A bulldozer lifts a fishing boat as part of operations to clear tsunami-affected areas, in Therukapattu village in Tamil Nadu on Jan. 3. (Photo: AFP)

If the havoc wrought by the killer tsunami waves hadn’t cast a pall of gloom over India, the country could have looked forward to a fine new year in terms of the economy, political outlook and foreign policy achievements.

But the first thought now will be on none of these subjects. Instead, all attention will be focused on the rehabilitation of the victims and coping with the devastating fallout of the tragedy, including the fear of epidemics.

The economic cost of the horrifying damage caused by the tsunami hasn’t yet been assessed. But at least one thing is certain. More than any other country that has borne the brunt of the devastation, the Indian economy has the resilience and the wherewithal to survive the calamity.

The reason is the sound economic foundations evident in the Sensex crossing 6,000 points, foreign exchange reserves growing to $130 billion, the surplus in the balance of payments reaching $8 billion, inflation remaining under control, industrial production clocking 10.1 percent, manufacturing growth 11.3 percent, the output of consumer durables growing by 15.5 percent and of non-consumer durables by 13.4 percent.

This is not to say that there is no distress, especially in the rural areas. But what is clearly evident is that some kind of dent is finally being made in the age-old problem of poverty. In fact, figures show that rural poverty has declined from a high of 39.1 percent in 1987-88 –– three years before the economic reforms began –– to 27.1 percent in 1999-2000, after nearly a decade of reforms. What is more, National Sample Survey data shows that the number of people who say that they do not get enough to eat has fallen from 15 percent in the early 1980s to a mere 2.1 percent in the rural areas in 2001-02 and 0.4 percent in the urban areas.

Given these figures and considering that the leading lights of the Indian government are reputed economists like Prime Minister Manmohan Singh and Finance Minister P. Chidambaram, it is possible to argue that the economy has finally got over the familiar abysmally low “Hindu rate of growth” of a mere 2 to 3 per cent.

It is perhaps because of the mood of buoyancy in the economy that a survey by the Outlook magazine has shown that a remarkably high percentage of Indians –– 47 percent –– say that they are “very happy.” If another 28 percent of the “somewhat happy” are added to the first category, then the total becomes an unbelievable 75 percent.

Not surprisingly, the “very unhappy” constitute a lowly 7 per cent. Whatever the truth or falsehood of these assessments, it is undeniable that India today is a different country from what it was, say, two decades ago.

If the economy is looking up, politics, too, has seemingly entered a new phase. The earlier subdued tension, mainly as a result of the apprehension that the minorities –– both Muslims and Christians –– felt, has subsided. A contributing factor is that the unrelenting focus the BJP-led government maintained on the Ayodhya dispute, which led to the tragedy of the Gujarat riots of 2002, is no longer there.

The BJP itself is in disarray. First, it has been unable to find a major issue with which to criticize the government and, secondly, because it is having to cope with the problem of indiscipline in its ranks, as the activities of the rebellious Uma Bharati demonstrate. The shifting of its attention from the Ayodhya issue has also disheartened its core group of supporters, including organizations like the Vishwa Hindu Parishad, whose leaders havey talked about setting up a new “pro-Hindu” party.

The BJP’s difficulties have enabled the government of Manmohan Singh to settle down.

The government has also succeeded in squashing the speculation about there being two centers of authority — one headed by Congress president Sonia Gandhi and the other by Manmohan Singh –– working at cross purposes. Whatever be the internal equations, both the leaders have so far given the impression of working in concert.

After declining to accept the post of prime minister, Sonia Gandhi has chosen to stay mainly in the background, although it is clear as daylight that she continues to wield enormous influence on the party and the government. But her clout is mainly a result of the high stature she has acquired because of her renunciation. It is also clear that she has left the nitty-gritty of governance to Manmohan Singh, providing only broad guidance and keeping the often troublesome allies of the government in good humor.

Heading the list of the trouble-makers are the Communists, who seem determined to block any notable advance on the path of economic reforms since it alienates their trade union friends. Second in the list is Railway Minister Lalu Prasad, whose “tainted” image has suffered yet another blow because of the reprimands from the Election Commission over a violation of the model code of conduct prior to the Bihar elections.

As a result, the relations between the Congress and Lalu prasad have entered an uncertain phase, with both waiting for the outcome of the Bihar elections next month before deciding on their next step.

On the foreign policy front, the Manmohan Singh government has carried on from where the Atal Bihari Vajpayee left off on ties with Pakistan and the U.S. However, the assertion by Singh that there will be no redrawing of boundaries in Kashmir means that Pakistan will have to come to terms with the status quo, which Islamabad has been trying to avoid so far since it means that the valley and Srinagar will remain out of its reach. If this Indian position puts a greater emphasis on the ground realities, it will be a step forward.

(The author is a political analyst)