Agenda for Modi 2.0!

Dear Mrs. Sitharaman,

First things first. Congratulations on becoming the finance minister of the country. Ever since you have taken over, there has been a flurry of unabated, unsolicited advice on what you should do and should not, in the upcoming budget. I was extremely reluctant to add to that already long list. But then your extremely gracious and earnest tweet the other day, welcoming all suggestions and inputs changed my mind.  Being from Trichy as well, I could see the “Trichy Tehzeeb” in that request!  Hence this piece, with my wish list not just from the budget but overall from the Modi Sarkar 2.0 from an economic agenda point of view.

I am not an Economist. I am just a keen and informed observer of Indian politics and a well-wisher of our country. So, my points may or may not stand the scrutiny of economists but hopefully will pass muster with the readers of this post.   I promise that I am not going to repeat a lot of stuff which has already been suggested by the erudite in their pieces.  So, here we go:

  • First up, the positive effects of implementation of GST and the kicking off of several infrastructural projects from the 1st term will start bearing fruits in the coming 2/3 years. So, I suggest that the 5 year term till May 2024 be divided into 2 parts – First 3 years till 2022 and the second 2 years till 2024. Take all the tough decisions in the 1st part and use the 2nd to stabilise things.
  • Second, in Modi 1.0, there have been quite a few hits but some misses too. In the 2nd term, on the back of a solid mandate, Team Modi should play on the front foot with confidence, while at the same time leaving alone deliveries outside the stumps and negotiating short pitched deliveries and bouncers with alacrity. In governance parlance, this means implementing even the not so populist decisions with confidence and not getting muddled in unwanted distractions.
  • Third, please request the economic ministries to come up with a list of things to be done to rev up the economy which is stuttering. Divide this list into 3.
    • 1 – Low hanging fruits which don’t need legislative backing
    • 2 – Which need bills to be amended, passed in the parliament
    • 3 – which need the states to take action

Get going on this list systematically. Have a target of 60 days to accomplish everything in the 1st list. This will give a clear message to all stake holders that this government is not the one to rest in its electoral success laurels!

