Catching up on the Economic Agenda!

Social Media is an ongoing battlefield for the IT Cells of political parties. There, you routinely find claims and counter claims by BJP and the Congress, which get forwarded and go viral.  Among the regular updates from the BJP side, the ones which are popular are those where Narendra Modi era (Post 2014) and Manmohan Singh era (2004-2014) are compared which show how the country has progressed rapidly in the last 7 years whether it is Highways construction, Rural Electrification, Toilet construction, Clean water supply etc. etc. However, one thing on which the BJP IT cell is put on the back foot by the Congress is the Economic growth. This is a graphic which is popular among the Congress supporters and rightly so where in comparison, the Singh era shows higher average GDP growth than the Modi era, so far.

I am certain that if there is one thing Modi as a person, who likes to leave behind a legacy in whatever he does, would like to correct, it would be this. Frankly, I had high hopes from this government in its first term on its economic agenda. I thought that with a clear majority, it will pursue bold and long pending reforms with a much higher vigour than the reformist Vajpayee Government which was always bogged down by coalition pressures.  It turned out that, but for the introduction of GST (a landmark and very important reform, in my opinion) and Demonetisation (in which the costs outweighed the benefits), the 1st term was lack lustre and was more or less on “Maintenance mode” as far as pursuing a bold economic agenda was concerned.

It is my opinion that lawyers do not make good Finance ministers. P.Chidambaram, a fine lawyer, who is regarded as one of the most reformist Finance ministers the country had, always use to come up with one nit picking thing in his every budget, which cast a dark shadow on all the other good reforms he came up with. We all know what happened with Pranab Mukherjee, another Finance minister with a legal background. His retrospective taxation idea much against the wishes of even the economist Prime Minister Singh, punctured the “India Story” then and our economy went into a tailspin. So, that’s what happened with the Modi Sarkar in its first term. Arun Jaitley, another fine legal eagle was picked as the finance minister but, even during his regime the retrospective taxation was not rolled back! With no much economic traction, the 1st term of Modi ended on a disappointing low economic growth path.

In 2019, when Nirmala Sitharaman was made the Finance minister in a very surprise move (not Piyush Goyal who was touted as the favourite), expectations were quite low. But, I had mentioned that time, that she could surprise the critics at the end of the day. I felt that considering her background and her studious nature, she can be expected to meticulously follow the agenda as laid out in the manifesto. Not just that, but also follow through methodically in terms of execution.  You can see that this is what is happening now.  In her 1st budget in 2019, when corporate taxes were cut – a bold economic move to boost private investments and sentiment, it appeared that the Modi Government in its second term had got its intentions right in pursuing its economic agenda to boost growth which faltered in the 1st term.

 

The pandemic though, which hit all economies hard including India in Feb/Mar 2020 put a spoke all further bold moves. Economic management during a pandemic is a double edged sword. The government needs to focus on lives on one hand and livelihood on the other and that too when its income is crippled.  But, I thought that the team managing the economy in this government weathered the Covid storm very well and managed to tide over the crisis very well, under the circumstances.

In the midst of the pandemic last year and perhaps even now, top economists of the likes of Dr. Abhijit Banerjee, Dr. Raghuram Rajan and Dr. Kaushik Basu have been of the opinion that the Central government should not worry about fiscal deficit, agency ratings and all. Among other things like increased spending on health, they maintained that it should just do cash transfers through DBT mode to the needy. However, the government took a more cautious and calibrated approach of support by providing free ration to the needy, extending loan support to businesses etc. instead of cash transfers.  This has been a clash of ideas between the economists in the government and economists commentating from outside.  Frankly, I felt that what our government did is a better approach for a country like India.

Unlike the West, in India, people are more conservative financially. So, when a person gets free cash during a pandemic his first instincts will be to save it for spending on essential goods rather than on non-essential stuff to boost demand. Secondly, thanks to the lock down, there were supply restrictions. It is not logical that people will spend money just because they have been provided with cash support. So, the Government’s calibrated approach of providing free rations to the needy serves the purpose of protecting livelihoods during the pandemic. The salaried upper middle class and above were anyway not so affected as they were getting the salaries and even they spent only on essential stuff basically due to lockdown restrictions. So, the argument that Direct cash transfer would have boosted demand in the times of a pandemic doesn’t seem logical at all.  If not all, a few economists like Swaminathan Aiyar finally admitted that this approach worked better for India.

It is in this context of understanding the thought process of this government on handling economic issues during the pandemic that I bumped on this video. In this speech, Sanjeev Sanyal, Economist and Principal Adviser in the Ministry of Finance, articulates brilliantly the approach of the government in managing the pandemic from an economic stand point. If you haven’t watched it, please do so.  It answers quite a few questions which are routinely thrown at this government at the way it has been responding to the pandemic.  Its clear from the speech that there is a “method” in the thinking of the government while there is “madness” in the newsrooms that feed us information.  I wish that the government articulates the thinking behind their decisions more regularly for the benefit of all.

Now if you see the last few months, it is clear that the government is dead serious in reviving the economic growth. Some of the decisions since March have been bold and commendable. The rolling back finally of the retrospective taxation is one.  The Asset Monetisation program is another.  Taking a call to relieve the stress on the balance sheets of the banks by forming a “Bad Bank” is also another one.  Again, addressing sector specific long pending issues like in Telecom is yet another.  So, there has been a slew of bold decisions recently that gives a hope that in this term, with the pandemic hopefully behind us, the Modi Sarkar is pushing aggressively on its economic agenda.

As an economy, I believe we are at an interesting and crucial point. The pandemic is ebbing (or so we believe). Vaccination is progressing at a rapid pace. Economic activity is getting back to normal. These should bring the economy soon to pre-Covid levels. Now, if the bold reforms that have been unleashed this year has the desired effect, the growth only can be higher from here. For the Modi Sarkar which is finally catching up on the economic agenda, it will be a lasting legacy to demonstrate a higher average economic growth than the Singh era. And for the IT cell of the ruling party, few memes less to counter!

Debate around the Growth of the Indian Economy!

Few weeks ago, the GDP numbers for the 1st quarter of this fiscal year for India were published. As per that, the Indian economy grew by 20.1%. In the following days, there were columns, Op-Eds and Social media commentary on whether it was a good quarter or not. Since “Neutral media” is an Oxymoron, depending upon the leanings of the media, the economic performance was either branded “historic” or “pathetic”. There are no surprises here and we have now learnt to live with the media spin on all issues.

Along with the media, the tribe of “Neutral Economists” is also on the wane.  Depending upon their political affiliation, the first quarter performance was touted to be “record breaking/highest ever” or “worst/shocking” in decades by reputed economists.  Therefore for an Aam Admi, it is difficult to judge what actually the situation is. And the truth as in many situations may be somewhere in between.

