Modi’s one year: A big disappointment

 

When Narendra Modi became Prime Minister on May 26 last year, it was expected to be a change in regime, not just of government; there was widespread optimism about be a sea change in statecraft and economic policy; achhe din seemed imminent. A year later, with the Modi government showing commitment to continuity rather than to change, all the fond hopes have been dashed.

But let’s begin with the good things. First, this government has not been involved in any scam; to be precise, we don’t know as yet of any. This fact has been repeated by Modi, his ministers, and other supporters many times. It is somewhat like a man claiming to be a good husband just because he doesn’t beat his wife. But still it is an achievement because of the background in which in which he had assumed office; the Congress-led government had crossed all limits of decency and propriety; the Modi regime indeed looks very good in comparison with the kleptocracy that was presided over by Sonia Gandhi.

The Modi government has also done well by accepting the Finance Commission report for greater devolution of funds to states. Another plus is the passage of the goods & services tax legislation in the Lok Sabha, though the ambit got truncated as fuel and liquor have been kept out of it.

 

Boost to defence preparedness

In the domains of internal security and national defence, too, the government’s performance can be called satisfactory on the whole. While Islamic terror and Maoist menace have not been eliminated, they seem to be under control. More importantly, the sympathizers and overground supporters of jihadists and Naxals—an assortment of human rights campaigners, tribal rights champions, and sundry other activists—have been disempowered. Two reasons can be attributed to it. First, the very matrix of the ecosystem in which these parasites grow, the National Advisory Council under Sonia, has been disbanded. Second, the activists themselves hate the Bharatiya Janata Party and, therefore, don’t come near it.

On the front of defence preparedness, the Modi government has issued 46 licences in the defence sector to produce items including light armored vehicles, artillery weapon systems, UAVs, and underwater systems, Minister of State for Defence Rao Inderjit Singh informed the Lok Sabha on May 8. “Israel, Japan, and Republic of Korea have evinced interest in the defence sector under the Make in India initiative,” he added.

These developments are likely to have a good impact not only on defence preparedness, which is in shambles, but also on manufacturing, which is ailing, and job generation. Especially, because 60 per cent of our defence requirements are met through imports. While inaugurating Aero India 2015 in February, the Prime Minister said, “There are studies showing even a 20-25 per cent reduction in imports could directly add up to 120,000 highly skilled jobs.” Provided it happens.

Yes, the intentions are noble, the destination is known, the path is familiar; yet, the Modi government doesn’t know how to embark on the journey. At the heart of the conundrum lies ideological vacuity and intellectual deficiency. As a votary of Hindutva—which, as spelt out by the BJP’s greatest ideologue Deendayal Upadhyaya, is the saffron version of Nehruvian socialism—Modi is wedded to the thinking patterns, governance imperatives, and policy paradigms which have developed since Independence. In essence, he does not find anything wrong with the Nehruvian statism, though before becoming Prime Minister he did make a few statements like ‘the business of government is not business’ and ‘enough of doles.’ The only issue, he thinks, is efficiency; a little bit of efficiency can and will do wonders. And since he is efficient—and there can be few doubts about this—India would become prosperous, strong, a superpower, etc. QED.

 

Hindutva undermines Hinduism

The fallacy in Modi’s syllogism emanates from the premise that the existing structures—whether of policy framework, economic regulation, public sector undertakings, or welfare schemes—are good. The very premise is erroneous. Modi’s error is grave because it has forced him not only to turn his back on the Enlightenment ideals of liberty, reason, and individualism but also on the fundamental tenets of Hinduism, which are dharma and karma. If Modi & Co wants to be known as true Hindus, they should orient the country’s economic policy of India around the Hindu ethos. The dharma and karma of government is governance; it should do that and not intervene in the economy, society, culture, arts, or any other sphere human activity. Similarly, the dharma and karma of businesspersons are wealth generation; they should do that only, and not meddle with policy. When these principles are not adhered to, the consequences are crony capitalism, corruption, favoritism, and slow development.

