Updated: May 2, 2015 12:00:06 am
The Modi government is caught in a contradictory reality. With the impending passage of the GST, its legislative accomplishment this session of Parliament is impressive. There is a sense of purpose and clarity to foreign policy. Potentially game-changing architectural decisions like financial devolution and the creation of a direct benefit transfer structure are being implemented. The perception is that transactional corruption, at least, has come down. The sense of defeatism has gone. Yet it’s also true that the government has lost much political momentum.
There are three explanations for this. The government’s own story seems to be that this is a communication problem: more is being done than people say is being done. The second explanation is that its handling of the land bill was needlessly confrontational. Along with agrarian distress, it provided a flashpoint for the Opposition. The government has not handled the agrarian distress and stagnant rural wages well. The promise of a distant future transformation does nothing to relieve present anxieties: you can’t eat the future. A sensible compromise on the land bill, acknowledging the principle of consent, tightening the definition of public purpose, reintroducing a workable social impact assessment, for instance, would signal more statesmanship.
But the third explanation is that the government is caught in traps, some structural and some of its own making. The structural trap is the economy. Luck is always a double-edged sword. The government benefited from the windfall of global energy prices. But the legacy of past sins still haunts the economy. As the economic survey noted, the prospects of private investment picking up in the short and perhaps medium run are dim. The massive clean-up of state-capital relations is slow. Will India have credible factor-pricing frameworks, reliable contracting mechanisms, an intelligent banking system and transparent regulation? Will these be translated into credible administrative frameworks? Is Indian capital ready for them?
Second, reform has a paradoxical effect. Growth is tepid during the process of far-reaching structural and legislative reform. The GST may be a game changer. But in the short run, it will cause much financial and administrative uncertainty for business, as adjustments take place. This may be at least a two-year cycle.
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This government has placed its bet on its execution capabilities. There is a lot of excitement in important ministries like railways. To be fair, many of the government’s projects will take time. But scepticism over its execution capabilities is growing. Capital expenditure has not gone up substantially. There is not a single exemplary project that the government can hold up to visually personify its execution capabilities. Swachh Bharat is more communication than a credible plan, Clean Ganga will take years to be visible. Smart Cities is sounding more like a watered down version of the JNNURM, without even the attempt at governance reform.
But politically, the BJP now has a Congress-type problem. The rule of modern politics is that a party is often defined by its weakest link. With apologies to the Bard, the evil that parties do will live on TV, the good will be interred with their electoral defeats. There are fewer margins of error. It is becoming harder for Narendra Modi’s own speeches to overcome the credibility problems created by an assortment of idiocies in his party. A modern communication strategy is not about the leader giving a message; it’s about ensuring that the public culture of the party doesn’t derail that message. But this gap is making Modi look more insincere or weaker than he recognises. In a strange reversal, BJP spokespersons are looking mendacious in the way Congress spokespersons did.
The BJP has forgotten that a core of good CMs is vital to its electoral strategy. But the impression that the new CMs are not independent, or possessing the capacity to consolidate control over a state, is damaging their authority. In Haryana, the change in mood against the Manohar Lal Khattar government is palpable; Rajasthan is vulnerable; in Maharashtra, too, there is a sense of the CM’s weakness. The lack of local leadership in West Bengal has stopped the BJP momentum in its tracks. It is looking at electoral reverses in UP, Bihar and Bengal. Even if there is, as we now suspect, a disjunction between state and national politics, the BJP is looking at a rougher road ahead.
For all the surface bravado, it is on politically shakier ground. If you want evidence, witness the government’s dithering on the border settlement with Bangladesh. There is talk that the bill will be introduced but may exclude Assam. This will send a wrong signal. It will dent India’s credibility with a neighbour we have a great opportunity to resolve all outstanding issues with, and it will raise the spectre of the degree to which our foreign policy is still hostage to small interests.
The government may, with some justification, say that it has no investment in religious polarisation, and it is engaged in outmanoeuvring the right. But the unthinking social conservatism and control that it projects, whether on free speech or marital rape, makes the shadow of the past dominate the promise of the future. The government has been blindsided on health and education. The HRD minister may want to dismantle closed elites but, to put it mildly, not a single proposed measure increases anyone’s confidence in the future of education. Millions of first-time voters will seek admission next month, and there is no message of reassurance for them.
Finally, like every government, this one has paid no attention to administrative reform. The fact of the matter is that effective bureaucracy works on clear direction and processes. Centralisation of power in the PMO has made processes even more opaque, disempowering bureaucrats in their routine functions. Second, as Arun Jaitley is discovering, making pronouncements on the simplicity of taxation is easy; aligning an administrative structure with this intent is much harder.
A lot is happening. But equally, deeper problems are lurking. These are yet salvageable. But when a government starts blaming bureaucrats and the media for its problems, you know it’s struggling. No wonder even an enfeebled Opposition is smelling possibility.
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