Geopolitical Notes From India
M D Nalapat
WHETHER it recently be in Malaysia or the Maldives, the electorate in
several Asian democracies has the capacity to spring surprises on
strong leaders who believed that they were unbeatable. It is the hope of
a repeat in Delhi of the shock defeat of reigning strongmen in Kuala
Lumpur and Male that is fuelling the campaign of Congress President
Rahul Gandhi. He is on overdrive to ensure the defeat of Prime Minister
Narendra Modi in the May 2019 election to the Lok Sabha (Lower House of
Parliament). In 2014, the BJP led by Modi coasted to a majority in the
national election, the first time a single party secured a majority
since 1984. The Congress Party collapsed to its lowest-ever tally in the
Lok Sabha, a figure too low to even enable the party to cross the 10%
threshold needed to qualify for the status of Leader of the Opposition, a
post that remains vacant to this day owing to the unwillingness of
enough of the opposition parties to combine together to choose one
amongst their number to fill the slot.
The Congress Party does not want to hand the mantle of leadership over to any other opposition party, while the latter are wary of sanctifying the Congress Party as the leader of the opposition alliance through giving it enough support for the Congress Party leader in the Lower House (the mild-mannered and popular Mallikarjun Kharge) to take over as the official Leader of the Opposition. Upon taking office, Prime Minister Modi was given a blank (policy) page to write on. During the campaign, some economists in the BJP (such as former Harvard academic Subramanian Swamy) had called for reducing the rate of personal income-tax to zero and it was, therefore, widely believed that such taxes would at the least be sharply lowered, if not abolished altogether. However, once in power, Modi turned to the same group of foreign-trained economists that had been a mainstay of the economic policies framed by Prime Minister Manmohan Singh. An economist who had called for harsh sanctions on the pharmaceutical industry in India (so as to ensure higher profits to giant US and European drug companies) was made the Economic Advisor to the Finance Ministry.
Another academic was taken away from a teaching job in the US and put in charge of the Planning Commission, renamed Niti Aayog. Raghuram Rajan, a fervent believer in the Milton Friedman Chicago School doctrine of making the common citizen suffer in underdeveloped economies so as to ensure greater control and riches to multinationals and their agents, was continued as Governor of the Reserve Bank of India (RBI). Not surprisingly, he fashioned central bank policies that condemned tens of millions to poverty through shrinking of liquidity and raising of interest rates. For a long time, the RBI regarded any rate of growth close to double digits as symptoms of “overheating”, and worked assiduously to slow down growth through restrictive policies. However, although wreaking significant damage to the economy through his monetary policies, during the close of his term, the then RBI Governor Raghuram Rajan finally turned his attention to the widespread practice of cronies of politicians and officials of ensuring that huge amounts of loans were given, especially by government-owned banks, to such favourites. Such attention was paid only at the close of his term and not at the beginning.
That Rajan is close to former Finance Minister Chidambaram is no secret, and it was therefore understandable that he did not raise the matter of “crony lending” by commercial banks during the period when Chidambaram was the Finance Minister and ensured that officials indebted to him were given prime jobs within the government. Almost all such favourites of Chidambaram have been continued by the new Prime Minister, Narendra Modi, and several of them have, in fact, been given promotion even while they keep in close touch with their former masters. Modi indicated to voters that he would back not simply lower taxes but reduce the complex web of red tape that chokes enterprise and initiative in India. Those who have brilliant ideas for knowledge start-ups soon get drained of momentum in the quicksand of bureaucracy that India remains afflicted by. A few escape to countries such as the US or Singapore and make good on their promise, while many abandon their dreams because of regulatory nightmares.
Unless government procedures get simplified and sharply reduced in number, there is no way that enough jobs will get created to look after the futures of the 11-13 million young people who enter the job market each year. Modi himself assured the public that he would ensure “Minimum Government” once in office, a vow yet to be kept. From the very day he took charge as Prime Minister on May 26,2014, the decision by Modi to retain Manmohan Singh-era favourites in his official team and Vajpayee holdovers in his ministerial ranks created a twin handicap for him as well as the BJP that is becoming apparent enough to those around the Prime Minister. These worthies “see no problem, hear no problem and speak no problem”, which is why they facilitated even such measures as removal of 86% of the country’s currency without ensuring that the liquidity on which the economy depends was preserved. In the 2019 Lower House poll, the way Prime Minister Modi is handling the economy will be crucial in determining the vote. A large number of those who voted for BJP in 2014 did so because of their expectation that Modi will ensure administrative reforms designed to clean up and speed up governance in the country. Clearly the Prime Minister is scheduling such reforms only in a second term and not during his first five years in office.
The danger is that there is a rising chance that Modi will follow the example of Atal Behari Vajpayee. In the months before the 2004 Lok Sabha election, the effective head of the government (Brajesh Mishra,the Principal Secretary to the Prime Minister) was spending most of his time working out policies and deciding which people to reward and whom to punish once the BJP won the polls. As it happened, Vajpayee lost and the Congress Party came to power for two terms. Only Modi can defeat Modi, by making mistakes in policies and personnel. And judging by the mood across the country, this seems to be taking place. As a consequence, Congress President Rahul Gandhi ( who is showing himself to be far more competent than his mother and predecessor, Sonia Gandhi) is looking for a repeat of 2004. The aim is to ensure that the BJP tally falls below 200, a level which would make it difficult for the party to gather enough support to form another government with Modi remaining the Prime Minister. In recent months, Rahul Gandhi has emerged as an aggressive and effective campaigner, seeking to “do a Modi” on Modi by painting the Prime Minister as being less than honest. In coming months, it is expected that the charges against the BJP will rise in volume and number. Rahul Gandhi is on attack mode, and as military strategists know that is often the most effective way to get the better of an opponent who is forced to go reactive and defensive in the face of daily verbal thrusts.
The Congress Party does not want to hand the mantle of leadership over to any other opposition party, while the latter are wary of sanctifying the Congress Party as the leader of the opposition alliance through giving it enough support for the Congress Party leader in the Lower House (the mild-mannered and popular Mallikarjun Kharge) to take over as the official Leader of the Opposition. Upon taking office, Prime Minister Modi was given a blank (policy) page to write on. During the campaign, some economists in the BJP (such as former Harvard academic Subramanian Swamy) had called for reducing the rate of personal income-tax to zero and it was, therefore, widely believed that such taxes would at the least be sharply lowered, if not abolished altogether. However, once in power, Modi turned to the same group of foreign-trained economists that had been a mainstay of the economic policies framed by Prime Minister Manmohan Singh. An economist who had called for harsh sanctions on the pharmaceutical industry in India (so as to ensure higher profits to giant US and European drug companies) was made the Economic Advisor to the Finance Ministry.
Another academic was taken away from a teaching job in the US and put in charge of the Planning Commission, renamed Niti Aayog. Raghuram Rajan, a fervent believer in the Milton Friedman Chicago School doctrine of making the common citizen suffer in underdeveloped economies so as to ensure greater control and riches to multinationals and their agents, was continued as Governor of the Reserve Bank of India (RBI). Not surprisingly, he fashioned central bank policies that condemned tens of millions to poverty through shrinking of liquidity and raising of interest rates. For a long time, the RBI regarded any rate of growth close to double digits as symptoms of “overheating”, and worked assiduously to slow down growth through restrictive policies. However, although wreaking significant damage to the economy through his monetary policies, during the close of his term, the then RBI Governor Raghuram Rajan finally turned his attention to the widespread practice of cronies of politicians and officials of ensuring that huge amounts of loans were given, especially by government-owned banks, to such favourites. Such attention was paid only at the close of his term and not at the beginning.
That Rajan is close to former Finance Minister Chidambaram is no secret, and it was therefore understandable that he did not raise the matter of “crony lending” by commercial banks during the period when Chidambaram was the Finance Minister and ensured that officials indebted to him were given prime jobs within the government. Almost all such favourites of Chidambaram have been continued by the new Prime Minister, Narendra Modi, and several of them have, in fact, been given promotion even while they keep in close touch with their former masters. Modi indicated to voters that he would back not simply lower taxes but reduce the complex web of red tape that chokes enterprise and initiative in India. Those who have brilliant ideas for knowledge start-ups soon get drained of momentum in the quicksand of bureaucracy that India remains afflicted by. A few escape to countries such as the US or Singapore and make good on their promise, while many abandon their dreams because of regulatory nightmares.
Unless government procedures get simplified and sharply reduced in number, there is no way that enough jobs will get created to look after the futures of the 11-13 million young people who enter the job market each year. Modi himself assured the public that he would ensure “Minimum Government” once in office, a vow yet to be kept. From the very day he took charge as Prime Minister on May 26,2014, the decision by Modi to retain Manmohan Singh-era favourites in his official team and Vajpayee holdovers in his ministerial ranks created a twin handicap for him as well as the BJP that is becoming apparent enough to those around the Prime Minister. These worthies “see no problem, hear no problem and speak no problem”, which is why they facilitated even such measures as removal of 86% of the country’s currency without ensuring that the liquidity on which the economy depends was preserved. In the 2019 Lower House poll, the way Prime Minister Modi is handling the economy will be crucial in determining the vote. A large number of those who voted for BJP in 2014 did so because of their expectation that Modi will ensure administrative reforms designed to clean up and speed up governance in the country. Clearly the Prime Minister is scheduling such reforms only in a second term and not during his first five years in office.
The danger is that there is a rising chance that Modi will follow the example of Atal Behari Vajpayee. In the months before the 2004 Lok Sabha election, the effective head of the government (Brajesh Mishra,the Principal Secretary to the Prime Minister) was spending most of his time working out policies and deciding which people to reward and whom to punish once the BJP won the polls. As it happened, Vajpayee lost and the Congress Party came to power for two terms. Only Modi can defeat Modi, by making mistakes in policies and personnel. And judging by the mood across the country, this seems to be taking place. As a consequence, Congress President Rahul Gandhi ( who is showing himself to be far more competent than his mother and predecessor, Sonia Gandhi) is looking for a repeat of 2004. The aim is to ensure that the BJP tally falls below 200, a level which would make it difficult for the party to gather enough support to form another government with Modi remaining the Prime Minister. In recent months, Rahul Gandhi has emerged as an aggressive and effective campaigner, seeking to “do a Modi” on Modi by painting the Prime Minister as being less than honest. In coming months, it is expected that the charges against the BJP will rise in volume and number. Rahul Gandhi is on attack mode, and as military strategists know that is often the most effective way to get the better of an opponent who is forced to go reactive and defensive in the face of daily verbal thrusts.
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