As economic growth slows to below 6% and yet another corruption scandal gridlocks governance, are Indians losing faith in their politicians? A spate of recent articles suggests that’s certainly true of Prime Minister Manmohan Singh. Once seen as an incorruptible champion of economic liberalization, Singh has recently been termed The Underachiever (Time Magazine), and a “dithering, ineffectual bureaucrat” (Washington Post) presiding over a corrupt government that “has passed no substantial laws” (The Economist).
The Indian business community appears to agree. Data from the World Economic Forum’s annual Global Competitiveness Report reveals a precipitous decline in trust in politicians over the past six years.
Since 2006, India has fallen 38 places, from a middling 68th (of 117 countries surveyed) to a dismal 106th (out of 144 countries). In addition to policy paralysis and a series of corruption scandals, the Indian government flip-flopped on its decision to allow foreign investment in multi-brand retail and retroactively amended tax laws, increasing the uncertainty for foreign and domestic investors alike. Even the Russians now have greater faith in their political leaders.
The only silver lining for India is that its trust deficit remains smaller than fellow BRIC economy Brazil’s. But since Brazil’s GDP growth rate more than halved over the past two years–from 7.5% to under 3%–that may not be saying much.