I am no economist but as an ardent follower of the Indian economy, I tried to make sense of the numbers and the trends thereof and this is what I find. I would like to hear the opinion of the readers as well on my hypothesis.

In isolation, a GDP growth of 20.1% is of course very good. But, we should not forget that this is at the back of a low base of -24.4% same Quarter last year. In that sense, some of the commentary from pro Government circles that this growth is massive and is earth shattering etc. is immature.  At the same time, commentary from the opposition side comparing this with GDP rate pre-Covid and claiming that actually it is lower than what it was two years ago is equally immature. And this is why.

First, the reality is, on a trend line after a massive negative growth of 24.4% in Q1 last year and growing marginally by 1.6% in Q4, a growth of 20.1 in Q1 this year shows that the economy is indeed recovering and the recovery is V-shaped to be precise. This is certainly to be happy about.

Second, we must keep in mind that during Q1 this year, we got caught by a massive second wave which again put several curbs on the functioning of the economy, which was as such firing at much lower levels than before. So, among the eight buckets which contribute to the GDP namely Manufacturing, Construction, Agriculture/forestry & fishing, Mining & Quarrying, Electricity/Gas/ Water & other utilities, Trade/Hotels/Travel & Communication, Finance & Real Estate and Public administration, Defence & other services, it is obvious that a couple of engines are not firing at all. It is therefore natural that when you compare with the pre-Covid situation, the GDP in absolute numbers will be lower. This however does not take away the fact that with the easing of restrictions, the economy is obviously recovering.

Third, let us take a look at the monthly GST collection numbers for the past couple of years.  The average monthly GST collection figure in 2018-19 was Rs. 98,114 Cr. and the average in the 1st four months of 2021-22 is Rs.113,333 Cr. 2018-19 was pre-Covid, normal times and these four months are right in the midst of Covid. And compared to Rs. 101,818 Cr. monthly average last year. So just a cursory glance shows that the economy is on the mend clearly this year.

Here, I would like to dwell into a larger point and thereafter a question.

I would presume that GST collections represent transactional activity in the economy with respect to both goods and services. We are all aware that post the pandemic all “Contact” based sectors have been severely affected. This includes the likes of Travel, hospitality, Wining and Dining (all these for business and pleasure), impulse shopping, recreation and entertainment of all sorts and other human touch related services (salons, spas…). While the Software industry per se has not got affected due to Covid with “Work from Home” filling in well, the ecosystem around it has been significantly disrupted. This includes transportation, catering, real estate, utilities, other discretionary spending and stuff.

As common public, our shopping is mostly restricted to what is required. We travel only when it is utmost required.  The “Festival economy” which is big in India has been crippled since last April.  So my question is, when transactions around goods and services have been curtailed, how is it that the monthly GST collections have shown a growth over 2018-19? (Pre-pandemic period)

There are can be two inferences from this trend:

First, if the monthly GST collection is showing such a robust 15% growth (over 2018-19) even during the pandemic times, once we are done with the pandemic and when all the cylinders start firing, we are looking at an exponential growth in monthly GST collection figures. (Even adjusting for inflation)

Second take away is, either with whatever limited avenues left to us, we are consuming much more than average or there is a significant shift towards formalisation of the economy. I would like to believe in the latter. I don’t think we are consuming more than what is required. However, certainly our purchasing patterns have changed. Due to the pandemic imposed curbs, it is possible that our dependence on the neighbourhood mom and pop stores have come down and we have got used to the convenience of door delivery for everything.

As a personal example, pre-Covid, we used to buy vegetables and fruits from our neighbourhood bhaiya. Once lock down struck, this shifted to a vegetable vendor who was arranged by our apartment complex for door delivery. Here, payment was through G-pay/PayTm etc. Now in the past few weeks, the same vendor is now part of an E-Commerce aggregator called Bhajiwala.com! Bhajiwala.com, I am sure is within the ambit of GST and hence clearly part of the formal economy! My view therefore is, the benefits of GST implementation which we were all looking forward to is beginning to accrue and will be more visible when we are out of the pandemic.

It was widely believed that once GST is implemented, it will add 1-2% to the annual GDP. I now believe that once the pandemic is over and when economy starts firing in all cylinders like before, the bump due to GST could be in excess of 2% because of the increased formalisation of the economy is the last 2/3 years. This I am talking about even after the pent up demand effect.  That should put the naysayers of the GST to rest.

Though we cannot take the stock markets as a real indicator of the state of the economy thanks to its fickle and speculative nature, probably the markets are seeing into the future as above which others are not.  Which is why the markets have been on fire since the last few months even in the midst of the pandemic.

In conclusion, I would like to say that yes, the high growth in Q1 is due to the low base effect.  Yet, it is a significant milestone and pointer towards a robust economic recovery. It is certainly one to be cheered upon if not celebrated upon as yet.  Acche Din are around the corner!

Pic Courtesy: The Economic Times

Olympics and Sports as a great Unifier!

The Tokyo Olympics 2020 which got delayed by a year due to Covid, finally got over today. The Indian effort at the Olympics culminated in a flourish with Neeraj Chopra winning the Gold in Javelin throw. All these years, after every Olympics, the commentary has been about how a country of 1.3 billon cannot win even one Gold.  Or for that matter how small countries like Kenya and Spain can win more medals than India. This time, we will be spared of the usual diatribe or so I hope. For, we won a Gold that too in a track and field event for the 1st time. With a total tally of seven medals that included two Silvers and four bronzes, this is our best outing in an Olympics. Not just that, we missed a handful of bronzes by a whisker.

At a time when the whole country has been going through a challenging phase for more than one year tackling Covid and its spiralling after effects, the encouraging performance of our contingent at the Tokyo games came as a whiff of fresh air. We almost forgot to track the everyday Covid statistics of daily new infections, number of deaths and the R-Factor etc.  The media as well, which is what steers our attention usually on a day to day basis, gave more coverage to the games rather than the usual stories.  For a change, WhatsApp groups were buzzing with forwards related to the lives of the winners at the Olympics. And for once a Javelin throw was being watched by many Indians when a Test match was going on in parallel!

I have not seen this kind of frenzy for following Olympics as we saw this time, ever before. This kind of excitement and passion is usually reserved for Cricket in India. With Cricket of course, the craze and following have been for a long while.  For instance, an Indo-Pak Cricket encounter at any level can bring India to a grinding halt. Cutting across geographies, religion, caste, creed, language, gender and social strata, a World Cup Cricket match and that too if between India and Pakistan unifies India like no other.

