South Asia Monitor: India's Leadership Stumbles: The Economic Dimension — Budget 2002–2003 - April 1, 2002

April 1, 2002

The months of February and March 2002 were hard ones for Prime Minister Vajpayee and his Bharatiya Janata Party (BJP), and ultimately for the country. The BJP did poorly in elections in several Indian states, including the largest. The country was rocked by communal violence and continuing controversy over the contentious and illegal plans to build a temple by the Vishwa Hindu Parishad (VHP), a Hindu religious and cultural organization normally considered part of the BJP power base. All levels of government were bitterly criticized for their handling of this issue. At the same time, the budget for the coming fiscal year, presented on February 28, seemed to provide little basis for the jump start the economy needs, and the government displayed little real commitment to its modest reform measures. This month, two separate issues of the South Asia Monitor will assess where these different events leave Prime Minister Vajpayee and India. This report covers the budget and the economic prospects; a second will address political developments.