Wrong Sense of Priorities and the Burden of Expectations Mark Modi’s First Year
Ranjit Goswami and Mohit Patel
On 16th May, 2014 India’s Election Commission declared the results of the 14th general election, which saw an overwhelming victory for Mr. Narendra Modi, who nearly single-handedly ran the high-pitched parliamentary election campaign, supported by his trusted aide, Mr. Amit Shah, now President of the Bharatiya Janata Party (BJP). Mr. Modi was sworn in on 26th May last year, as the 15th Prime Minister of India, in a high profile event that has now become trademark of everything that Mr. Modi does.
There has been a trend globally in large democracies like the US, more so in India, where democracy has often resulted in strong divisive politics, and thereby lacking the bipartisan spirit necessary at times for the democracy to function properly.
With Mr. Modi, these emotions run extreme, beyond political parties, to a large section of the populace, and news media. Therefore, expressing an opinion on Modi’s first year as Prime Minister in the Huffington Post Blog demands an honest disclosure of political beliefs that the writers might have, and it is in the footnote. The focus should have been more on performance of the government headed by Mr. Modi; than Mr. Modi himself. However, Mr. Modi himself has transformed India’s parliamentary democracy into, sort of a presidential one, with huge centralization of power in his Prime Minister’s Office (PMO). With such centralization of power, one should also hold the BJP and the NDA responsible for any underperformance, if and when it happens. Because, as long as this centralization works, it is fine; but the moment it signals that such a centralization of power hampers governance, as responsible ruling parliamentarians, it becomes their responsibility to rein in that ongoing scheme of centralization of power.
As B-School faculty members, we always tell students to be careful about expectations management. Tata Nano, if one purely went by all the articles that hit the press before its launch, should have been a super hit car selling in millions. Nano had received unprecedented positive global press until its release. Although no one can exactly pinpoint why Nano failed to achieve such an outcome in reality, one area of agreement has been due to the huge expectations all that high pre-launch press coverage generated. Be it in business or in politics, it is always prudent to under-promise and over-deliver; however, politics globally, and more so in India, never followed that dictum.Therefore, a benefit of doubt should be given in judging the performance of the first year of Modi’s government. A realistic benchmark of evaluation would serve the nation better, and is therefore necessary.
We live in a generation where media often creates demigods out of the common people, and same media demonizes to create villains out of the common people again. President Obama realized it in 2015, in his State of the Union speech when he suggested why sensible leaders, being representatives of the common people, should try and think through their heads than thinking what the headlines of the media would read like. The US and India both share similar media malarkey; much of the local Indian media additionally suffer from lack of depth in credible and quality research, and in its objectivity. With Mr. Modi and his performance analysis, this point is relevant due to the fact that emotions of journalists and analysts often remain extreme on the person, than what he does as a PM. There also runs a perception of Modi’s self-obsession, which naturally gets magnified under the lens of India’s crowded news media.
The first two areas on which this article would scrutinize this government would be on infrastructure related to human development. Basic education and healthcare should remain most critical for decades in India, due to its demography of having world’s 20% youth population. In the clamor of building infrastructure, the nation seems to have forgotten these two critical soft infrastructures, focusing solely and myopically on hard ones.
Modi’s predecessor, Dr Manmohan Singh apparently suffered from the same pursuit of GDP-growth, which Amartya Sen termed as ‘growth-mania’. India needs to recognize that sustainable and higher GDP growth does not need a Viagra, or even one Modi for five or ten years; it needs productive and healthy citizens.
The revised budget allocation in the last budget, as well as the allocation made in this current budget, unfortunately saw significant relative cut in both these two critical areas.
It has now become evident globally that to compete in the global economy, investment in education is the only way. South Korea had been similar to India in the early 1960s, and India was ahead of China in most socio-economic indicators to physical infrastructure till the late 1970s; but the area these two nations focused back then was on quality access of universal primary and secondary education. Primary and secondary education is globally recognized to be part of public goods.
Setting up new IITs and IIMs, to fulfill middle-class aspirations while depriving India’s underprivileged of basic minimum quality primary education in the 21st century, is a crime that had been committed by the last government, and unfortunately this government seems to be following that up. The quality of majority of government schools across states has been unspeakable. The Ninth Annual Status of the Education Report (ASER) shows more than 10% increase in enrollment of the six-to-fourteen age-group students in private schools in a period seven years (2006-13), taking the figure to 29% in 2013; effectively meaning enrolment in private schools grew by 55% in seven years.