What we have seen in the last few days with Olympics has shown that the Indian passion for Cricket need not be exclusive. People’s passion will follow wherever we win or succeed. For long, it has been ingrained in our minds that “Jo Jeeta Wohi Sikandar”. But the other part is the question of National Pride. The number of times the clip of Neeraj Chopra on the podium with the National Anthem being played in the background, got shared on Social Media since yesterday is a testimony to this.

The general commentary or narrative has been that we Indians only support or cheer Cricket and that is the cause for other sports not flourishing. While this could be true, it is only partly true if at all. I am of the opinion that as Aam Admi, what we chase is not Cricket, but National Pride. For a long time that National Pride has been bestowed upon us by our repeated success in Cricket. So, we became a Cricket crazy country.

Make no mistake. If our Indian Hockey takes off from what we have achieved at the Tokyo Olympics, fan following, attention and of course money will chase Indian Hockey too. Same is the case with other sports as well.  Well, defending India’s craze for Cricket versus other sports is not the purpose of this blog. But trying to articulate that any sport or for that matter any event that arouses National Pride can be a great Unifier in a diverse country like India, is.

That is why I find questions often raised on why India should spend its money and resources on the Chandrayaan and Mangalyaan missions while millions languish in poverty, to be ill founded. We have seen how landing its men on the moon first successfully with the Apollo mission tilted the scales of National pride in the US during the Cold war period.

Similarly, I saw some questions being raised as to why Orissa state should spend its money on sponsoring the Indian Hockey Team instead of focussing on its own state’s players. If by spending that money, Orissa has enabled the revival of India’s fortunes on the world stage as how we saw in the Olympics, it is certainly worth it.  The National Pride that got aroused thanks to the performances of the men’s and women’s Hockey at the Olympics is priceless. For everything else there could be a MasterCard. And Naveen Patnaik the shrewd politician he is, has understood this well and took a call to back the Indian Hockey teams when no one else did.

As I had written in my 2016 piece post Rio Olympics (Read here), availability of financial resources is a key factor in winning more medals.  So, with the backing of sponsors, talented sportsmen can get access to the best – whether it is coaching staff or equipment or infrastructure. We have seen this in the flourishing of a Neeraj or a Sindhu or a Saina! What Orissa has done or a few other brands have done is an eye opener for many including other States, Centre and Corporations to pick up a sport or sportsmen and back them to the hilt. The returns on this investment by way of National Pride and the associated brand recall is beyond comprehension in a spreadsheet.

And no one else understands the power of National Pride than Narendra Modi. Each and every phone call he makes to a winner is because of this understanding, the after effect of it, we will see in 2024.

Postscript: The next Olympics is in 2024 😃😃

30 Years of “1991”!

As I was wondering what to write on this week, I realised that in a few days, half of this year 2021 will be over.  Back in January, everyone thought or rather hoped that we were all done with the “New normal” and soon one will get back to the “Old Normal” in more ways than one. Till March, we were coasting on towards that. Then came the dreaded 2nd wave leaving us literally gasping for breath. And in no time we are back to hoping to see the end of this year.  Just the feeling we had the same time, last year.

And probably 30 years ago in the year 1991.  If 2021 has been a tough year for those who are running the country, I reckon 1991 would also have been so and for a variety of reasons.  When the history of post independent India is written, the year 1991 would feature prominently. Today, the year is associated with the unleashing of economic reforms and liberalisation in India and being crowned as the ‘Year that changed India”. But it has got so many other associations to it, which is what I thought I will write about, when we are in the midst of “30 Years of 1991”!

As 1991 dawned, I was in my 2nd year of MBA course in Bombay. Just as the year commenced, we were witness to the 1st televised war in the Gulf when US attacked Iraq to liberate Kuwait in “Operation Desert Storm”. In India, cable TV was still in its infancy. But we could watch some visuals of the war in “The World This Week” programme which made New Delhi Television (NDTV now) and Dr. Prannoy Roy household names in English speaking households in India.  I must add here that those days as young students we had tremendous appetite for news and current affairs which is seemingly missing in the current generation. Oh yes, that law of diminishing marginal utility! When News is a plenty all around, it finds lesser and lesser interest.

And it was during this war in 1991, that India probably removed its veil of Non Alignment, when the then government under Prime Minister Chandra Shekhar allowed re-fuelling of US Aircrafts in India. The decision had to be soon reversed under immense political pressure eventually in particular from the Rajiv Gandhi led Congress which was supporting the Chandra Shekhar government from outside. Though the war happened in the Gulf, it had its own implications for India as a country. Oil prices sky rocketed pushing the imports bill to hit the roof and plunging the economy into a deeper crisis. And we had a humanitarian crisis to deal with as the Gulf was home to millions of Indians.

In May, I was back in Madras after completion of the course and preparing to return to Bombay after a short break. On the 21st May, 1991, Rajiv Gandhi was assassinated in Sriperumpudur near Madras by a suicide bomber at an election rally. The death of Rajiv Gandhi that too in that most tragic manner shook the nation. Rajiv Gandhi was all set to return as the Prime Minister with the Congress getting a comfortable lead. But his untimely death put the country again in chaos and when the results came, Congress became the single largest party but short of majority on its own.

It is difficult to speculate as to what would have happened to our country had Rajiv not been killed and had he returned as the Prime Minister. It was widely believed that having learnt his lessons from his first stint, Rajiv was a wiser man and with his youth, energy and impatience would have changed the course of the country for the better.

With the loss of Rajiv, P.V.Narasimha Rao became the Prime Minister heading a Congress led coalition government. He made Dr. Manmohan Singh his finance minister and between them unleashed a slew of economic reforms that liberalised India. Those were eventful days and day after day, headline grabbing announcements followed.  Dramatic devaluation of the rupee, pledging of the country’s Gold reserves, announcement of the New Trade policy, announcement of the New Industrial policy that would end the licence-permit Raj,  the historic Budget presentation and so on. When all these were happening, one didn’t realise that these will forever change the destiny of India.

Unlike now, when economists and policy experts are in unison singing the praise of the 1991 reforms, back then the reforms were always projected as “Acts in Duress”.  Even among the ruling Congress, there was no consensus on the reforms forcing Dr. Singh to make that famous quote that he walked around with his resignation letter in his pocket.

Elsewhere in the same year, the dissolution of the Great Soviet Union was in rapid progress and by December the entire Soviet Union was formally dissolved that eventually ended the Cold War.  Google also tells me that the World Wide Web was launched to the public in 1991 and Microsoft.com went online, though I have no recollection of these!