  • Fourth, you are now in Japan and there is a lot we could learn from the Japanese in terms of going about things. One of the things I learnt from working in a Japanese company is “Prioritisation”! As Indians, we tend to focus on 100 things at the same time and spreading ourselves extremely thin. This was one grudge I had on Modi 1.0 which embarked upon so many projects simultaneously like Make in India, Skill India, Stand up India, Digital India, Smart City project, Ujwala programme and so on. If you closely measure the success, it is only the programmes which had focus like Ujwala, Rural electrification, Rural housing that met with success. In Modi 2.0, I would suggest that the Government takes up a maximum of 2 or 3 projects at a time, focus on the delivery with finite timelines and then move on to the next set of 2/3 ideas. This is what Japanese do.
  • Fifth, in India we have been talking of linking outcomes to outlays. But seldom has the same been acted upon. So, in the coming budget presentation on the 5th of July, please do not announce plain outlays but outlays that can be linked to quantifiable  outcomes.
  • Sixth, we usually see that in the budget, there are many outlays which are just carried forward year after year with a % increment or a % cut. For example, since 2013, money from Central Budget has been allocated to Nirbhaya fund to support initiatives towards ensuring women safety. One really doesn’t know how this fund is being utilised and after 5 years what this fund has achieved. This is just one example. In every budget, there are many sundry allocations like this. Please review item-wise outlays in the last 3 budgets,  respective outcomes achieved and allocate outlays in the coming budgets only if they make sense.
  • Seventh, considering the state of the economy, there is a need to mobilise resources to generate income and keep fiscal deficit under check. As Prime Minister Modi has been talking of “Minimum Government and Maximum Governance” one way of mobilising resources is by Government exiting many businesses that are no longer strategic in nature and monetising those assets. In Modi 1.0, in every budget, we had an item called “Proceeds from disinvestment” and this was achieved by making some PSUs like LIC pick up shares from the disinvested PSUs. During NDA-1 under Vajpayee, there was a clear focus on “Real” Disinvestment with a full-fledged ministry and a determined minister like Arun Shourie doggedly pursuing it. UPA did away with this and since then Modi 1.0 included, there has been no serious disinvestment in the country. I suggest that Modi 2.0 take this up seriously. A functional ministry named as “Monetisation of PSU Assets” (since disinvestment is seen as a bad word) should be formed. I also add that the proceeds from this monetisation be parked in a separate account and used for welfare schemes. By this, any criticism of the move can be countered by demonstrating that the proceeds of the same are being used for social welfare. A creative way needs to be found for accounting like this.
  • Eighth, in Modi 1.0, there was a big push towards infrastructure projects like highways and roads which was really commendable. The same should be continued with additional vigour. However, as admitted by Nitin Gadkari the pace of the projects could have been faster but for complex land acquisition issues. This is a big issue even today. In the 1st term, after initial belligerence, the government chickened out of the much needed amendments on the Land Acquisition bill. I remember Modi taking this up with rigour in 2014 basically because all the states identified certain provisions in the existing Land Acquisition bill as impediments for timely closure of infra projects.  Since the states are equal stake holders in this issue, please have discussions with a fresh outlook, strike a consensus and pass the amendments to the bill smoothly in both houses of the parliament. Renaming this as “Land Partnership bill” or something like that instead of the negative sounding Land Acquisition bill will help too to remove the negative connotation around this!
  • Ninth, taxation in India is still complex. GST implementation was a landmark Tax reform. I am sure there is a road map towards further simplifying the same with reduced tax slabs and simplifying procedures. Now, in this term please focus on Direct taxes. I hope that the panel working on overhaul of this will submit their recommendations quickly and your government should adopt the same ASAP. In simple terms, the mantra should be lower tax rates with no or very few genuine exemptions. Some of the exemption clauses we have are weird and defy all logic. For example the current clauses we have for LTA exemptions for salaried. Applicable for 2 years in a block of 4 that being calculated from the year 1986 and so on!!! Someone needs to do a Zero based hard look at all the existing exemptions for personal and corporate taxation and do away with most of them which don’t make sense in this day and age!
  • Tenth and the last one. On the 5th July when you leave your office for the parliament to present the budget, your team will hand over a brand new brown brief case which will have the budget speech. You and your team will pose with that brief case for the cameras and then you will read out the budget speech from the bunch of documents. And here’s what I suggest. Please, please do away with this brief case and the papers. Instead, amble along in style, pose for cameras with your hands “free” and as you rise to present the budget in the parliament hall, download the speech from the ministry’s secure server and project it in a large screen. Doing away with the rambling, long speech that would be just uber cool, while at the same time giving a push towards Prime Minister’s “Digital India” dream!

Pic Courtesy: Livemint

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The Making of Modi 2.0!

As the results of the much anticipated Lok Sabha elections in India unfold themselves this day, it is clear that Narendra Damodardas Modi is all set to occupy the Prime Minister’s chair of India once again. In this avatar of Modi 2.0, BJP is looking set to get a majority on its own and NDA as a pre poll alliance is expected to beat its 2014 tally! First things first. This is a remarkable feat for an incumbent to not just return but return with a better performance than the 1st term and so kudos are in order!

As much as the return of Modi as the prime minister was expected to a large extent, the scale and the ease of this victory was not expected till some of the exit polls predicted so. What were we told all this while? “Demonetisation hurt jobs and the poor. GST is still hurting traders. There is agrarian crisis all over. Job creation has hit a historic low. Minority are living under increasing fear. Economy is not growing enough. And since 2014, the Idea of India has been threatened”. And much more. So, in spite of the fact this this government did perform in areas of infrastructure like roads, highways, railways…, asset building in rural areas, reaching electricity to the hinterland,…,… we were told that these were not enough to re-elect Modi again that too with a clear majority.

That being the case, what explains this massive victory? What is behind the making of Modi 2.0? I call it the story of “M”s!

M for Modi: – Let there be no doubt in anyone’s mind people on this. People have not voted for BJP or the NDA. They have unequivocally voted for Narendra Modi! States like Madhya Pradesh, Rajasthan which were lost by BJP are now being swept by them!  Modi has been seen as being earnest in his endeavour to fulfil promises he made. So, even if ALL the promises were not kept fully, people are being kind enough to give another chance. Programmes like Swachh Bharat Abhiyan, Demonetisation, Toilet construction, rural electrification and Ujwala Yojana… are being seen as sincere attempts in improving living conditions in India. Though some of the programmes like Demonetisation faltered, people were willing to forgive and forget!

M for Muscular leadership: I will have to narrate an anecdote here to elaborate this point. A day before polling in Mumbai, my 11 year old daughter’s friend asked my wife as to whom she would vote.  My wife asked why she wanted to know that. And her response left me stunned. “Aunty, I hope you will vote for Modi. Because only he can give a fitting response to Pakistan. India in the past never entered Pakistan and hit them. But under Modiji, humne ghuske maara”!  This was the impact a strong leader leaves in the minds of the young.  Critics may call it mindless belligerence when Modi decided to do a surgical strike and follow it up with an air strike. But people want their leaders to show spine in matters of their country’s defence.

M for Mission mode: This is the difference between Vajpayee/Advani era BJP and Modi/Shah BJP. During NDA-1, after forming the government and running a reasonably good one at that for 6 years, BJP did not do anything to widen their base. But the BJP under Modi/Shah is a different kettle of fish. After having won a decisive mandate in 2014, did they keep quiet? They got into “Mission mode” in North East and then later Bengal and the results are there to see. For BJP, if 2014 was UP story, 2019 is Bengal+UP story! In 2019, when it was facing the spectre of the SP-BSP-RJD gathbandan, BJP activated its “Mission mode” to target 300 on its own! This by targeting areas like Orissa, Bengal and North East.

M for Machinery: This is linked to the above. That is of having a plan and executing the plan through an effective machinery. The party machinery under the leadership of Amit Shah works relentlessly in expanding their base within India. Not just during election time. This also means that BJP will now target states like Telangana, Kerala and Tamil Nadu next probably for 2024!

M for last Mile Delivery: It is one thing to announce programs. It is one thing to have a strategy in the board room. It is another thing to ensure last Mile delivery. Whether it is Jan Dhan Yojana or Ujwala Yojana or other Yojanas, Modi Government’s track record on last mile delivery has certainly made a difference to people. This is what has made BJP and Modi to hold on to their leads even in the face of a combined opposition in states like UP.

M for Marketing: The word “Marketing” is often derided upon as if it is a bad word! As a marketing professional myself, I have resented it often. And I have said that Marketing is not a bad thing at all and is a critical element in a product’s success or failure. In political arena, for a leader or for a party, it is not just enough to perform. But it is important to be “seen as performing”! In that sense, BJP as a party and Modi as a leader are miles ahead in terms of marketing themselves.  Some would say that Modi’s success is all about just marketing! I tend to disagree. One should not forget the fundamental mantra that even great marketing cannot save a bad product!  One can write a separate blog on BJP’s marketing but turning the Chowkidar Chor hai slogan of Congress on its head as Main bhi Chowkidar campaign in its favour is one example of some great marketing by BJP!

M for Models: One reason for Modi in the 1st place to earn credibility in 2014 was his famed “Gujarat model”. This credibility is important for people to take your promises seriously. And this is the problem with the opposition today. The main opposition party doesn’t have any credible model to point the people to! If today, the Congress promises “Nyay”, people are reluctant to take it seriously. Because, even in states which are ruled by Congress, they find it difficult to hold on. If Congress has to be taken seriously in future, they need to develop their own “models” which they can positively refer to.

I hear some of you saying that it is all just one “M” which is Modi! No victory is accomplished with one factor. It is usually a combination of factors. I believe that in the making of Modi 2.0, the mantras were the above so many “M”s! Now that Modi 2.0 has been accomplished, it is time to look ahead and focus on the agenda for Modi 2.0.  What should that be? Please look for my next post! For now, M for Mangal!

Pic Courtesy: Rediff

Mahagad(bad)bandhan!

WhatsApp with all its inherent strengths and weaknesses can be a good source of humour. In particular, in the election season, meme factories are running at full capacity churning out humorous content day in and day out. Among this was a clip – a gem of a creative idea that was going viral on social media few days back. Unlike the usual edited video clips, this was an animation of a WhatsApp group conversation. And here’s the best part. The group was titled “Mahagathbandhan” and showed an imaginary chat among its members who were supposed to be part of the Mahagathbandhan! As this clip was trending on social media and doing the rounds on various WhatsApp groups, I am sure you would have seen it. If not, do check out the clip here!

The humour and sarcasm in this clip notwithstanding, it exposes the fallacies of the Mahagathbandhan being propped up in just 2.5 mins! The idea for this Mahagathbandhan, which is a spectacle for few and spectre for others, I guess, germinated in May last year after the Karnataka polls. After losing the majority, Congress in a very alert move, decided to support Janata Dal (S) though they fought against each other in the elections. This move deprived BJP of forming the government in Karnataka even though, they were the single largest party with just few seats short of majority.

In Indian politics, if you ask me of one sight which is downright repulsive, it is of leaders of political parties of all hue showing up on stage clutching their hands and raising them as a symbol of being together. No other visual can be as dubious as this. The swearing-in ceremony of H.Kumaraswamy Gowda provided the schadenfreude moment for all those parties opposed to the rise of BJP in the country. So, we saw leaders as diverse as Kejriwal to Stalin to Mamata to Chandrababu to Rahul Gandhi to Mayawati to Pinnarayi Vijayan to Akhilesh coming in person to grace the occasion. That stage with the majestic Vidhan Soudha as the back drop on the 23rd May last year, would have given seed to the idea of the Mahagathbandhan to all parties who wanted to stop Narendra Modi on his tracks!

As it is usually the case, showing off a possibility is easy and making it possible is the onerous task! Unlike in the past, where parties come together in a pre-poll alliance or at times cobble up a post poll set up, the Mahagathbandhan is an epitome of conflict of interests among its constituents. Held together by one single-minded purpose of keeping BJP or rather Narendra Modi away from another term, there are conflicts galore!

By definition, the proposed Mahagathbandhan is supposed to be a rainbow coalition of all parties outside of the NDA who have one common enemy. A rainbow with all its different colours presents a pleasing sight! But a rainbow coalition doesn’t! It is obvious on paper that if they all come together and fight the BJP/NDA, thanks to the arithmetic of vote shares and the possibility of transfer of votes, the Mahagathbandhan will pose a very stiff challenge to the BJP in seats where they got the benefit of a split opposition in 2014. And thereby, this is a sure shot and obvious formula/strategy to stop Modi from getting a 2nd term.  While it may seem simplistic, in reality nothing can be more complex than the coming together of the Mahagathbandhan! And here’s why!

Let us for the moment keep aside the historical tussles and conflicts the parties in the Mahagathbandhan, had among each other and just focus on the issues of today.

Starting from the capital, BJP took all the seats in Delhi in 2014. But in the assembly polls that followed, AAP’s broom literally swept Delhi dislodging Congress after a 15 year stint! Sections of the Delhi Congress are still not able to come to terms with the scenario of fighting with a party which was instrumental in not just defeating them in Delhi but also creating that “Anti-Corruption” atmosphere in the entire country in the run up to the 2014 polls. Kejriwal went to the extent of saying that AAP will take all the seats in Delhi without Congress’ help but they needed the Congress in Haryana!

In Kolkatta, where TMC is ruling supreme and BJP is emerging as a strong challenger, a tie up of TMC, the Left and the Congress may dent BJP’s hopes of winning 7-8 seats in WB this time.  But then, the Left cannot stand the TMC and it is unimaginable for the workers to come together and work for a common cause.  So when the Left and the Congress are in an alliance, it remains to be seen if this will affect the TMC or the BJP more!

While in Bengal, the Congress and the Left are in it together, in Kerala though, the numero uno enemy for the Left is the Congress led UDF! In fact, this fault line got exposed after Congress announced that Rahul Gandhi would contest from Wayanad in Kerala in addition to Amethi! CPI(M)’s Prakash Karat was among the 1st to criticise this decision! He went on to say that the Left will work to defeat Rahul Gandhi in Wayanad!

There are such inconsistencies all over. In Maharashtra, the Congress and NCP are together for a long time, but in Gujarat, they are not. In the recent assembly polls in Telangana, TDP and the Congress fought together in an alliance but that couldn’t prevent the TRS winning the state by a landslide! After that spectacular defeat, TDP is silent about its tie up with the Congress for the Lok Sabha polls and the Assembly polls in AP!

None of these confusions are more pronounced than in UP.  If BJP needs to be defeated in 2019, it should be defeated convincingly in UP. But even this overarching objective couldn’t stop BSP and SP from ditching the Congress for the Lok Sabha polls. So, finally that famous picture of Sonia Gandhi hugging Mayawati in glee during the swearing-in function of Kumaraswamy remained just a photo-op!

And one common theme which comes up as a predicament for all regional parties to be part of the Mahagathbandhan is their perception of Congress as a liability rather than an asset in the coalition! So, in all states where the regional parties are stronger than the Congress, they don’t want to have any truck with the Congress!

Now, I am sure that all these parties which are taking a stand based in their self-interests today, will have no hesitation in coming together and form a post poll Mahagathbandhan if they get an opportunity to take a shot at power! And one can imagine, with all the inherent conflicts and fault lines among themselves, the alliance can only run with confusion writ all over! As each and every coalition partner start pulling the cart based on their self-interests and not necessarily Nation’s interest, it is not difficult to visualise what will happen to governance!  What will start as a Mahagathbandhan will soon become a Mahagad(bad)bandhan! Don’t believe?  Check out what happened to governance between 1977 and 1980, when we had the 1st Mahagadbadbandhan of sorts!

Postscript: Title courtesy my friend and an avid political watcher, Mukund Sampath who called Mahagathbandhan as a possible Mahagad(bad)bandhan in one of our chatsand that prompted this post!

Toon courtesy: Satish Acharya

From Quota politics to a “Quota for politics”!

In India, they say the wheels of the Government usually move very slowly. Not always. When there is a political will, the same wheels can attain humongous velocity just like how it happened few weeks ago. The Cabinet approved a proposal for introducing a 10% quota for economically weaker section of the society on the 7th Jan. And by 9th Jan, the bill to amend the constitution for the same was passed by both the houses of the parliament! The quota bill was done and dusted in flat 3 days!

During the debate over the quota bill, almost all parties mouthed the usual platitudes – not on the proposal per se but on the timing. The coming together of the ruling and opposition for this cause demonstrated another aspect of “Unity in Diversity” in India. That is, on the issue of reservations which has high impact on electoral fortunes, almost all parties think alike. Herein lies the irony.

 “A quota for the economically deprived sections of the society” sounds logical and seems a significant forward step in our country which for a long time has been having quotas based on caste. As a step which doesn’t differentiate based on religion… it is high on optics.  But then, as they say the deadly devil lies in the details. This 10% is over and above the existing 50% as mandated by the Supreme Court for caste based reservations (with the exception of Tamil Nadu which has 69% reservations).

Before venturing into another quota based on economic class, I think that there was a need for an assessment of how the caste based reservations have performed in India in the so many decades since they were introduced, against the desired objectives. Based on what I have seen in Tamil Nadu in very close quarters, I have no doubt in my mind that the caste based reservations have helped in emancipation of a generation of people. Thanks to the quotas, many of the deprived sections could get access to decent higher education and then jobs. Which in turn have helped a generation of families to be part of mainstream India. This could not have been possible by another poverty alleviation programme, I believe. Having said that, the important issue to define now is how we will close the tap on this affirmative action.

We all understand that the originally envisaged time frame of 10 years for caste based reservations in India is impractical. Now that we crossed 68 years with reservations which typically means it has benefited two generations, where are we in terms of social equality and equity? Do we know? Do we measure? Who will bell the cat in terms of suggesting the sunset clause?  Do the offspring of those first two generations of people who could get access to higher education and government jobs need the same level of quotas as their parents and grandparents? In addition to quotas, what else is required for bringing down the class divide which still exist in the society? These are few important questions which arise.

The second issue is, the definition of the economically weak for the purpose of this bill. The provisions like a household income of under Rs. 8 lacs or owning less than 5 hectares of land seems to be extremely liberal when you look at all angles possible and government’s own definitions in other contexts.  In one stroke, above 95% of the populace has been covered under this ambit!  So, I join the naysayers who question the effectiveness of such a quota. From the total population, if you remove those who are already beneficiaries under the earlier quota regime (roughly 70% of the population), this new 10% quota is applicable for the economically needy among the balance 30% population.

The third issue is, there are different points of view if this will finally stand judicial scrutiny. As per the Government, the 50% cap was only meant for “Caste based reservation quota” while there are others who say that the cap applies to all reservations!

Finally, Affirmative action by definition means policy intervention for favouring individuals who are known to have been discriminated for various reasons in the past. Will economically deprived but not marginalised by caste, come under the category of those who were discriminated in the past? While the concept of helping those economically deprived is indeed noble, why not provide scholarships for higher education and assistance for business ventures instead of quotas?

You can question our netas on their intellect but we cannot under-estimate their political instincts at all. Not surprising that almost all the parties voted for this quota bill in both the houses of the parliament.

