By Amir Ullah Khan
If I were to choose one word to describe what characterises the Modi government best, it is experimentation. On the economic front, on geopolitics, on the development front and in creating a new social fabric, the government has thrown up a new hypothesis at will and then experimented with it almost immediately. From landing up to meet Nawaz Sharif on his birthday to banning high-value notes, from declaring December 25 as Good Governance Day to closing down the Planning Commission, and from announcing housing for all to doubling farm incomes, the last thing one can accuse the Modi government of is a lack of ambition. Sadly, none of these seem to have worked, while some like demonetisation proved disastrous for the macroeconomic situation as well as for several individuals who lost jobs.
On the governance front, Prime Minister Narendra Modi government tried a slim government at the Centre, then gave up quickly and returned to having a huge team of ministers, including one for yoga. The government tried to amend the land acquisition Act but gave up after its affiliate groups expressed their anger. Modi, who as Gujarat chief minister opposed the GST for years, managed to get all on board and soon made the new tax regime operational. However, the same urge for experimentation showed up again and we soon had what the World Bank castigates as one of the most complex tax systems in the world. A number of businesses, particularly exporters, fight hard to stay afloat against multiple tax slabs, a network riddled with technical problems and a refunds mechanism that takes forever.
Where the government has indeed been successful is in continuing with schemes that existed. Some did better as the prime minister gave them an extra push and the finance minister allocated to them a few more rupees. Toilets are being constructed by the million, bank accounts for the poor have nearly doubled, roads are being built at more than 10 km a day and NREGA continues to provide basic wages to more than 200 million on its rolls. Those that have not worked are the soil health cards, the skilling initiatives and the National Optical Fibre network.
The finance ministry has also been successful in keeping deficits and inflation in check. However, it faces a major challenge in the current government’s final year as crude oil gets dearer by the day and retail prices are going up steadily. A weak rupee also hurts, both the import bill and national pride.
Modi is a fearless politician. He can take bold steps that most leaders would eschew. Unfortunately, with this bravado comes a sheer distaste for expertise. There are no white papers, no discussions in parliament, no inter-ministerial groups, and certainly no public discourse preceding a grand announcement. The time-tested practice of setting up expert groups has been shelved, and unabashedly so. Harvard is a favourite punching bag of the ruling party and its faculty has been derided by the prime minister himself. Modis self-belief is such that each big move is made in secrecy, as a personal whim and it is his pride that is at stake most of the time. The Rafale deal is a telling example, a $9 billion transaction shrouded in secrecy, signed and sealed after what appears to be a quixotic decision made by Modi himself on a short visit to Paris.
No wonder the prime minister continues to rule the rankings. His constituency has got what it voted for; a decisive, strong personality, unfazed by criticism and ready with a solution to all problems. His followers still believe he will get bullet trains running across the country, a Digital Bharat with high-speed networks, smart cities built in 100 locations and clean rivers starting with the Ganga itself. Even if none of this has even started happening four years after the slogans, the fan club is happy to have someone dream big for them. A few of them even believe that their hero is held back because of the socialist decisions that were taken by India’sfirst prime minister, Jawaharlal Nehru.
But Modi will win, someday, they believe.
Amir Ullah Khan is a Development Economist who teaches economics at Indian School of Business and NALSAR.