Coming back to India, not to be limited to financial problems, in the same year 1991, on June 28th, Kashmiri militants kidnapped the then Executive Director of IOC, Mr. Doraiswamy. He was finally released after a couple of months in exchange of a few militants. I remember this vividly as day after day front page in the newspapers were occupied with this news.

For India, not just 1991 but the next two years were indeed full of challenges that wrecked the country pushing it from one crisis to another.  So, looking back, as a country we came out of all that relatively unscathed as we kept growing to what we are today, though the pace and extent of growth may not be our liking.

30 years hence, in 2021, as a country we have been inflicted hard by a global pandemic that has been hogging everyone’s attention. Our economy has been bruised badly. Lives have been lost and still counting.  Clearly not just India, but globally we have been set back by couple of years if not more.

As we come out of the 2nd wave, a recovery is imminent but not without the potential danger of further waves. We can only hope that this time also we will follow the 1991 cycle.  If you remember, the economy fared poorly in the 1st year of the reform (1991-92) but from 1993-94 after two years, the economy was on a roll.

Going back to 1991, personally for me that was the year when I started my professional career and so along with the country, the year has a personal significance and it will be always etched in my memory.  Where were you in 1991 and what are your memories of that year? Do share in the comments section.

2021 State Elections – My Flash Take aways!

This round of elections in five states is finally over today and India will get a break from being in election mode for a year.  It’s been too long an election process that, everything else took a back seat including our war on Covid.  The counting is still on as I write this but the broad trends are clear. Since there are pundits galore in theorising on the results, I will skip that for the moment. Instead, in this post, I would like to list a few take aways on the whole elections, not just the results of this round of elections.

Here we go:

  • Anti-Incumbency as the pièce de résistance among theories for explaining a result is passé: In the past, analysts would always just dismiss any defeat of an incumbent government by ascribing to “Anti-Incumbency” as if it was extremely legitimate and acceptable. A few decades ago, it is true that incumbent governments were thrown out 7 out of 10 times. But, that’s no more the case. As we have seen in this round, 3 out of 5 governments have been re-elected. In Bengal, TMC has won a third consecutive term. It all boils down to quality of governance and what people feel about the next best option.  Anti-Incumbency is no more an excuse. And Pro-Incumbency is a virtue.
  • Hawa, Leher, Mahoul exist only in the minds of commentators: This is increasingly becoming the case in social media driven journalism. As we saw in UP in 2017, Karnataka in 2018 and now Bengal this time, mainstream media and social media can create their own “Waves” and “Hawa” that is far away from situation on the ground. So, making predictions and conclusions based on social media trends, Youtubers’ narratives and mainstream media commentary is fraught with a lot of risks.
  • Opinion Polls and Exit Polls are for entertainment only: This we have seen time and again now and doesn’t need much explanation. For almost all agencies, getting the polls right has a huge amount of luck riding on it. If they get it right, it’s their day. That’s all. In a diversified country like ours, statistical samples however scientific they are, have proven to be inconclusive. So, opinion polls and exit polls are a lottery. Even in this round, no agency predicted the scale of Mamata win and almost all predicted a tough fight.
  • Voters vote for Lok Sabha and State polls on their own merits: This is getting very conclusive by every election. In one of my earlier articles for Newslaundry (Read here), I had explained this with quite a few examples. In this round as well, we can see this aspect quite established in Bengal and Kerala.
  • Time for building consensus around One Nation – One Poll: This is linked to my last point as well. Now that we can see clearly that voters are indeed intelligent and vote as per merit in Lok Sabha and state elections, many of the regional parties and even the Congress which have their apprehensions that it will be only “Advantage BJP” if India opts for simultaneous elections, should shed the same and have a re-think for the sake of larger national interest. It is obvious that elections every year or twice a year are a huge distraction for governance. Also it is a drag on the resources for any government. Both the government and the parties can save a lot of money and time if we have simultaneous elections. Of course, it is not as easy as it sounds, but there should be a national debate on the same and a consensus built around this so that at least in the next 10 years we can move in this direction. My personal opinion is, if not simultaneous polls, at least we should move towards “One Nation, Two polls” by having Lok Sabha Polls once and all State polls together after 2.5 years.
  • Limit the number of phases to 3 or 4 for any state: I don’t think there is any country in the world that conducts its elections over two months in eight long phases. The phase wise polling was conceived by T.N.Seshan when he was the Chief Election Commission mainly to counter violence and election related mal practices so that the EC can muster central forces and conduct free and fair polls. But those were the days of ballot papers where the chances of rigging were higher. Also in today’s times of EVMs and of course prevalence of Smart technology, ways and means need to be found for conducting free and fair elections in 3 or 4 phases in any state and eventually one phase.
  • Limit for expenses in an election is a joke: It is high time, the limits are re-visited. Also new limits need be prescribed for self, party and total expenses. It wll be good to take a look at best practices in other democratic countries on this and come up with a model for future.
  • Huge market opens up for political strategists and IPAC type organisations: This is not a new take away based on today’s results. But today’s results cement this proposition beyond doubt. It is no longer enough for parties to depend on their loyal karyakartas to carry our ground work. Parties need strategists and organisations to hold a mirror to them and carry out smart work in the field using data, analytics, technology and tools. It is not that an external strategist or marketing can save a bad product. But even a good product in today’s competitive times need adequate marketing cover. And therefore, the market for political strategists and political consulting companies in India has expanded. So it is as a career for youngsters in election management and related marketing. And Marketing works.
  • Last but not the least, EVMs are not instruments in the hands of those in power: I hope the debate around EVMs is put to rest conclusively now that opposition has also won spectacularly.

As you can see half of the points are related to the way elections are being conducted in India. After a round of reforms which Seshan initiated during his tenure, we have not seen much of electoral reforms. It is now time for the country to build consensus around electoral reforms and introduce them to keep our status as a vibrant democracy.

Image Courtesy: Firstpost.

Covid – Contending with the Waves of Uncertainty!

If at all there has been one thing which is consistent with Covid, it is its remarkable inconsistency.  From the time Covid entered our collective lexicon in February last year, every theory or conclusion related to its behaviour has been found to be inconsistent or invalid very soon after.  Like India was never affected by Bird flu or SARS virus, so we will not be affected by Corona virus (See the situation today). India is a hot country and in peak summers, Virus cannot survive (It did hit us through the last summer). India will be spared as we have better immunity for many diseases (Of course India was not spared).  During monsoons in places like Mumbai, Covid is going to create a havoc (There was no specific spike during monsoons).  Masks are required only if you have symptoms but hand washing and sanitising are most important to prevent the spread (Today, it seems it is the other way – Masks are most important and hand washing is not that important).  Once vaccines are found, that will be the end game for Covid (Vaccines were indeed found but the end game is still not in sight).  Once you take the two doses, you are safe (Now the latest theory is, we may have to take vaccines every year!). This was just to list a few theories on Covid which have got negated along the way.

We must keep this in perspective when we make our judgement on the way the municipal administration or State governments or the Central government or the Prime Minister have handled what is now called as the 2nd wave in India. Let us all be honest. Since the dawn of this New Year, all of us have in some way or other started moving towards leading a normal, pre-Covid life. We started – travelling out of our cities, taking vacation breaks, working from Office, wining and dining out, going to places of worship, having social get togethers, planning for house functions and getting domestic helps back in our houses, to mention a few normal/pre-Covid activities.

All of us were keen to put Covid behind us and lead a normal life. We all understand that it is important for economy to get back to normal which can only happen if consumption in all spheres get back to normal. We were all happy when GST figures reached pre-Covid levels and were delighted when it started exceeding pre-Covid numbers. All this when we also got the news that vaccines were available and we could see some light at the end of the Covid tunnel. We all celebrated and rejoiced about how India came out unscathed on Covid.

What we did at individual levels, companies did at their level as well with respect to businesses. And similarly the administration and Government did at their levels. In this period, we must not forget that farmer protests which in normal Covid times could be super spreader events were going on in most parts of North India. Yet, we didn’t see any spike in Punjab or Delhi or other states where farmers in large numbers were protesting taking limited or no Covid precautions. A full test match was held in Chennai with spectators watching it and there was no spike after that. Looking at these I guess, the Election Commission went ahead with the conduct of the polls in the five states in March and April. Ditto for the Uttarakhand government for the Khumb festival.  We all lowered our guard. Not just the government.

Today, however in India, we have been savaged by a Covid Tsunami. So, what we see all around are depressing news about deaths, sufferings and other collateral issues, all related to Covid. We have been hit by a lethal second wave which none of us saw it coming. This is where the first failure of the epidemiologists, experts and relevant authorities in the administration come into picture. All the while in the 1st Quarter of this year, I only saw experts explaining how India has flattened the curve and how we were moving towards herd immunity.  So, when other countries like the UK, USA and a few European countries were hit by a second wave, why was there no alert from the experts of a potential second wave in India?

In the mid of March, we could see suddenly numbers rising in states like Maharashtra and Kerala without any specific trigger like a super spreader event. When at that time, a few were enquiring with me on what’s happening in Mumbai, I mentioned that it is only a question of time the numbers start going up in other cities/states. And that’s what happened. So, when a person like me without looking at any regression models or analysis could predict that we are up to an imminent spike in numbers, how come the state governments and Central government did not realise that we are walking into a sudden burst if precautions are not put in place immediately.

Even in the 3rd week of March, if the Election Commission had announced strict regulations on campaigning or Khumb was made symbolic as it was done eventually, things would have been different. Or if all states including Maharashtra started what it is doing today in terms of restricting movements, we could have avoided the crisis. This is the second issue.

As some wise man said, “Before, you are wise. After, you are wise. In between, you are otherwise!” In hindsight everyone is God. Anyway, today lock downs have been put in place and I am sure, the numbers will start coming down in the next 4 weeks. Already the numbers in Mumbai are showing a declining trend day by day. But, once we reach a trough, again it will be time for “Unlock 2.0”. When that happens, we may once again at some point of time witness a third wave, unless by that time we have vaccinated a reasonable mass of people.

It is clear therefore that the key to prevent further waves, is vaccination. Or so we hope at this point in time, unless even this theory gets demolished. It is now apparent that the vaccination roll out has been patchy.  Just six weeks into opening up of the vaccination program to public, we have a shortage of both the vaccines.  And I am not joining the chorus of why India exported vaccines when we should have used it for Indians first. The external affairs minister has articulated recently that if we do not support other countries, we cannot expect support from other countries for supply of raw materials. This could be the official line. But the main reason why the government also decided on exports initially was the shelf life, in my opinion. The government cannot give this reason out for obvious reasons.

The shelf life of Covishield is six months from the date of production. As per Serum institute, by the end of December, it had already produced about 50 million doses of the vaccine. I must add here that it had started producing and piling up inventory even before the official approvals. Since the vaccination roll out in India was planned to be in phases starting first with the health and frontline workers for obvious reasons, the stock would not have been consumed before the expiry. Hence, exports meant to serve triple purposes as per me. Consumption before expiry, generation of good will with Vax diplomacy and fulfilment of commercial and licence related contracts for Serum.

A committee under Niti Aayog has been entrusted with the roll out of the vaccination program and it appears that the whole plan was based on “let’s cross the bridge when we get there”. How else can we explain the fact that the Central government had not secured supplies for the vaccine from the two approved sources at least to cover 60% of the adult population right at the beginning? Why is it that the companies were not committed working capital support right at the contract signing stage? If there was a clear plan of sharing of responsibility between Centre and states, it was never made transparent. And today we see that the whole vaccination has been opened up but without ensuring supply. From vaccine hesitancy, it is now a rush for vaccine. It is going to take at least till June for stabilisation of supplies. To me, more than not anticipating the second wave or being lax on taking actions after witnessing the second wave, the ill preparedness of the government on the vaccination roll out is the main issue.

While it is now clear that we as a country have landed our foot into a second wave land mine, the last thing we should see is politicking over this and the never ending blame game between the Centre and states. It is high time that the Centre and states work together in diffusing the crisis rather than pointing fingers on who is wrong at this stage. This is a collective failure of all of us, the society, the administration, the domain experts, the State and the Central government.  As common public we must now learn to be cautious throughout even if we have taken the vaccine, control our instincts to get back to normal lives soon and learn to deal with what could be waves of uncertainty in the coming months.

Having said that, in terms of accountability, the buck of course stops at the top, which is the Prime Minister. He must now quickly move towards establishing a separate ministry for Covid and have a competent minister and set of bureaucrats to man the same.  This ministry should be tasked with all activities related to Covid as an umbrella entity. Being pro-active should be the core mantra for this entity.  It should be acting on a WAAR footing – Watch – Anticipate – Act – Repeat.

As we have seen, unless we get out of Covid quickly, lives and livelihoods will be under jeopardy – caught in the ensuing waves of uncertainty.

Pic Courtesy: India Today

Tamil Nadu Elections – A Battle of Known Unknowns!

