This government’s modus operandi is constant distraction

It distracts our attention from vital questions of institutional health and economic governance.

Written by Pratap Bhanu Mehta | Updated: December 24, 2016 8:51 am
 institutional health, economic governance, government, UPA, demonetisation, narendra modi, PM modi, modi government, GDP, indian economy, jobs in india, indian economic growth, indian express news, india news, indian express column The first headline would be: Spectre of Stagnation. Despite the headline GDP growth number, private investment has barely moved.

During the second half of UPA 2, the press, with some justification, created a frenzy of anxiety over India’s future, especially its economic future. After two and a half years of the Narendra Modi government, if the same standards of concern about India’s future were brought to bear on the present government, what would the heightened expression of concern look like? Why have the dramatic headlines that focus on worries of substance disappeared?

The first headline would be: Spectre of Stagnation. Despite the headline GDP growth number, private investment has barely moved. In any other context, such tepid growth in private investment would have had us screaming from the rooftops. At the end of the day, this number tells you more about how the economy is doing and is likely to do than almost any other number. Second, we used to joke that India can grow despite the state. But the fact of the matter is that for the first time in a decade, the share of public investment in projects under implementation exceeds private investment. And this is likely to continue for some time.

In short, we are becoming an economy that is not growing despite the state; it is becoming even more reliant on the state. The risks are that such an economy will need constant pump priming by the government, creating all sorts of fiscal and institutional distortions.

Admittedly, the government inherited a slew of problems. But even accounting for that, in any other context, such tepid private investment, combined with weak IIP numbers and job growth would have led to a great expression of economic anxiety.

The second headline would have been: Botched Execution. The Modi government’s self-proclaimed fabled execution capabilities have been severely dented by demonetisation. But even apart from this, its execution capabilities are coming under serious question. One of the better performing ministers in the government, who seems candid and clears bottlenecks, Nitin Gadkari, had the decency to admit that road building targets are way short of his ambitious targets; in fact, they are at an embarrassing six kilometres per day for the year. The mobilisation of private investment for infrastructure is stuck. There are modest successes in energy, on the renewables, but it would be hard to argue that total capacity augmentation exceeds that of the UPA. Four flagship programmes of the government are floundering: Swachh Bharat devolved into a gamed construction project with little appreciable effect on the problem it was designed to tackle; Clean Ganga is probably irrelevant, since you cannot declare the prime minister to be like the Ganga and acknowledge that the river is not clean.

Smart Cities is probably doing less for the health of cities than the distribution of buses under JNNURM alone did for public transport. City government reform is not even on the agenda. Make in India is not much more than a slogan. Admittedly, these are all long-term projects, and the government made unrealistic claims. But that bombast was not, contrary to what we thought, a sign of ambition; it was a sign of lack of thought about execution. Yes, a couple of programmes like Jan Dhan and Aadhar have acquired great momentum, but it would be hard to argue that aggregate execution capacities have increased, if you went ministry by ministry. And execution is important, not just for growth. Because when execution fails, the prospect of the state turning executioner in a literal sense also rises.

The third headline would have been: Hyper Arbitrary State. Let us be very clear. India needs the rule of law. It needs sensible law, respect for law. The core institutions of intelligent law enforcement are police, investigating agencies, prosecution and judiciary. Ask yourself: Have the institutional capacities of any of these increased for the better? In fact, this government’s enforcement imagination is not about the rule of law; it is a very Seventies’ style view that societies can be disciplined by arbitrary injections of fear every now and then. The judiciary and the government are in a serious standoff; the investigating agencies inspire no more confidence than before, and government is being empowered in unprecedented ways to regulate and control the lives of individuals.

Questions of surveillance, privacy, the appropriateness of data-sharing, choice, are all by the wayside; independent institutions that were our protection are being gutted. The advocates of minimum government who excoriated the UPA for statism have left that largest intrusion of the state, across a number of sectors, into our lives unremarked. Is it all because we climbed a measly few places in that ridiculous index of ease of doing business, while almost every other aspect of our lives has become more statist? We have moved from arbitrariness to hyper arbitrariness. The spectre of statism no longer elicits howls of protest; it produces docility.

