I was becoming impatient. I had sent both Sonia Gandhi and Manmohan Singh messages by all sorts of different routes but, once the astonishing election results were known in mid-May, Indian politics was a 20 hours a day affair - the principals barely had time to sleep, much less grant an interview to a foreign reporter. For the first few days the question was, would the communists, who had won 7 per cent of the vote, surpassing their own best expectations, join the Congress party in forming a government of the left. Despite arguments in favour by communist heavyweights such as the new speaker of the Lok Sabha (lower house), Somnath Chatterjee, the communists decided against. They would support a Congress government, but from the outside.
Following the announcement that they were staying out - and therefore perhaps making mischief - the Indian stock market had its worst day in its 129-year history. Congress realised that to stop the rot it had to take over the reins of government. To calm the markets, Manmohan Singh, author of India's post-1991 economic revolution, was wheeled out as the likely new finance minister. Five days after the election results came in, APJ Abdul Kalam, the president of India, received Sonia Gandhi to discuss forming a new government and the Congress leadership made it clear, as did the communists, that they expected her to become prime minister. Then the real storm broke. The Bharatiya Janata party (BJP), the party of the outgoing Hindu nationalist government, announced that it would boycott her swearing-in. As an Italian, they said, Gandhi was unacceptable.
Sonia Gandhi stunned her party and the world when she acquiesced in this BJP veto. She had many reasons. It was clear that her political opponents would continue to use her Italian origins to undermine her government. In such an atmosphere another family assassination could not be discounted. Besides, her ambition if any was to clear the way for the future ascendancy of one of her two children, and her incredible victory had already secured that. Late into another night of debate, it was announced that Manmohan Singh would be prime minister, while Sonia Gandhi remained president of Congress.
I had just flown back from Calcutta - the capital of Indian communist rule - to New Delhi. The next morning the city was quiet for the first time in days. My Indian journalist friends assured me that my messages to my old friend Manmohan were getting through and I would be called in soon. At breakfast I realised that I did not share their confidence, so I cancelled my appointments and took a taxi to Singh's residence in a quiet leafy street where I had spent the morning with him just over a year before. The house was blocked off by a street-long barrier. I circumnavigated it on foot, walked past an Indian soldier who saluted me, and on through an unmanned metal detector and into a makeshift hut inhabited by a man with a phone. I gave my name and five minutes later I was ushered into the garden. Gursharan, the prime minister's wife, was standing there and she whisked me straight into Manmohan's study.
The house, although large and surrounded by a big garden, is modest inside. Manmohan's study is furnished only with a couple of old chairs, a wicker settee, a desk and bookshelves. Manmohan was sitting there alone, hands resting together. He seemed to be lost in contemplation. "I am so tired," were his first words. "Only two and a half hours' sleep last night." I could see he was overwhelmed by a situation he could scarcely have foreseen.
During the 14 years I have known him, Manmohan has been a man whose heart beat on the left. Although widely known for his term as governor of the central bank and then the finance minister who introduced deregulated capitalism and globalisation to India with stunning results, I remember him first as the secretary-general of the South commission, presided over by Julius Nyerere, the very socialist former president of Tanzania. They wrote a report in 1990, mainly the work of Manmohan, that tore into western capitalism and its exploitative relationship with the third world. I wrote a column in the International Herald Tribune saying his criticism seemed overdone, even for an (adopted) Swedish social democrat like me, and the Singhs responded by inviting me out for dinner in Geneva, where they then lived.
