Sunday 28 December 2014

Economics, not politics, key to Modi’s future (Sunday Guardian)

MADHAV NALAPAT  New Delhi | 27th Dec 2014
A labourer walks near a parked bulldozer at the construction site of a bridge being built over the river Yamuna for metro rail in New Delhi on 12 December. REUTERS
From 26 May 2014, Narendra Damodardas Modi began working towards an encore to the election victory of his party, a win for which he was solely responsible. Had the BJP gone to battle under any other leader, its tally would not have crossed 150, and India would now be ruled by a coalition made up of Mamata, Mayawati, Jayalalithaa and other regional party chieftains. ‎Prime Minister Modi was generous in victory, accommodating in the Union Cabinet in key slots even those who had worked hard to prevent him from leaving Gujarat. Prime Minister Modi followed the example of his friend Barack Obama, who reached out to Clinton favourites while choosing his team, leaving out those who had angered Bill and Hillary Clinton by backing Obama over them. By the mass inclusion of former L.K. Advani loyalists (including those who opposed him through much of 2013) in his ministry and core staff, and by adopting policy positions inherited from the past, rather than seeking radical change, Prime Minister Modi has given the lie to the assertion that he is autocratic or dogmatic.
Despite what appears to be a triumphal march towards making the BJP as dominant a fixture in the political landscape of India as the Congress party was during the 1950s and into the middle of the next decade, the reality is that the appeal of the party is still based on hope rather than performance, as will be the case after three years of Modi's rule. In Gujarat, a strong tailwind was given by the efficiency of the administration provided by Chief Minister Modi to the people of that state. Indeed, those from other states residing in or visiting Gujarat have been influential in convincing much of the rest of India to give a chance to Modi to deliver for India what he has done for his home state. Since 26 May, while goodwill for the Prime Minister is still strong, it may have ceased to accelerate. The Jharkhand and Jammu & Kashmir verdicts have been judged by a media newly-friendly to Modi as a triumph, when in fact the BJP drew a blank in the Kashmir valley despite intensive efforts at securing seats there. In Jharkhand, it failed to get a majority on its own, having to be content with a narrow margin of safety. These are not the best of omens for Delhi, for should Arvind Kejriwal emerge yet again as the CM of the city that is now Modi's headquarters, he would be a constant irritant and creator of a counter narrative to both Modi as well as to the BJP.
Although this has yet to get reflected in the mainstream media, for the past two months, a word-of-mouth campaign has been launched to weaken the electoral base of Prime Minister Modi. Among his strengths is the fact that he comes from a backward caste, the same group that is the mainstay of regional parties such as the SP or the RJD. This appeal is being sought to be diluted by pointing to the upper caste leaders represented in the upper echelons of Team Modi, the message of his detractors being that the Prime Minister is a backward caste leader in name only. To damage the narrative about his simple habits and that of his relatives, another word-of-mouth campaign has been unleashed, which portrays Modi as hobnobbing only with the super-rich while staying away from close contact with the poor. Both these charges are unfair to the PM, who is proud of the fact that he comes from a backward caste, and whose family has refused to follow the example of others who have used high political office to clamber to riches. Modi does not own either super-expensive cars or fancy houses. His needs remain modest. However, the BJP will need to be more attentive to the ongoing campaign to discredit Narendra Modi from being a man of the people to being seen as a man of the elite, rather than dismiss this accelerating campaign as being of little consequence. The effort to portray Modi as being both communalist and elitist can be expected to become much sharper during the Delhi Assembly poll campaign, which will kick off in a few weeks' time
The shield that can protect Modi from such barbs and which can ensure future success in the electoral arena is good performance on the economic front. It is Modi's superb management of the economy of Gujarat, which made voters in that state ignore the demonisation of the man by much of the media and the political class, including in countries such as the US and the UK where substantial numbers of Gujaratis reside. Prime Minister Modi will need to demonstrate that he is the leader who can breathe double-digit fire into the Indian economy, and create the over-hundred-million extra jobs that the country needs to accommodate its youth bulge. Relying on the prescriptions of the past or using the bureaucracy as a forum for evolving (rather than implementing) policy may not bring the results needed for Modi to fulfil his election pledge of "Minimum Government and Maximum Governance". What is needed is a regime of low taxes, low interest rates and less regulation, so that the natural entrepreneurial spirit of the citizens of India get unleashed. Domestic industry needs to be energised to compete both locally and abroad. It is because the Modi government as yet seems to have made insufficient headway on the jobs and investment front that controversies that are tiny in the scale of the nation's life are getting magnified because of the continuing lack of good news in the economic front. Modi needs to incentivise the bureaucracy into efficiency and probity, and to ensure that an Indian resident in India gets the policy framework needed to do as well in this country as he or she does in the US or the UK. It was the economy which ensured that Modi emerged as a global superstar, and it will be the economy which will decide his fate in the period ahead.

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