Even this government’s core muscular claims on defence need critical scrutiny. I would have imagined during the UPA, we would have run the following headlines: India besieged on both ends (that is how Kashmir and Manipur would have been described). As Sushant Singh pointed out in this paper, the number of army casualties on the LoC has doubled this year. So much for the effects of surgical strikes.
During the UPA, there was perhaps a little exaggerated fear of embracing America; in this regime, an almost whole-scale alignment towards American interests is not even provoking a discussion.

Conditions that would have led the press to take out its critical swords, scream Armageddon under the UPA, now barely evoke a whisper.

This may be for three reasons. First, 2004-2009 really spoilt us; we had gotten used to a high and so, when the slowdown came, we were angrier. Now we have settled into an adjustment with the usual muddling. Second, in the UPA, the government did not speak, so we dug up our own assessments of different ministries. Now the government constantly speaks, and we take their briefs. Third, this government’s modus operandi is constant distraction: It will continually provide you with headlines, or a circus that will make sure your attention is diverted from the fundamental questions of institutional health or economic governance.

Our deeper sin is not that we have caved in, but we have fallen for the circus. Governance by distraction and hubris is a recipe for long-term economic Armageddon. But it is a strange alchemy when we no longer fear that prospect.

(This article first appeared in the print edition under the headline ‘Government as circus’)

The writer is president, CPR Delhi and contributing editor, ‘The Indian Express’