As we talked now, I became even more aware than before that this brilliant economist had beaten Clinton and Blair to the third way back in 1991, and that he is determined to use capitalism's energy to improve the prospects of India's poor. "We are centre left," he said. "But we are stealing the clothes of the centre right. Our economic reforms are half incomplete. We have to take them to their logical end. The BJP government was not able to get its act together. It was incoherent, faction-ridden and unable to be effective with its privatisation policies. When we left office in 1996 the growth rate was 7.5 per cent. Under the BJP it slowed to 5.5 per cent." I asked him if he could raise it to 8 per cent, high enough to give China a run for its money. "Eight per cent would require a Herculean effort," he replied. "We have an investment rate of 25 per cent of GDP and a savings rate of 23 per cent. We need to increase our savings rate and have an investment rate of 28-30 per cent, combined with increased efficiency. This is too ambitious for now. But over five years we can do it. If foreign inflows can rise from the present 0.7 per cent to 3 per cent of GDP, it can be done. China has 3.5 per cent. We have to change the mentality of foreign investors. And this we can do if we have stable politics. For now, if we can grow at 6.5 per cent in a sustained manner we can make an impact on poverty and unemployment."
What is the most important single issue, I asked. "Mass poverty," he replied instantly. "Seventy per cent of our population live in the rural areas and we have to give them good water, primary healthcare, elementary education and good roads." "What about land reform?" I said, knowing that this was the sacred cow of the communists. "We can't have it. It would cause a revolution. Anyway, we are not like the Latin American countries. We don't have the scope for it here. What is important is for sharecroppers to get rights established so they can invest in their land with security. We need to be like the communist government in West Bengal. But we must have fast industrialisation too so that we can draw people off the land."
Although India's spending on its vast conventional forces, nuclear bombs and missiles amount to a fairly small percentage of GDP, India's perpetual confrontation with Pakistan over Kashmir unnerves investors. Indian public opinion seems rather insouciant about nuclear war - 80 per cent of Indians were not born at the time of the Cuban missile crisis, much less Hiroshima. Manmohan does not share this attitude. For him, peace in Kashmir is urgent business. When I had last seen him in 2002, he and Sonia Gandhi had been up all night finalising an agreement whereby Congress, after Kashmir's first free election in decades, would enter the coalition government together with a local moderate Muslim party, an initiative backed by the then prime minister, Atal Behari Vajpayee of the BJP. The move has worked to diminish violence, improve the local human rights situation and prove to Kashmiris that New Delhi is serious about them running their own show.
"The talk of war," Manmohan continued, "is stopping us realising our economic potential. We have an obligation to ourselves to solve this problem. Short of secession, short of redrawing the boundaries, the Indian establishment can live with anything. The constitution of India has a built-in flexibility for legitimate aspirations. In Tamil Nadu in the 1960s we had a problem of would-be secession. Secessionists in the end were elected to government and that ended the situation." This seems to offer Pakistan quite a lot of leeway, although its Kashmiri, al Qaeda-trained ideologues and fighters might not appreciate it.
Then he added an interesting afterthought: "People on both sides of the border should be able to move more freely. We need soft borders - then borders are not so important." "But surely," I said, "whatever you do, the Kashmiris have not forgotten that Nehru promised them a plebiscite?" "A plebiscite," he replied, "would take place on a religious basis. It would unsettle everything. No government of India could survive that. Autonomy we are prepared to consider. All these things are negotiable. But an independent Kashmir would become a hotbed of fundamentalism."
Manmohan was visibly overcome by weariness. His private secretary appeared and ushered me, a cup of tea in hand, into the old kitchen to chat with Manmohan's wife (I couldn't help thinking, as I said goodbye, that this homely scene with a journalist and a premier could never take place in China). I repeated to Gursharan what Manmohan had said to me about Sonia Gandhi: that she "is a person who likes to be told things straight - not in the Indian roundabout way. It helps having a European mind." "Yes, that's right," she replied, "It's a good balance they have." "So they are going to run this government together?" I ventured. "They will go on working closely. They always have."
I returned to West Bengal. I wanted to get out into the villages and see what Indian communism was all about - to understand what Manmohan meant when he talked of emulating what the communists had done, in India's most densely populated state.
Two hours' drive out of Calcutta, I am in the village of Daura, in Howrah district, accompanied by Tirthankar Mitra, a journalist from the Statesman newspaper. The temperature is 47o in the shade and we are out in the broiling sun. I enviously watch the women being towed along by their furiously pedalling husbands as they lounge, gorgeously sari-clad, parasols aloft, on carts attached to bicycles. I have never seen so many bicycles, even in China. I envy too the children splashing in the village ponds. I can't help thinking of Bengal's drought of 1943 and the subsequent terrible famine, one of the worst ever recorded anywhere in the world, in which 3m people died. "Whatever happened to famines?" I ask my guides. "The last one was 17 years ago. Now we have dams and wells everywhere and where we grew one crop a year we now grow three." Bengal has the highest rice production of any state in India.
Everywhere we go, on almost every house and shop, hangs the red flag emblazoned with the hammer and sickle in bright yellow. Next to it I often see a row of Hindu gods or a shrine. I am taken to meet Balaram Khanra, a sharecropper, who grows mainly rice. Back in 1967 he was jailed during the early communist struggle with the feudal landlords. Today he proudly tells me that he is in "peaceful possession" of the land. Before, sharecropping meant giving 75 per cent of his produce to the landlord; now it is reduced to 25 per cent. He shows me around his brick house - a septic tank was installed in 1986, electricity arrived in 1992 and in 1998 he added a black and white television and an electric fan.
In all the villages, infant mortality, the birth rate and illiteracy are falling rapidly (all indices are much better than the Indian average), and yields are increasing. For 20 years now, agricultural production has been growing state-wide at well over 4 per cent a year. The proportion of West Bengal's population below the poverty line has dropped from 50 per cent in the 1970s to around a third today.
This peasant revolution began in 1967 when the communists first came to power in coalition with other left-wing and centrist parties. There was resistance from the landlords and, independent of the party, a group of students and peasants in Naxalbari began a guerrilla movement, modelled on Mao and, indeed, financially supported from Beijing. The so-called Naxalites were ruthless, burning title deeds and beheading landowners. The communist authorities eventually put down the uprising, but from then on their task was easier - the landlords were now cowed enough to co-operate with the communist government's land reform plans. As Buddhadeb Bhattacharjee, the chief minister of West Bengal, explained to me in his office in the Writers' Building in Calcutta, "We did three things: we took some land away from the landlords, we gave rights to sharecroppers and for farm workers we imposed a minimum wage of 58 rupees (about 70p) a day."
Land reform, he argued, "should not be a question of capitalism or communism. Look at South Korea, Taiwan and Japan - in all of them, land reform was the key that unlocked rapid economic expansion and industrialisation." The president of the West Bengal chamber of commerce, Biswadeep Gupta, a big industrialist, agrees with him. "There is now an enormous economic savings surplus in our rural areas. In rural India this state has the highest. This is going to drive growth for investors. Now we are selling things that once were considered unnecessary for living, everything from soap to motorbikes."
Will Manmohan Singh push for such land reform elsewhere in India?" I asked Somnath Chatterjee, the communist Lok Sabha speaker. "We are giving Singh unconditional support. And we know that he is putting a lot of emphasis on the rural poor. About 700 farmers have committed suicide this year because of indebtedness. There is no alternative to land reform. Of course, it will depend on the political make-up of each state. We don't expect to see it in BJP states. But Congress must make an adjustment to coalition policies."
The communists might have achieved more of their objectives if they had entered the government. Promising to vote with it gives them some influence but not as much as if they had taken the risk of losing some of their identity, and thus votes, in the next state elections. But the bottom line is that if the communists don't give Congress the support it needs to rule effectively, mid-term elections brought on by the fall of the government would let the BJP come roaring back. Indeed, in six months' time if the communists prove difficult, Congress can always threaten to play its trump card - to call a new election to ask for a stronger mandate. Given Sonia and Manmohan's popularity, they would probably win it.
Judging from what Manmohan told me, he will take steps towards the communists: giving sharecroppers greater security and possibly even the minimum wage for farm labourers. But he won't move to strip titles from big landlords, as they are one of Congress's important constituents. This is similar to the policy advocated by Professor Roy Prosterman of the Rural Development Institute at the University of Seattle, one of the world's greatest authorities on land reform. West Bengal's reform, he tells me, has been a stunning success, but he recognises the political and financial difficulties of spreading similar legislation to the rest of India. For him the worst problem is the landless, who make up about 11 per cent of rural families. He believes it is possible to give these people "homestead plots," a fraction of a hectare sufficient for a garden, trees and a few animals. "This would require less than one third of 1 per cent of India's arable land, transforming our assumptions about the affordability of land reform."
How far will the communists bend in supporting Congress? Over the last ten years, they have changed from a party of absolutist dogma to one of surprising pragmatism. "We are globalisers now," says Bhattacharjee. "We have been to Shanghai and seen that it works." He is very critical of the old communist policy of supporting militant unionism, which regularly closed down whole businesses, often violently. "Now we say labour productivity is not just the responsibility of management. The unions must co-operate too." He is determined to woo the multinationals and especially the information technology sector where he is convinced Calcutta can overtake Hyderabad, given its large numbers of well educated people (bequeathed by the educational institutions of the Raj) and the lowest crime rate of any major city in India. West Bengal's fiscal deficit is large and interest payments on debt the highest in India, but it now has one of the highest rates of growth of the Indian states. Moreover, relations between Muslim and Hindu are harmonious. The BJP does not do well here.
Still, Calcutta has a population of 6m, of whom 1.6m live in slums. If no longer as badly off as described by Dominique LaPierre in his bestselling book, The City of Joy, their conditions are still wretched. When I visited Calcutta 25 years ago, I thought I had entered the inferno. I will never forget watching one man whose job was to rescue used toilet paper and tear off the unsoiled bits for further use. The gutters were crammed with the homeless. Today, the number sleeping on the pavements is down to a few thousand. The streets are reasonably clean, yellow taxis have replaced rickshaws and the city exudes economic activity. The communist party swept the board in Calcutta, a city in which they usually struggle. Despite its popularity, it cannot resist the temptation to intimidate opponents. Bhattacharjee still hangs a portrait of Lenin in his office, explaining, "I believe in class. I don't think capitalism is the last chapter of civilisation."
So this is Congress's coalition partner. Like Ravindra Kumar, the editor of the liberal Statesman - the one local mouthpiece that is consistently critical of the communist fiefdom - I cannot help wonder if the communists will keep Congress in power for a full five-year term. He blames them for the big stock market crash and says that they should have "explained their position more articulately." After all, only a few days before the election Bhattacharjee had called Singh "the torch-bearer and lackey of the World Bank and IMF."
Singh will have to deal with the communists' ambiguities. He told a post-election press conference: "Life is never free from contradictions." He added: "Our friends on the left have a different perception of past economic policies, but they are also great patriots and that patriotism and burning desire to make this century the Indian century is something I see common to all Indians."
There is room for manoeuvre, as Kumar argues. "The fact that Congress has already watered down its privatisation policy to please the communists shows that Singh is flexible. But this is not imperative for economic reform. Reform is about opening up competition, cutting down controls and the Marxists these days won't object to that."
The big question is whether Singh can set India on the path to overtake China in a decade or two. India has a lot going for it that China does not. Apart from its thriving democracy and free press, it has world-class companies, especially in information technology, biotechnology and pharmaceuticals. It has the intellectual capital of its emigres returning from Silicon Valley. Its banking system has relatively few underperforming assets. Its capital markets operate with greater efficiency than China's. Above all, it has the rule of law. As one western banker said to me, "China progressed so fast because it had no law. But now India will overtake China because it has law."
India has changed profoundly in the last 30 years. The number of poor has been halved. The middle class is as big as the population of "old Europe," and is growing fast. India could be the power that dominates the second half of the century. I, for one, would rather India than China.
