For India's Ruling Party, an Electoral Setback NEW DELHI - After the policy paralysis and political acrimony of last year, India's coalition national government had hoped this year would be different. Yet already the government is troubled by infighting among coalition allies. And the Indian National Congress Party, which leads the coalition, has been further weakened by lackluster showings in recent state elections. For India, the prospect of another year of political stasis has deepened the sense of gloom among business leaders and others already frustrated by the government's inability to tackle crucial reforms at a time when India's economy is slowing down. Even as most economists are still confident about India's long-term future, the optimistic mood that once prevailed is now tempered by growing doubts. "The greatest single challenge the government faces is restoring confidence in the idea of high growth, that India is a high-growth country," said Nitin Desai, a former chief economist to the Indian government. Congress Party leaders had hoped a good showing in the recent elections in five states would provide the party with a public endorsement and strengthen the national government by attracting new allies. But when the results were announced on March 6, the party fared poorly in the crucial states of Punjab and Uttar Pradesh, and lost an opportunity in Goa, while winning power in the small states of Uttarakhand and Manipur. Many analysts and even some party insiders say the elections revealed the party's organizational weaknesses and exposed the risks of depending too much on the appeal of the party's ruling family, the Nehru-Gandhi dynasty. Rahul Gandhi, who is often considered a prime minister-in-waiting, campaigned extensively in Uttar Pradesh, the country's most populous state, yet failed to achieve major gains there. The mediocre showing in Uttar Pradesh has been portrayed as a personal comeuppance for Mr. Gandhi, but some party insiders say the deeper problem is the structural disconnect between party leaders - the so-called High Command led by Mr. Gandhi's mother, the party president Sonia Gandhi - and grass-roots workers. Like most Indian political parties, the Congress Party lacks much internal democracy; the High Command selects candidates for state and national elections rather than holding competitive primaries. Many analysts say primaries would help the party cultivate stronger organizations at state and local levels - and make it more competitive, as regional parties are presenting themselves as more attuned to local concerns. "There is such concentration of power right at the top that the connection between the leaders and the workers is completely broken," said Mani Shankar Aiyer, a Congress Party member of the Rajya Sabha, the upper house of Parliament. He added, "That's the kind of lesson that my party needs to learn." This top-down dispensation of positions has already marred what had been a bright spot for the Congress Party. In the state election in Uttarakhand, where the party won enough seats to form a government (though barely), the High Command overlooked a popular state leader and appointed someone else as chief minister, inspiring a rare insurrection from members of the state party. Improving internal democracy is not a new idea within the Congress Party. Mrs. Gandhi's husband, the former Prime Minister Rajiv Gandhi, who was assassinated in 1991, had proposed creating primaries. Yet the party has never followed through, partly because of fears that it could be splintered into factions, partly because the Gandhis represent a unifying force. Yet investing so much in promoting the personalities and mystique of the Gandhi family bears risks, too. "Now, the Congress Party realizes that the country is changing," Mr. Desai said. Voters are judging parties in terms of performance, instead of personalities. This is the message from the elections: Perform or perish. Digvijay Singh, a key party strategist and an architect of the failed campaign in Uttar Pradesh, predicted that voters would support the Congress Party in national elections and noted that the party did gain vote share in Uttar Pradesh, if not as much as leaders had hoped. He blamed the lack of a credible statewide leadership for the Uttar Pradesh results - in which the regional Samajwadi Party took power - and said the other national party, the Bharatiya Janata Party, had fared even worse. "The national parties have to strengthen their political leadership at the state level," Mr. Singh said. We have tried, but there are some problems. In New Delhi, the Congress Party has been on the defensive since the election results were announced. Indian media outlets have speculated on whether the government will fall, meaning early elections, while some regional leaders have loosely discussed organizing a "third front" coalition of regional parties to contest national parliamentary elections in 2014. Meanwhile, allies, more than enemies, have restricted the government's ability to move forward on important economic reforms. Mamata Banerjee, leader of the Trinamool Congress Party, whose support is critical to the survival of the government, has exercised de facto veto power on several issues. This week, she demanded the resignation of the railways minister, a member of her own party who bucked her wishes by presenting a budget that called for fee increases that Prime Minister Manmohan Singh and others considered essential. Mr. Singh was forced to accept the minister's resignation, even as he praised the minister and the railways budget proposal. At the same time, with newspaper editorials calling for bold measures, Finance Minister Pranab Mukherjee last week presented a cautious budget plan - careful not to alienate allies like Ms. Banerjee - that drew some tepid praise alongside complaints that too little was done to address India's fiscal deficit or to stimulate growth. Mr. Desai, the former chief government economist, was less critical. He pointed to new financing for infrastructure projects and a commitment to reduce bloated subsidies on commodities like fuel, a huge drain on the budget. "The main thing is they must deliver on the things they have promised," he said. Let's see.