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First Published on: December 24, 2016 12:00 am
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    John M
    Jan 16, 2017 at 5:57 am
    PBM........Sir you have hit the nail at the right spot. Thanks for the instructive analysis. You state; 'this government’s modus opei is constant distraction: It will continually provide you with headlines, or a circus that will make sure your attention is diverted from the fundamental questions of insutional health or economic governance.'lt;br/gt;Economic governance is being top-managed, and is getting heavier at the head, while on the ground there appears to be no movements for the better. Job creation is at a standstill, exports are low, farmers are at a loss, service industry has gone into a s etc. The only good thing that Modi has done is on the better governance style, and trying to push 'ease of doing business' policy. However, here too we see no significant growth in business ventures.
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      Prashant
      Dec 24, 2016 at 7:44 am
      I don't know how people play with number games,,,,,I know few things that will surely turn the table,,,,,,I have myself seen ongoing speedy electrification of villages,,,news poles,,new wires,,, whenever I move from Patna to delhi I observe these things,,,,,,,,,,,one vegetable seller told me that""sir just 2 yrs back Getting a LPG connection was a herculean task for BPL families,but in Modi raj ,,I got it for free of Cost ,with a set of Chulha "",,,,,I have seen toilets are being constructed in my villages,, poors are v enthusiastic nd are taking intrest in construction of Toilets,,,,,,,,,,,,,,,,,,,,,I ait that Modi did nothing for Rich,,,,,but poors getting the real benefits which they were deprived of since 70 yrs,,,,,,,,,,,,,,,If u want to see the changes come to Bihar or UP deep interiors,,,u will notice the hope ns enthusiasm among poors,,,No matter they may have voted to Nitish kumar,,,but all of them wanted to see Modi as PM for next 10 yrs
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        Prashant
        Dec 24, 2016 at 7:47 am
        Nd this has happened in mere 2.5 yrs ,,,,,,,
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          Hemant Kumar
          Dec 24, 2016 at 10:28 am
          Till Mr. Modi is at the helm, we need not fear about economy, governance, defence, peace, development and harmony. This writer is peddling lies without giving evidence in support of his adverse report on the govt. These writers want weak central leadership so that they could be wheelers and dealers and they give two hoots for the poor. Raadia tapes showed a sample of their behind the scene exploits.
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            Man
            Dec 24, 2016 at 4:38 pm
            Don't argue with dilip he's a mental case just out of asylum
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              Man
              Dec 24, 2016 at 4:34 pm
              Ignore he has. Gone mad
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                Ash
                Dec 24, 2016 at 2:05 pm
                Why are u reposting same thing or is this a auto post.
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                  Ash
                  Dec 24, 2016 at 2:20 pm
                  Like the man said ,we are willing to give all kinds of goodies for this investment but the jobs will mostly be labour intensive.Not that I am against Foreign Investment.
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                    Ash
                    Dec 24, 2016 at 2:32 pm
                    Wallstreet Jounal and FORBES have criticised the ban of notes.These are esteemed jounals in the finance field.Not some partisan paper.lt;br/gt;As for transparency,the RBI stopped giving out how much money has come back.Finance Ministry seems to be in control of Rbi
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                      Ash
                      Dec 24, 2016 at 2:38 pm
                      Why are you priming Modi.The topic isn't about Modi.
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                        Anonymous
                        Dec 24, 2016 at 11:31 am
                        "Nearly 77 crore incandescent bulbs will be replaced till 2019 in the country which will ensure an annual benefit of Rs 40,000 crore to the people in their electricity bills and this will lead the country to fulfil its need of energy security, which is very vital for the nation as it will reduce dependability on coal,
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                          Anonymous
                          Dec 24, 2016 at 11:30 am
                          "Since the UJALA scheme was launched a year ago on May 1, a total of 9 crore LED bulbs were sold in the country, which means people will get the benefit of Rs 5,500 crore in their electricity bills. It will be implemented across the country by 2019,"
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                            Anonymous
                            Dec 24, 2016 at 11:17 am
                            GARV-2 is a testimony of the last mile delivery that Modi speaks about. We are experiencing Transparency and Good governance that is unheard of.
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                              Anonymous
                              Dec 24, 2016 at 10:28 am
                              In just 18 months, 61% of the villages that were left in dark during decades of Congress rule, have been electrified by Narendra Modi government.
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                                Anonymous
                                Dec 24, 2016 at 11:25 am
                                India's renewable energy generation registers 44.3% growth from last year.
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                                  Anonymous
                                  Dec 24, 2016 at 10:25 am
                                  Nail the lie - jusy one example ---lt;br/gt; A half-yearly analysis by Rural Electrification Corporation Limited (REC), under Ujwal DISCOM urance Yojana (UDAY), has revealed that DHBVN reported a remarkable achievement with a turnaround from losses as steep as ₹471 crore in last financial year to a profit of more than ₹78 crore. REC also observed that DHBVN has improved on billing efficiency and reduced aggregate technical and commercial (ATandC) losseslt;br/gt;lt;br/gt;The government is performing well . We certainly do not want to go back scam raj by congress.
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                                    Anonymous
                                    Dec 24, 2016 at 10:35 am
                                    New figures released by Indian authorities last week put economic growth in the emerging power at 7.5% in 2015, the highest in the world, and up from 6.9% the year before. Growth in China is heading in the opposite direction – predicted to be only 6.3% in 2016 – while the US will expand by a mere 2.6%.
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                                      Anonymous
                                      Dec 24, 2016 at 10:31 am
                                      Remote Village Electrification Programme (RVEP) 2lt;br/gt;Government has implemented RVEP under the Ministry of New and Renewable Energy (MNRE) in various States to provide basic lighting through Renewable Energy Sources in un-electrified villages and hamlets of electrified census villages. MNRE has covered 9006 villages and 2329 hamlets under RVEP so far.
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                                        Anonymous
                                        Dec 24, 2016 at 10:30 am
                                        Remote Village Electrification Programme (RVEP)lt;br/gt;Government has implemented RVEP under the Ministry of New and Renewable Energy (MNRE) in various States to provide basic lighting through Renewable Energy Sources in un-electrified villages and hamlets of electrified census villages. MNRE has covered 9006 villages and 2329 hamlets under RVEP so far.
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                                          Anonymous
                                          Dec 24, 2016 at 10:47 am
                                          The ADB said India’s growth prospects have been buo thanks to the enactment of “long-awaited structural reform.”lt;br/gt;lt;br/gt;The bank lauded “strong progress” in restructuring Indian lenders’ balance sheets, which for years have been weighed down by bad loans. Large corporations are also finding ways to reduce debt, the bank said, which could also help resuscitate long-stagnant lending and investment.lt;br/gt;lt;br/gt;Recent legislation that creates a national goods-and-services tax, the ADB said, is “a key step toward a much more integrated, productive economy.”
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                                            Anonymous
                                            Dec 24, 2016 at 10:41 am
                                            ndia has overtaken China as the fastest growing major economy in the world, expanding by 7.3pc and cementing its position as one of the sole bright spots in a flailing global economy.lt;br/gt;Economic growth is now expected to hit the high of 7.6pc in 2016, according to Delhi's Central Statistics Office, higher than the 7.2pc reached in 2014. India's quarterly growth, measured from the three months to December, was in line with expectations at 7.3pc, and outstripped China's 6.9pc at the end of last year.
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