Sunday, August 31, 2014

The PM's vision for the nation

It has now been two months, to the day, since Prime Minister Narendra Modi and his cabinet took the oath of office in the forecourt of Rashtrapati Bhavan. The BJP-led NDA government took office amidst extraordinary expectations.
Yet, two months later, there is a sense of bewilderment as to just when we will hear that Big Bang which will translate his election promises into policy and outcomes. In all fairness, new decisions have been made and directions indicated, yet, the sense of excitement that greeted the Modi government's accession to office seems to have dwindled.
Arun Jaitley's workmanlike budget, Prime Minister Modi's foreign outings, cabinet decisions and pronouncements, do indicate that the government is working. The strategic signalling in the Union Budget – the decision to hike FDI in insurance and defence to 49 per cent, the significant increase in aid to neighbours like Bhutan, the sharp hike for the North-east and infrastructure spending – point to the direction the government is going. But it does not quite live up to the expectations of the government which had promised to turn things inside out and bring ache din (good days) to the country. 

Arun Jaitley's Budget suggests the Centre is on the right track. But Prime
Minister Modi has to work hard to live up to the promise of 'ache din'
Arun Jaitley's Budget suggests the Centre is on the right track. But Prime Minister Modi has to work hard to live up to the promise of 'ache din'


The impression you get is that yes, things are happening, but outcomes will only be visible in the fullness of time and fitness of things. For the people who voted in droves for Modi, there is a perceptible sense of let down, deepened by the gloom accompanying a failing monsoon and high food prices. Yet, there does seem to be a strategy behind all this. Whether it is the best strategy, only time will tell. But it is the one which the Modi team appears to be working on.
The elements of this strategy are first: the importance of consolidation. All said and done, Modi was an outlier in the system. He was not part of the BJP's succession plan, it's safe to say that he gate-crashed the party. Having done so successfully, his priority is to assume control of the party, a process begun by the appointment of his closest aide, Amit Shah as the BJP president.
This is a process which involves him in consultation and competition with the RSS and we only get hints of it, such as the announcement, later retracted, that the BJP would have to go in for the Maharashtra elections minus RSS support.
The second goal is to build on the spectacular success of the party and expand its hold beyond its current core of western states. The target states are the ones going in for elections soon – Maharashtra, Haryana, Jammu & Kashmir, Jharkhand and possibly Delhi, as well as Uttar Pradesh which appears ripe for plucking, except that the assembly election is still four years away.
The second aspect of the strategy appears to be Modi's caution in undertaking deep restructuring and reform without first getting an adequate grasp of the problems that confront him. The first lesson he has learnt as Prime Minister is that it is very different from being the chief minister of Gujarat. According to sources, Modi has decided to go through key files in detail and get an understanding of the problems that he confronts through briefings by the various ministry officials.


Modi's other problem is a shortage of talent. In part this is an outcome of his decision to keep a tight control over his government. The result is that Jaitley has to deal with two heavyweight portfolios, Ravi Shankar Prasad is Minister for Communications, Information Technology and Law and Justice, Nirmala Sitharaman is Minister for Commerce and Industry, as well as Finance and Corporate Affairs and Jitendra Singh is Minister for Science and Technology, Earth Sciences, PMO, Personnel and Public Grievances, Department of Atomic Energy and Space.
Essentially, all this indicates Modi is playing for the long run. But, in the process, he could be making a tactical error which can have strategic consequences. In the Westminster system, it is well known the best time to take tough decisions is at the beginning of a term. Maggie Thatcher launched her deflationary strategy almost immediately after assuming office in 1979 which defeated inflation, but led to huge unemployment which was necessary for the longer-term prosperity of UK. And immediately after she was re-elected in 1983, she took on and defeated the powerful trade unions.


Likewise, Prime Minister Narasimha Rao and Finance Minister Manmohan Singh launched the liberalisation of the Indian economy within the first two months of taking power in 1991 opening up the Indian economy for international trade and investment, deregulation, initiating privatisation, tax reforms etc. A hallmark of their success, and the failure of subsequent governments, has been that the second generation reforms to take on powerful lobbies of rich farmers and public sector trade unions have not been undertaken, leave alone those to reform labour practices, agricultural subsidies and so on.
Experience would suggest the best time for Modi to take tough decisions is now when his popularity is at an all time high and his adversaries, both within his party and without, are still shellshocked. If he can stake out the key elements of the long-awaited second generation reforms, he can spend the balance of his tenure working to implement them. The alternative is that he waits too long and finds that he lacks sufficient political capital to even introduce them.
Mail Today July 29, 2014

No comments: