Updated: June 9, 2015 1:05:46 pm
Narendra Modi has a fondness for the word “inclusive”. Rarely has there been a landmark occasion in the prime minister’s first year that the magic word has not made an appearance. Ironically, prior to his election, this was not a man most associated with inclusiveness. Much of the concern that swirled around him had to do with his exclusionary record — ranging from the status of minorities in Gujarat to his autocratic governance style.
Modi was elected on a platform of getting the economy going again and yet, over this past year, his rhetoric has invoked more inclusive growth than fast growth. “My philosophy, the philosophy of my party and the philosophy also of my government is, what I call ‘sabka saath, sabka vikas’… the impulse of that particular motto is to take everybody together and move towards inclusive growth,” he said to Time magazine. The major domestic policy offerings in the year gone by, from the budget to the formation of Niti Aayog, the announcements of big initiatives such as the smart cities project or Jan Dhan Yojana, were all lit by the soft glow of inclusion. Even foreign policy has been graced by it. Modi in Japan offered: “We will explore how Japan can associate itself productively with my vision of inclusive development in India,” whereas in Germany, he said: “Our focus is not merely economic growth but an inclusive development.”
Since the frequent repetition of “inclusive” is so integral to Modi’s mantra, it is natural to ask how frequently it is repeated in Modi’s action. If this first year is any indication, India is unlikely to rocket up the inclusiveness index in coming years. Indicators point towards an administration that will prioritise near-term fast growth over the slow and often painful process of inclusive growth. Inclusive growth is not just an outcome measured by a simple GDP growth rate; it is a process that calls for wide participation and equitable sharing in the benefits of growth. There is a tradeoff to be made if there is an urgency to jumpstart a stalling economy. The experience of fast-growing economies is one of exclusionary growth: scarce resources have to be focused in certain sectors, regions and parts of the population with the greatest potential. The Modi record on inclusion can be evaluated along three dimensions.
One, governance inclusion. By some measures, it would appear that the political power structure has, indeed, tended towards greater inclusion: Modi has adopted a more decentralised approach by delegating greater power and tax revenues to the state governments. However, the Centre presides over a competitive federalism model. Modi’s style of governance is more Lee Kuan Yew and less King Arthur. What is missing is a spirit of debate among confident deputies unafraid to challenge the king and project a broader leadership team with multiple poles of expertise and executive function. Arguably, this is the strong leadership that Manmohan Singh never projected, and it has its benefits in a country with many disparate forces. But on the whole this is a model of leadership and governance that has taken several steps away from inclusiveness.
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Two, economic inclusion. Modi clearly favours the “hard” levers for moving the economy in the near term, with his priorities on manufacturing, infrastructure development and attracting foreign investment. There are “soft” levers that play a more indirect role and are more fundamental to sustaining growth over the longer term. The prime enablers of inclusion are: access to education, healthcare and financial capital. On at least two of these three, Modi’s record falls short.
Education has not received enough attention and has had its allocation cut by 16 per cent in the last budget. Already, India’s allocation of 3.8 per cent of GDP on education in 2012 was lower than the global average of 4.9 per cent in 2010, according to the World Bank. Other than disconnected initiatives, including an ambitious goal of providing vocational training to 500 million people by 2022 and promises to build additional IITs and IIMs, more systematic and realistic investment in different facets of education has been absent. Similarly, in healthcare, public health has been cut in the national budget and the responsibility has been pushed out to the states. Budget allocation to public healthcare has been reduced by 8 per cent.
Financial inclusion may be the one area with some tangible progress. Credit should be given to the administration for opening a record number of bank accounts in a week. Of course, we should pay close attention to the words of caution from RBI governor Raghuram Rajan: “The target is universality, not just speed and numbers.” Increasing bank accounts in record numbers is a start, but for real impact, much more is needed — such as financial and other forms of education, where we have already noted the challenges.
Three, social inclusion. On social issues, Modi has acquiesced and looked the other way while the Hindutva forces have been on the ascendant. The marginalisation of religious minorities, especially Muslims, has only increased in the past year. Other than occasional tweets with a mild scold or a message or two to the Sangh Parivar that hate speech against minorities will not be tolerated, Modi has done little to discourage or take action against this growing trend. Moreover, a number of initiatives — from bans on cow slaughter to the introduction of the Bhagavad Gita in school curricula — add up to a disturbing pattern of an increasingly intolerant and non-inclusive society.
In his anniversary speech in Mathura, the PM spoke of the poor as “my warriors”, with heavy overtones of inclusion. But, thus far, in practical terms, he has proven to be a reluctant inclusionist. Of course, one might argue that no Indian politician can afford to retreat from the poor and the disadvantaged in his rhetoric. However, they have also learnt that reality cannot lag behind the rhetoric for too long. In coming years, Modi will have to make a choice: declare himself, as many suspect, a trickle-down Reaganite or put his money and policy where his inclusive words have been.
The writer is the senior associate dean of international business and finance at The Fletcher School, Tufts University
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