Unfortunately, this has not happened. The Modi government has not been to create a business environment that is non-interventionist, predictable, and investor-friendly. The biggest hurdle is retrospective taxation which the BJP had earlier termed as ‘tax terrorism’ but, after coming to power, continued with it. Finance Minister Arun Jaitley has employed all sophistry in his repertoire, and that is considerable, to convince investors that the current tax regime has done away with the worst features of retrospective taxation, but to no avail. Apparently, the present government does not want to give up the interventionist powers, even if it wants to use them sparingly. Perhaps it thinks that, because it is more efficient, it would be judicious in the use of these powers. At any rate, industry is not impressed, as evident from the almost absence of any major investment, despite big promises of billions of dollars pouring into India. As a consequence, jobs are not being generated and the people are still waiting for the achhe din.

What investors wanted was the end to retrospective taxation; what they got was 5 per cent reduction in the corporate tax rate. There is a saying in Hindi: Andha kya maange? Do aankhen (What does a blind man ask for? A pair of eyes). In the present instance, it was like offering an expensive gift instead of eyesight to a blind man. In the bargain, the impression about the government being pro-industry and anti-poor strengthened, while industry remained dissatisfied.

At the same time, little was done to decrease the burden of income tax on the middle classes, the BJP’s main constituency.

 

Still socialist maneuvers

Similarly, on the front of inflation, the approach is conventional; for instance, there is something called price stabilization fund, a typical socialist mechanism. In its election manifesto, the BJP did talk about reforming the Agricultural Produce Market Committee (APMC) Act, which results in lower remuneration for farmers and higher prices for consumers, but again little has been done to repeal or reform APMCs. Therefore, inflation has not come down as much as it should have despite lower crude prices.

And, of course, farmers have been left high and dry because there has been no fundamental change in the policy framework. While reform in the APMC legislation would help them, what they have been offered is Kisan Channel—again a typical statist maneuver. To make matters worse, the BJP government is trying to amend the land acquisition law which the party had supported in 2013. The justification offered is that it would boost industrialization. But the point is: why should be farmers coerced to part with their land for the sake of industry? If somebody wants to acquire a piece of land for an industrial unit, they should negotiate with the landowner. Why should government act as his property dealer?

The BJP’s U-turn was not confined to the land acquisition issue; in the case of the draconian Section 66A, too, the party did a somersault. While in the Opposition, it clamored against the provision, but once in office it argued for its continuation. Thankfully, the Supreme Court trashed its arguments and gave the government a bloody nose.

Emboldened by the supposedly pro-Hindu party getting a full majority in the Lok Sabha, many saffron leaders have made obnoxious remarks about the minorities, especially the Muslims, thus bringing disrepute to Hinduism. But they and other self-appointed champions of Hindus have not done anything to anything substantive; the uniform civil code has been forgotten, Article 370 is still in place, and the Kashmiri Pandits are still in exile. Worse, the BJP is in alliance with a pro-Pakistan and pro-jihad party in Jammu & Kashmir.

And we have not even discussed the popular subjects like bringing back black money, throwing corrupt politicians behind bars, punishing Dawood Ibrahim, and liquidating terror networks in Pakistan.

The Modi dispensation must do three points. First, it should stop following the Shiv Khera-like principle that good governments don’t do different things, they do things differently. Doing things differently or more efficiently would take it nowhere if the principles adhered to remain rotten. Any number of sops and any kind of television channel would not remove farm distress if the policy framework continues to be socialist. Any number and manner of restructuring of public sector undertakings and banks would be ineffective, as they have been in the past; the only way out is privatization.

 

Nobody is divine

Second, the government must realize that it is not divine. God said, ‘Let there be light,’ and there was light. Hindu gods and seers gave boons just by saying, ‘Tathastu.’ The Prime Minister and his Ministers, however, are not gods; just by expressing noble intentions they cannot expect results; they have to work for the results.

This brings us to the third point—the Law of Unspecified Prerequisites. If a student wants to excel in studies, he has to work hard; making resolutions that he would do so from tomorrow or worshipping some god would not help him. If I want to have a physique like a model, I have to exercise regularly, cut down unhealthy food, and have a regulated routine. So, if Modi wants investors to set up factories in India, his government must address their concerns.

The Modi government, however, seems convinced that organizing jamborees and making pompous speeches—has there been a single day in the last 365 when the Prime Minister has not addressed the nation in one form or the other?—are substitutes for governance and development. They are not; the sooner Modi realizes that, the better it would be for him, his party, and the country.