Post stunning debut, AAP scrambles to dispel doubts

GHAZIABAD: Arvind Kejriwal has shaken up country's political landscape with promises to change a rotten system: Now he is scrambling to dispel fears that his populism and rabble rousing could be a liability for Asia's third-largest economy.

Barely a year after founding the Aam Aadmi - or Common Man - Party (AAP), the former tax collector made a stunning debut in Delhi legislative elections last month, crushing the ruling Congress party and preventing the Bharatiya Janata Party (BJP) from taking control of the city.

As the country heads to a general election due by May, Kejriwal - now chief minister of the country's capital - is preparing to wrongfoot the mainstream parties on a much larger scale.

If he succeeds, the implications could be profound. He could derail the ambition of BJP figurehead Narendra Modi to become prime minister, and possibly even hold the key to power in post-election manoeuvring to form a coalition government.

The trouble for Kejriwal is that many doubt he can make the leap from populism and street politics to policies that would lift India's economic growth from its slowest clip in a decade.

In his first weeks in office, he slashed power and water prices, banned foreign supermarkets from setting up in the capital and led an unruly protest against the police.

"We will need time to see what policies they establish in a national manifesto," said Natasha Ebtehadj, a fund manager at Threadneedle Investments in London. "However, initial moves do seem to suggest that they will not be prioritising economic reform nor reducing the reliance on unproductive subsidies."


In an interview, Kejriwal spelled out his economic priorities for the first time and said AAP would spur competition, simplify tax, reduce the role of government and make space for entrepreneurship to flourish.

"We have somehow put shackles on private enterprise, this needs to be removed. People need to be allowed to do business," he said at his cluttered apartment in Ghaziabad, a shabby satellite town of New Delhi far from the elegant streets preferred by most politicians in the heart of the capital.

CORPORATE LEADERS AND NOTED ECONOMISTS

The AAP's appeal is broad. Leaders from Apple Inc, Barclay's Capital and software services giant InfosysBSE -0.14 % Ltd have all joined what they see as a revolution against the bribes and graft that are holding India back.

To convince investors it is a serious player, the AAP has set up a seven-member committee to forge a policy manifesto, including former RBS India CEO Meera Sanyal, former Idea CellularBSE -0.64 % Managing Director Sanjeev Aga and noted economists.

That platform is likely to seek foreign direct investment (FDI) in infrastructure and financial services, favour a nationwide goods and services tax to cut business costs and bring in a uniform taxation regime, two sources with direct knowledge of the policy discussions said.

"We are not against FDI per se, we are not saying that FDI should not be in any sector, this is a decision that has to be taken on a sector by sector basis," Kejriwal said.