In this week’s blog post, I continue my focus on Tamil Nadu state elections which is turning out to be a fascinating battle as the polling date comes closer. West Bengal elections and the results therein may be interesting for the commentariat for the sheer noise value around it because of the time and efforts being invested by BJP and Modi-Shah combine. But, I do feel that West Bengal is a simple and straight contest between TMC and BJP and the unknown in terms of result is only the margin of victory for the TMC and the extent of rise of the BJP in West Bengal.  In Tamil Nadu though, as it stands now, even with just few weeks for the poll date, the water is still muddy.

The reason for the same is there are many known unknowns in these elections that could impact the results in either way. What are those?

  1. Anti-Incumbency: Is there an Anti-Incumbency? The answer it seems depends on to whom the question is posed.  For a DMK supporter, there is an obvious anti-incumbency wave against the present EPS-OPS government. However for an ADMK supporter, there isn’t. There is a version which says even if it is, it is not strong enough to swing votes away from the ADMK. And finally there is one which says that few months ago there was but now there isn’t.
  1. Consolidation of Hindu vote: Will there be a consolidation of the Hindu vote in favour of the ADMK/BJP front? This is the first election in TN where BJP is making a serious attempt to make its presence felt. And it has been at it systematically in the last few months. In social media, there are orchestrated campaigns by BJP to make the Hindu vote count by appealing to the Hindu voters to reject the DMK based on its leaders’ past public utterances against Hindus and Hindu Gods. Yet, it is unclear if the campaign will lead to a consolidation of the Hindu vote and help the ADMK front.
  1. Kamal Haasan effect: Is Kamal Haasan’s party the Makkal Needhi Maiam going to split the ADMK votes or the DMK votes? It is clear that Kamal Haasan and his party are creating a buzz in the air this time. Targeted at those who are fed up with the Kazhagams in general, it is aiming to be an AAP in Tamil Nadu by being a third alternative. But it is obvious that it has not penetrated enough to form a government on its own and will lend support to one of the fronts in a post poll scenario. While the earnestness and honest image of Kamal are not questionable his personal ideology is. As an atheist and a non-believer, he is seen closer to the DMK ideology. At the same time, by calling himself as MGR’s ‘vaarisu’ he tries to appeal to the MGR’s supporters and legacy in the ADMK. It is also said that the youth are more drawn to Kamal. So, which section is he going to impress? Is he going to cut into DMK’s share or ADMK’s share or a bit of both? It is unclear.
  1. Freebies: In the battle of freebies and cash for votes, which side is showing more “catching” power? Tamil Nadu which usually has a paucity of rains, in election season shows a huge propensity for downpours. This season also, it is raining freebies from all sides. Whether the underprivileged and deprived class cast their vote depending upon the freebies being provided is a question which is unanswered. And there is also the phenomenon of distribution of cash to turn up to vote. Can the distributed cash provided an “aadhaar” proof of vote cast is a big question.
  1. Battle of narratives: On the one side from the DMK front, the narrative built is of a threat perception. Of Tamil Nadu succumbing to the Centre or BJP if the ADMK front is voted to power. On the other side from the ADMK front, it is the threat of handing over TN to one family which has always benefitted whenever it ruled. Between these two narratives – the first pegged around identity politics and weak leadership and the second around nepotism and corruption, which has more potential to gain ground?
  1. Leadership question: The last is the leadership question. This is the full first state election in Tamil Nadu without strong and charismatic leaders in both sides. Between Stalin and Palaniswami, is there a voter preference based on their leadership skills? Or is leadership an issue at all in this election?

All these known unknowns make the upcoming Tamil Nadu elections a tough one to call and a fascinating one for any political observer.  But one thing is clear. The stakes for not losing are quite high for all the main contenders except one. And you know which that one is. And that is a known known.

Graphic courtesy:  The Hindu Business line

Tamil Nadu Elections – in “Poll” position!

The country is once again in election mode with the announcement of elections for a bunch of states. Among all the five states that go to polls this season that includes Assam, Kerala, Puducherry, Tamil Nadu and West Bengal, obviously it is West Bengal that is grabbing national attention and creating more surround sound because of the tug of war between Mamata Banerjee’ TMC and BJP’s Ex-TMC. Just few days into the campaign, we are already seeing how this script is panning out.  But to me, the most interesting and fascinating election to watch in this lot is Tamil Nadu, for the far reaching impact the result may leave on the players who are going to lose.

It’s been oft repeated by commentators that this election is the first full-fledged state elections that is happening without the leading lights of the respective kazhagams, namely Jayalalithaa and Karunanidhi. While this is true, beyond this there are other aspects which make this election very crucial and a “must win” for almost all the key players involved. A loss here may bring up “The End” card for the top contenders in this state where politics and cinema have been clearly intertwined.

For the ruling ADMK, a loss will lead the party into an existential crisis. The present sort of elastic dual leadership structure of EPS-OPS combine is certain to give way in case of an ADMK defeat.  As of now, the only glue that is holding the party together is “power”. Sans that, it is a question of time before the carefully built edifice starts breaking. It will also bring the debate back on Jayalalithaa’s legacy and so on but without much headway. In the absence of any other promising leader in the horizon, it is imminent that the “two leaves” will eventually wilt!

For the DMK, it is another existential crisis. Not probably for the party. But for the Karunanidhi family leadership. The party has been now in the opposition for ten years. In 2016, it was in a striking distance to power but lost out to Jayalalithaa in the final count. In the 2019 Lok Sabha polls, the party managed to sweep the state bucking the national trend but it couldn’t leverage on this win in any way as it was in the wrong coalition. So, a win in this election is crucial for the party to re-energise the cadre and its leaders for whom getting back to power is important for many reasons. Also a win is crucial for its leader M.K.Stalin to cement his position within the party as its undisputed leader. Any loss will trigger another round of succession battles with many other family members staking a claim on the party’s leadership. Though Stalin has been leading from the front, the general impression is that he cannot come even close to his father Karunanidhi in terms of political acumen. A loss will further accentuate this impression.  A loss to DMK will also trigger a wave of cross overs to ADMK or for that matter even BJP before the next Lok Sabha polls as that could secure a career for many upcoming leaders who lost out in this election. The family tree may end up collapsing in case of a DMK loss!

The third regional contender awaiting to make an impact in this election is Kamal Haasan’s Makkal Needhi Maiam (MNM). I don’t think anybody is expecting MNM to win on its own in this elections. But in his own admission, Kamal is looking at reaching double digits both in terms of vote share and seats. If it doesn’t happen and MNM manages only a vote share of less than 5% as before and few seats here and there, it could be curtains down on Kamal’s future plans for the state in politics. If a party, even a small one like MNM, cannot be of any material influence in a coalition, then it becomes very difficult to sustain and survive. Kamal could very well junk his political journey and resume his cinema career where is future is more secure. From torch light it will be back to arc lights at the sets!