The task of improving quality of elementary education in our schools, education being in the concurrent list of the constitution, is not something that can be done easily. Allocating little extra funds to the hugely indebted states is not going to solve the problem. Neither passing merely acts like the Right to Education (RTE), as the last government did, helps; as fundamental constitutional Right to Justice still remains elusive.
The government thought about calling a joint session of parliament to overcome the number deficit in the Rajya Sabha for the controversial and sensitive land bill, now stuck in ordinances. As Indians, we would be most assured had such a gesture or any other effective gesture, along with the states as it has been done for the Goods and Service Tax (GST) bill that needs Constitutional amendment, been sincerely tried to solve the quality problem in India’s state-owned primary and secondary schools. The 2014 land bill act did not need improvements on a war footing within a year, but elementary education in India has been lamenting for decades.
Other than areas of education and basic healthcare, the latter facing a similar fate as education, on the agrarian front too, significant cuts in social spending to controlling Minimum Support Prices of various agro-products (to tame inflation) are something that could have been avoided in the very beginning of this government’s rule. Mr. Modi might have been lucky with lower crude prices, but Indian farmers have not been lucky with the weather. Trinity of JAM (Jan Dhan, Aadhaar and the Mobile), probably a bit hyped now as a panacea for all social remedies, needs time to stabilize; and the Supreme Court has time and again warned not to make Aadhaar card mandatory for any social schemes yet. Scheme like Jan Dhan Yojana has been long-due addressing basic financial inclusion (and the PM needs appreciation here), but it needs careful nurturing over many more years, to be effective. Reduction of leakage in social sector spending is always welcome with technology and financial inclusions, but it should not be done by reducing the relative allocation itself, as it is done with NREGA and other schemes now. Moreover, such cuts do not help the fiscal situation much, but it generates a perception among the people’s mind, too early in the tenure of this government, that Modi-government is pro-rich and anti-poor.
The credit claimed by the government on auctioning of natural resources like spectrum and coal is actually due to activist-lawyers like Prashant Bhushan, stamped by the Supreme Court. The government has rightfully implemented it at a good speed. Similarly, on foreign policy as Mr. Modi spent 52 days out of his first year visiting 18 nations, there is a legitimate perception that the person has sold himself more than the nation. Relationship with key neighbors has strained further, whereas no tangible proof of marked improvements in actual Foreign Direct Investments (FDI) is yet visible.
India needs development more than growth, acknowledging that the money necessary for developmental spending, other than reducing the leakages, cannot come without increase in tax revenue, and therefore without higher growth rates. Edward Abbey said: ‘Growth for the sake of growth is the ideology of the cancer cell’. BJP’s last Prime Minister Vajpayee also had developed huge infrastructure, from roads to telecom, but had to face an unexpected defeat in 2004. The money for higher spending in social sectors basic education and healthcare has always been there; unfortunately the earlier government did not, and the current government so far has not yet shown interest in collecting those hundreds of billions of dollars in taxes foregone. On another front, this government has done well by passing a tough Black Money Bill. No tax relief to the salaried middle class in this first full year’s budget probably has been a negative.
‘Make in India’ and a million job generation a month will remain extremely difficult to achieve with passing years too, more so if India continues to focus more on the speculative sectors (stock market, real estate) than the real economy. As of now, there is no improvement in job generation from those days of ‘policy-paralysis’ of the last government.
Inflation in the economy has been down, thanks to the global environment and RBI. GDP growth rates has already picked up (official data based on market prices), or in the process of picking up, it is claimed. Though there seems to be stability in the global economy with ample liquidity, an atmosphere of uncertainty and risk aversion among global investors still remain, on timing and speed of interest rate hike by the Federal Reserve of the US.
So, it has been a mixed report card, given the external and internal environments. Indians hoping for ‘achhe din’ would sincerely hope that the government does not to get distracted by nonissues becoming priority issues, be it due to the noisy media, or be it government’s own making. There are enough low-hanging fruits in India, all over its socio-economic sectors; and its 1.25 billion people, of whom Modi often talks about, would feel good if the government focuses its attention solely on those low-hanging fruits of development, to take the country forward.
Governing India with its federalism and constitutional institutions is not an easy task. Mr. Modi should be given time, he has the mandate from us – people of India, till 2019. Short-termism, in a way, has been rooted in our culture and in all that our news media engages into; building nations take time and we should give Modi’s government the time for it.
A version of above article was published in The Huffington Post on 28th May, 2015.
