Chart: India's governance stds worse than what they were in 1996. Blame UPA for that

We’ve always felt that governance standards in India have been declining rapidly over the past few years. Okay, make that a few decades.

Now, there’s a report that confirms that perception. A report from Standard & Poor’s titled ‘India’s Election Is Pivotal For Its Sovereign Creditworthiness’, the ratings agency breaks down just how bad India ranks on issues like government effectiveness, corruption control and regulatory quality. The period analysed is 1996-2012.

From 1996, when the United Front and HD Deve Gowda were in power, only the rule of law began with a positive index score, while control of corruption, regulatory quality and government effectiveness all began in the negative space, with the last factor scoring the least (see chart).

Rule of law hit a high during 1998-2000 (under the BJP-led NDA rule) and then declined to a trough in/around 2002, improved until 2006 (Congress-led UPA-1 was in power), but rolled downhill slowly after that. In 2011-12, it has stabilised but remains much lower than its 1996 levels.

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Government effectiveness hit a new high in 2007, when the Congress was in power. This metric improved for six years until 2006, after which, the metric has trended lower.In fact, government effectiveness fell almost two entire points on the back of the massive Rs 1.86 lakh crore Coalgate scam and similar frauds.

Control of corruption, meanwhile, has seen a mixed trend, hitting highs and lows during both Congress-ruled and other-party rule periods. However, in the last two years measured, corruption control has deteriorated hitting a low not seen since 1996.

Finally, regulatory quality hit a peak in improvement in 2000, and again moved higher between 2004 and 2006-2007, only to decline to a level lower than what it was in 1996.

Indeed, by 2011-2012, all four metrics were below what they started out in 1996. In other words, India’s governance standards are now worse than what they were in 1996.

Who can you blame for that? While there is no doubt that all four metrics have highs and lows during both Congress and BJP-led regimes, there is also little doubt that all the metrics have trended lower without exception during the past four years – during Congress rule.

The credit rating agency’s negative India outlook on its ‘BBB-’ long-term sovereign rating, issued in April 2012, highlights the weakened credit profile. The report states that though the government has made limited responses through its policies to fight the sluggish economic growth and achieved some progress, the impact of those efforts has come late and hasn’t been strong enough to reverse the slide in credit ratings support for the government.