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Centre according to Modi

There are major changes afoot. But they have more to do with politics than policy

Written by Christophe Jaffrelot |
Updated: October 27, 2014 12:04:24 am
Several economists have been disappointed by Modi’s first few days in office. Several economists have been disappointed by Modi’s first few days in office.

Narendra Modi became prime minister on May 26, a little more than 150 days ago, after an election campaign that raised many expectations. According to some of Modi’s staunchest supporters, the modernisation of the Indian economy was set to happen because he would free the caged Indian tiger for good. Political commentator Swapan Dasgupta wrote in May that he was “an Indian revolutionary” a la Margaret Thatcher, who, according to economist Surjit S. Bhalla, “achieved the near-impossible by changing forever the mindset of a socialist, outdated England”.

But several economists have been disappointed by Modi’s first few days in office. They lamented that the Union budget was too much like previous ones, with few liberalisation measures except the relaxation of FDI caps in insurance and defence (from 26 to 49 per cent). But the “worst” was the Centre’s decision not to cut subsidies and to rollback the rail fare hike, a move, according to Swaminathan Anklesaria Aiyar, “so populist, dithering and spineless as to make Manmohan Singh look a lion by comparison”. Some of Modi’s supporters in the West were also surprised by the way his government stalled the WTO Trade Facilitation Agreement in the name of Indian peasants’ interests (and at the expense of the standardisation of customs procedures, which was supposed to add $1 trillion to world trade). But this decision was in keeping with the speech Modi had made as early as on May 20, before the BJP parliamentary party, in which he said: “A government is one which thinks about the poor, listens to the poor and which exists for the poor”. Subsidies for the poor may be criticised as inefficient from the opposition benches, but to cut them once in office and deprive millions is another matter.

In fact, the Modi government has opted for a gradualist transformation, which can be explained by the need to protect his supporters from the corporate sector, who may not like to be exposed to competition, constraints such as mass poverty (a “detail” the election campaign conveniently overlooked), and the weak position of the BJP in the Rajya Sabha. But if it is too slow for the neoliberals, it is too radical for the trade unions. The controversy regarding the Factories (Amendment) Bill, 2014, is a case in point. If the bill is passed, the minimum number of workers to be employed for a unit to be defined as a factory could be doubled, freeing several enterprises from having to comply with the Factories Act, which relates to safety, working conditions and welfare of employees. Such a reform is intended to please Indian entrepreneurs and also, probably, attract foreign investors to “Make in India”. While this is a contentious issue, given the relatively small number of workers in the formal sector, it is not revolutionary. And neither was the abolition of the Planning Commission, which was not the kind of Soviet institution the media depicted it to be, but a useful body that will not be easy to replace.

Gradually, many commentators have come to the conclusion that Modi’s economic reforms are a continuation of the UPA government’s (after all, both are pro-liberalisation), but are not as ambitious as those of UPA 1. And that his greatest impact has not been in the domestic sphere, but in the realm of foreign policy. But the impact of his line of conduct in India should not be underestimated. Indeed, major changes are taking place, though they have less to do with policy than politics.

The concentration of power in the hands of the prime minister is a case in point. It has reached unprecedented proportions, if one goes by the BJP’s own tradition as a party where the Atal Bihari Vajpayee-L.K. Advani collegial modus operandi echoed the RSS’s disregard for the personalisation of power. The new trend results primarily from the docility of the BJP parliamentary party. Senior leaders have been denied tickets and newcomers (including many Congress turncoats) who owe direct allegiance to Modi have been hand-picked. Indeed, in the Lok Sabha elections, Modi supporters may have voted more for him than for their member of Parliament, who was likely elected because of Modi’s appeal.

The PM controls not only the parliamentary group but also the government, in a rather unusual manner. He has been able to give key portfolios to a handful of loyalists and the prime minister’s office relates directly to bureaucrats and short-circuits senior ministers who, in some cases, could not even select their own principal secretaries without PMO approval. Finally, while the BJP’s intra-party elections have always been more meaningful than the Congress’s, Modi has been able to push the appointment of his closest associate as party president.

The state elections in Haryana and Maharashtra have strengthened Modi’s influence over the party since they have shown that, while the BJP lost most of the seats it contested during the bypolls in Uttar Pradesh, Bihar and Uttarakhand, the results were much better when Modi was campaigning, as he did in Maharashtra and Haryana. In both states, Modi saturated the public space by orchestrating well-oiled communication campaigns.

The long-term implications of this personalisation of power may be an eventual de-institutionalisation of the BJP in the same way that Indira Gandhi made the Congress apparatus redundant. This trend was already apparent during the general election campaign, when the teams that canvassed for Modi were not organically related to the Sangh Parivar. The biggest of these parallel power structures was the Citizens for Accountable Governance. But there were others, including the Modi4PM fund and Mission 272+.

Such concentration of power may lead to more effective governance and improve the work culture of the bureaucracy, but the fact that many decisions will have to wait for clearances at the top may also delay the decision-making process. The counter-productive impact of such centralisation could be of a larger magnitude if, like under Indira Gandhi, federal principles are undermined and chief ministers are once again appointed by the PM.

One tends to assume that reforms not made in the first 100 days of a new government remain dead letters. This is probably why Vajpayee made the audacious (revolutionary?) decision to have nuclear tests a few weeks after taking over. India’s second BJP prime minister appears to be following a different path. In terms of policies, the pace of reform may even be slower than that during UPA 1 (when so many changes took place in India) but in terms of politics, the new dispensation may presidentialise the regime at the expense of the checks and balances offered by democratic party systems. This evolution may reach its logical conclusion even sooner if “reforms” diminish the judiciary’s independence, another balancing power centre, the Lokpal, does not materialise, and the opposition remains weak.

The writer is senior research fellow at CERI-Sciences Po/ CNRS, Paris, professor of Indian politics and sociology at King’s India Institute, London, Princeton Global Scholar and non-resident scholar at Carnegie Endowment for International Peace

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