5-25-09, 9:40 am

Original source: Vietnam News Agency

The Congress Party coalition’s stunning win in India’s general election has enormous implications for South Asia.

Just hours after Manmohan Singh resigned as Prime Minister, his Congress Party parliamentary colleagues immediately re-elected him for a second term, clearing the way for the swearing in of his new government this week.

The technocrat and economist is only the second Indian prime minister to have won re-election after serving a full five-year term.

The first was Jawaharhalal Nehru.

The Congress Party has governed for almost 50 years of modern India’s 61 years of independence giving it the undoubted reputation and capacity to lead the country through the global economic contraction.

And India’s new foreign policy confidence and assertiveness is built on an economy that has more than tripled the country’s Gross Domestic Product since 1998.

It is forecast to grow at an impressive 6-7 per cent this year, despite the global crisis.

Development among the 70 per cent of the population who live in rural India is among the reasons for the success.

Agriculture has grown by a record average of 4.5 per cent and the National Rural Employment Guarantee Act that provides rural adults 100 days minimum-wage pay for public works each year helped secure votes.

India would surely resume high economic growth and great strides in national unity and social development, India’s Ambassador in Ha Noi, Lal T.Muana, told theViet Nam News.

'The government does not need any outside support and it will be able to carry out strong policies for economic and political reforms,' he said.

'The Indian voters clearly showed their support that leaves them free to pursue a strong reform agenda.'

The prestige of the Gandhi family also helped.

When the Congress Party chief, Sonia Gandhi, proposed Manmohan Singh as prime minister his nomination was approved without a vote amid clapping and the thumping of desks.

The Italian-born widow and matriarch of India’s most powerful political dynasty, rejected the prime minister’s job five years ago, paving the way for Singh to take power.

Sonia Gandhi, her son Rahul Gandhi and his sister Pryanka Gandhi campaigned vigorously for the Congress Party and its ally, the United Progressive Alliance. The centre-left Congress Party won a massive vote of confidence from the stock market with a record surge in share prices adding sheen to its resounding victory.

'We now hope for an immediate further cut in short-term interest rates by at least 50 basis points,' said Confederation of Indian Industry director-general Chandrajit Banerjee.

Impetus for growth

'This would create an impetus for growth.'

Growth for the fiscal year ended in March is estimated to have slipped to about 6.5 per cent from 9 per cent in the previous year.

The forecast for this year is 6 per cent, the slowest in seven years.

'We are getting indications the government is working on specific reforms to support exports,' said Uttam Galva Steel director Ankit Miglani. Ambassador Muana says the major immediate challenges that the new government will stem from the global economic recession.

The government will pursue pro-people policies while pushing for strong growth and taking steps to alleviate poverty, he says.

India’s foreign policy and its tendency to productive relationships will be especially strengthened with the election result.

India now has a better chance to mend ties with Pakistan that deteriorated with the Mumbai attacks in November.

The re-elected prime minister could launch an opening to Pakistan now that he does not have to worry about a weakened Hindu nationalist opposition at his flanks.

The opening could include dropping a travel advisory and reviving people-to people contacts.

But the prime minister is likely stop short of relaunching the peace talks suspended since the raids.

The travel advisory, announced in December, is largely symbolic because few Indians travel to Pakistan but it still affected flights and discouraged trade.

Neighbouring countries will also need India’s support and encouragement to combat terrorism and alleviating the effects of global climate change.

The diplomat says government will pursue policy of friendship with all neighbours including Pakistan.

Exchange visits between senior Viet Nam and Indian government representatives will confirm the new government’s push for stronger India-Viet Nam relations, says the ambassador.

The exchange will begin with invitations for the President and Vice President of Viet Nam, the Defence Minister and the National Assembly Chairman to visit India, he says.

India’s new Foreign Minister will visit Ha Noi to co-chair 14th session of India-Viet Nam Joint Commission and Prime Minister Manmohan Singh will likely lead an Indian delegation to East Asia Summit when Viet Nam hosts that important, high profile gathering.

The new government will also formally record India’s recognition of Viet Nam as a market economy, and negotiate India-Viet Nam free trade agreement in addition to signing an India-ASEAN free trade agreement.

The ambassador forecasts that India-Viet Nam bilateral trade and investment will also grow substantially.