development and public works, the continued dominance of crony capitalism is becoming clear.

The only thing that's changed in this era — often called India's Gilded Age, in allusion to the freewheeling decades that created the fortunes of America's robber barons — is the scale.

"Business has never been as powerful, as interfering, and as assertive and self-confident as it is now," Bidwai said.