Also, it is my hypothesis that if Kamal’s MNM fails to make any significant impact in this election, it will be curtains down for “Stars” trying a serious hand in politics in Tamil Nadu in future.

Now coming to the key national players – first the Congress. Any loss to the DMK front would mean further erosion of Congress’ political capital whatever is left of that is, in the state.  Not just that, it will further amplify the noise within the party around the Gandhi family leadership in general and Rahul Gandhi in particular. Within the state though, it may just continue in its present hibernation mode and more wrangling of the “Hand” in future.

For BJP, in this elections the stakes are still low, I believe. Whatever it is doing today in terms of focusing on the state is more with keeping 2024 Lok Sabha elections in sight. The party would like to bag up to ten seats in 2024 from Tamil Nadu, which will help in a big way to fill gaps from other states where it did well in 2019. . A loss to the ADMK front would force BJP to start accelerating its growth program in Tamil Nadu significantly on its own. This would obviously mean developing a credible state leadership. I believe for BJP, this election is a trial balloon to test ADMK’s strength in the post Jayalalithaa era, check out the acumen of its freshly minted local leadership and finally to chart its direction in Tamil Nadu. A win for the alliance though will help the party secure 10+ MPS in the 2024 elections and also increase its foot print in the state where it has been slow to grow. For BJP, this election is still like water on the Lotus leaf!

With so much in stake for all the key contenders, the TN election promises to be a very fascinating contest– one that eclipses even the West Bengal battle. And for sure, it is going to be a close fight with winning margins being thin in many seats and the final tally being very close. Even in the past, pollsters had a tough time calling TN elections. This time around, the task is more arduous.

Among all states in India, Tamil Nadu has had the privilege of being in the “pole” position with respect to many social and economic indicators. Now in this round of state elections, it is also in “poll’ position in terms of impact of the results. May 2nd though, could be curtains down for a few prime contenders!

Pic Courtesy: The News Minute

Budget -21, Reform push and Time to Market!

There have been budgets in the past which have sort of quickly moved away from the headlines. And there have been budgets which remained in the headlines but for all wrong reasons. This year’s budget, incidentally the 8th one from the Modi Sarkar presented by Nirmala Sitharaman has managed to hog the limelight for all the “right” reasons. The pun here is well intended.

Talking of the reaction to this government’s previous budgets, it’s always been muted and for obvious reasons. Ever since Narendra Modi became the Prime Minister way back in 2014 that too with a clear majority, the expectation has been that he will bite the bullet on many of the much needed, long pending reforms. Honestly, the previous budgets of the Modi Sarkar were mostly incremental budgets with some increased allocations here, some improved programs there and so on. “What’s the Big Idea”? ‘Where are the Big bang reforms?” were some questions hurled by the commentariat post every budget. It has been my observation that under Modi, the budgets have just become an annual statement of allocations and outlays while Big Ideas whether it was the Swachh Bharat Abhiyan or the Ujjwala Yojana et al were launched outside of the budget. But in this year’s budget, there has been a welcome change to announcing some “Big Ideas”.

The positive vibes around this year’s budget can be attributed to the announcement of few big ideas which have been reformist in nature, while keeping the budget free of any “bad news”. One is the announcement of the setting up of an Asset Reconstruction Company (ARC) which is a euphemism for a “Bad Bank”. Second, is the statement of intent on “privatisation” of two Public Sector Undertaking Banks and one General Insurance company. So far, governments have been taking umbrage under the term – Disinvestment without putting out the word “Privatisation” so openly.

Not just the budget, but the announcement has been followed up by speeches in the parliament and other forums by those who matter in the government, on the seriousness of the intent. In fact, as per news reports, Niti Aayog has recommended to cut the number of state owned Public Sector Undertakings (PSUs) to just 24 from over 300 that exist today. If this programme takes off, it will make Modi a reformist of “Thatcherian” proportions. If you recall, Margaret Thatcher way back in 1979, on assuming power systematically embarked on a reform program to revive the British economy. She deregulated markets, cut tax rates, removed exchange controls and consigned militant trade unions to oblivion. But, it is the privatisation of State owned corporations like British Steel, British Petroleum, British Telecom and British Airways that stays as her enduring legacy till today. So, what Thatcher achieved in the early 80’s in the United Kingdom is what Modi is embarking to do in India after forty years. That brings to the next point of this post which is the important piece of “Time to Market”.

In business, Time to Market is nothing but the time taken by a company to launch a product or a service from the date of firming up on an idea.  For companies, this is an important issue in new product introductions.  In businesses that are highly competitive or for that matter any business, you cannot afford to have a long Time to Market.  That would run the risk of your competitor getting ahead or consumer preferences changing that makes the idea less relevant or even redundant.  I believe that even in the matter of reforms for a government, a short Time to Market is critical. And as a country, our track record on that front is unenviable so far.

In the context of reform push, I believe there are three stages namely – Idea, Intent and Implementation. First, the idea is just floated in a budget speech or on important occasion/forum. Then the Intent is demonstrated when the idea is given a proper shape, laws are formulated if there is a need and resources are allocated.  Implementation is when finally the reform becomes a reality and is rolled out. So, in India if you see the history of Time to Market on important reforms, it doesn’t pose a pretty picture.

For example, take the case of a reform like Aadhaar. The idea and need for a unique citizens identity card was floated way back in 2001 by an Empanelled Group Of Ministers (EGOM) chaired by the then Home Minister L.K. Advani during the Vajpayee led NDA regime. It was only in 2009, when the intent was demonstrated by the UPA government led by Manmohan Singh with the announcement in the budget and then following it up with the set up if UIDAI (Unique Identification Authority of India) under the leadership of Nandan Nilekani. And finally, the first Aadhaar card was issued to a citizen in September 2010. So, from the idea to the launch it took a good 9 years. In the case of GST, from the time of the floating of the idea way back in 2000 to showing the intent in the budget in year 2005 to finally launching GST in India in 2017, it took seventeen years.

In the case of the policy of allowing 100% Foreign Direct Investment in retail however, from the stage of the Idea to Intent to Implementation, the landscape of retail has changed. India doesn’t still allow 100% FDI in multi brand retail. This was seen as an important reform in attracting FDI and employment generation a decade ago. But now with the advent of E-Commerce where 100% FDI is allowed in the marketplace model, 100% FDI in Multi-brand retail is no longer seen as a constraint. In other developing countries like Thailand foreign direct investment in retail gave a huge boost to the economy. But India missed that boom because of the dogma around FDI in multi brand retail which stretched the Time to Market on that reform.

Ergo my point is, if the reforms which have been announced in this budget have to make an impact, short Time to Market is critical. Having floated the Idea of a Bad Bank, it is important to follow up quickly with the formation of the ARC and eventually roll it out within this year itself so that the PSU banks can be freed of the stressed loans and they can get back to lending with more ease. Similarly, in the case of privatisation of PSU Banks, the idea has been floating for a while now. But this is the first time, the government has expressed its formal intent via the budget speech. The road to privatisation is not going to be easy at all with trade unions already gearing to pick up the gauntlet with the government. I though believe just as the mass VRS issue in PSUs like MTNL and BSNL etc. went through in spite of stiff resistance from trade unions, this time, the government may be able to pull it off with a few hiccups. Or so I hope.  Also, while the stock markets are on a high this year, the government can manage to get better valuations.

In the run up to the 2014 Lok Sabha elections, Modi repeatedly talked of “Less Government, More Governance” and “Government has no business to be in business” – thoughts which signalled a clear Rightward tilt on the economic philosophy front. However, till this budget speech, we didn’t see much of action towards withdrawing the government from running many businesses. This budget from that sense is critical in signalling the government’s intent towards moving away from running inconsequential businesses, which is a good sign. And, if the intent is translated into action in a reasonably short Time to Market, then it will be Narendra Modi’s lasting legacy in changing the economic course of this country.

Post Script: If Aandolanjivis are those who make a living out of protests, what about taxing them? And what would be the Time to Market for this idea? 😁

The Mandi Vs Modi battle!

As a country, I believe that we are cursed to contend with one distraction after another, which keep our governments busy. If it was the Anti-CAA protests which were grabbing the headlines during winter last year, it is the farmers’ protests against the Modi Sarkar’s farm bills this winter. And in between, we have the Covid and its numbers to be pre-occupied with, still.

In the last few weeks, ever since the farmer’s agitation picked up steam, there have been many op-ed pieces from erudite authors which have by and large spoken in favour of the farm bills. And they have said that this is the 1991 moment for Indian agriculture. And yet, the farmers associations have stood their ground against these reforms. Irony dies when we see articles with pictures now of farmer protests in the past demanding the same reforms!

The opposition has joined ranks with the protestors in trying to push back the Modi government on the farm bills. And it has been pointed to us that many of the opposition parties including the Congress, which is now siding with the farmers in opposing the farm bills, have been votaries of the same proposals in the past. It is clear now that since the opposition cannot take on the government on the floor of the house, its strategy is to take on the government on the streets.

While there have been many pieces exposing the double speak of the parties, I would recommend all to read just this one authored by Gautam Chikermane for the ORF – “An intellectual biography of India’s new farm laws”. Read here:

This piece chronicles the various studies and reports tabled by expert committees under different governments’ right from the year 2000 and invariably the recommendations are similar to the very reforms the present farm bills have brought in. It thereby exposes the intellectual hypocrisy of not just the politicians, which to a large extent we have learnt to live with, but of the commentariat which is not coming out and expressing its views in favour of the farm bills strongly, though it was in favour of the same before.

As you can see in the said article, there has been a rare consensus among economists and domain experts on the issue of reforming the APMC Act and Essential Commodities Act. Therefore, it is a pity that we are seeing such virulent, stubborn opposition to the reforms from one section of the farmers’ universe.

In the past five years, I have consistently observed that the commentariat in India keeps shifting goal posts as per its whims and fancies.  In the beginning of the 1st term of Modi, the narrative was “Where are the big bang reforms?” When the Modi government started bringing in reforms it became, “Where is the consensus in bringing these reforms? Where is the consultation?” When reforms are brought in after consultation and building a consensus as in the case of GST, the narrative is, “Where is the execution?” So, clearly we are seeing a pattern of opposition for the heck of it irrespective of the merits of the case.

In the case of farm bills too, there are those who have been saying that there has been no consultation. It is clear as broad day light in the article that, there have been consultations with stake holders for 20 years now! I believe that the government must reach out to many of these experts who were in favour of these bills during UPA regime and enlist them to express their support for the reforms they were batting for in the past. This could include people like Montek Singh Ahluwalia, M.S. Swaminathan and the likes. Here, it could take a leaf out of UPA-1 rule when Sanjaya Baru, the then Press advisor to Manmohan Singh, reached out to Brijesh Mishra enlisting his support for the nuclear deal when BJP was opposing it tooth and nail. The Civil Nuclear deal discussions with the US started when Atal Bihari Vajpayee was the Prime Minister during the NDA rule. So, having an Ex-National Security Advisor to talk in favour of the nuclear deal when BJP was opposing the same, sort of punctured the opposition narrative.

Again coming back to the point of introducing the reforms after extensive consultations across the board, our experience has not been very good. During UPA, the land acquisition bill was brought in after extensive consultations and after building a broad consensus. The result is there for all to see. The bill never took off. It is a classic case of the operation being called successful while the patient was dead. The Modi government in the very 1st year wanted to fix this and brought in amendments which never went through. Finally, in the absence of a consensus, the amendments were not made and the bill continues to languish without serving the purpose of its existence.

Much of the infrastructure projects announced by the Modi Government are behind schedule or languishing in spite of having a very enterprising and well-meaning Nitin Gadkari as the minister at the helm. The main reason has been the delay in land acquisition essentially because of the rigorous clauses built in the bill that was brought in with a broad consensus.  So, any bill just because it is brought in with a lot of consultations and a broad consensus need not be the ideal bill.

In the parliament, the idea of consultations and building consensus effectively means putting the draft of the bills or amendments through select committees or standing committees. To borrow the words of HDFC Chairman, Deepak Parekh, “In India, when the government cannot commit, it committees!” Which effectively means extended discussions and delays. At the peak of UPA rule, when most of India wanted a decisive government with a majority on its own, it was precisely for these reasons. So, when Modi Sarkar which has now won a decisive mandate on its own twice over, takes the route of avoiding these long winded committees and brings in changes in laws on issues like the farm bills where discussions have been going on for 20 years now, we shouldn’t complain.

Building a consensus is often overrated and I concur with the latest statement by Niti Aayog Chairman Amitabh Kant that in India, we suffer from “too much” democracy. I sincerely hope that the government sticks to the main proposals and not roll back on the essence of the farm bills. In the meantime, it should use its communication firepower led by more amenable ministers like Gadkari to get the message across to the farmers’ associations and get them to pull back.  The Mandi Vs Modi battle is clearly a distraction for us at this time when the government must be focussed on handling the economic mandi (slump) on a war footing to bring the growth back on track.

Post script: The title for this post is courtesy my good friend Gopal Kutty Sasthri who popped this up during one of our chats on the topic and so due thanks to him.