In the upcoming election season, the ruling NDA will certainly go to town for ushering this new direction on quota politics in India. However, even in the Hindi belt, I feel it will have minimum resonance. The opposition by playing ball on this, has in a sense blunted the political rewards what the BJP/NDA can reap. Imagine the situation had the Congress/UPA and others had opposed this move. So, all have played their moves smartly.

The bottom line is, a quota for economically deprived is as I said, provides for excellent optics and is sound politics. I do feel, like how the Supreme Court has put a cap on the quotas on reservation, we should have a cap on the quota for playing politics for every political party when in power. We cannot expect them to stop playing politics completely but, what about a Quota for politics?

Cartoon courtesy; Times Of India

In #2019, no TINA but be wary of TAIL!

As 2018 winds down and we step in to 2019, for India, it is just not another new year. Mid of 2019 is when we will have the Lok Sabha polls that will determine if Narendra Modi will get another shot at being the Prime Minister. In my memory, I cannot recall of any individual who has come for so much scrutiny as an elected representative. And whose re-election is being discussed and debated so intensely in the country. First up, blame it all on the social media and its growing tentacles!

The fact that a government’s performance is coming up for such a rigorous appraisal itself, augurs well for our country. It should be like that. I only hope that this appraisal business isn’t selective and not just reserved for Modi Sarkar! If I think as to why this government has come under such a close assessment, I realise that it should blame itself for the same.

Did we have any other government in the past that

Set targets for itself on many fronts?

Which announced the targets and put them out in public domain?

Which tracked the actual delivery against the targets and presented them for everyone to see and comprehend easily that too mostly on real-time basis?

Today we know, not just what this government’s targets are for rural electrification, construction of highways, building targets, opening of bank accounts so on and so forth but also where it stands in terms of achievement. One look at the https://transformingindia.mygov.in/performance-dashboard/ site gives us an update on a real-time basis. It is not that governments in the past did not set targets for themselves. But all these targets were usually in terms of outlays announced in the Annual Budget speeches and seldom one would know what the final outcomes were. Between the outlays and outcomes, the India story remained in tatters. I guess not any more.  So, if people keep remembering the promises made and get disappointed if some of the promises have not been met fully or adequately, blame it on the Government’s efforts of putting out data in the open which makes it possible to compare achievements Vs goals easily.

In comparison to the upbeat mood in 2014 and 2015, today the mood in the country is more sombre. Even the most loyal fans of Modi have realised that probably he chewed more than what he could swallow. Five years are just not enough to turn around and solve all the ills of the country. That too when the global economy is facing one headwind after another! But then, as a country we had our own share of misses. Right when the economy was getting back on track in 2015/16 from the throes of policy paralysis and negative vibes and was poised for a leap, this government let loose the Demonetisation devil on the economy.  This set the economy back by 2 years to get back on track. That we didn’t fully collapse and managed to grow the economy at a slower pace nevertheless, would be a miracle, academicians would pore over in the years to come!

Before the effects of Demonetisation could subside, this government went ahead with the introduction of GST which according me is the biggest Tax reform in Independent India. Irrespective of the critics who take on this government on the “not so perfect” GST, I maintain that it was extremely creditable on the part of Modi Sarkar to launch the GST without further delaying, on the 1st of July 2017. In India, in aspects of meeting deadlines, we Indians follow religiously and rigorously the Theory of Elasticity which says solid materials deform under the application of external force and regain their original shape when the force is removed. So, in the quest of a perfect, ideal GST, if this government had deferred the launch, who knows, perhaps we will still be talking of “introducing the GST” in the upcoming budget!  Against that, today we already have a thriving GST which is now going to complete 2 years! The introduction of GST will remain this government’s biggest achievement when its history is written.

The short term pains inflicted by these 2 moves (Demonetisation and GST) to the small and medium businesses combined with the government’s failure to address the Banking crisis at the beginning of its term have led the BJP to the situation where it is today.  In its strong hold states like Gujarat, Madhya Pradesh, Chhattisgarh and Rajasthan, the party’s support base has been dwindling. On the contrary, the Congress which seemingly had no hope of a revival till mid-2017, has smelt blood and is hoping to deprive Modi of a second term and a shot at history.

In India today, in the main stream media and also probably social media, the obituary of Modi Sarkar is being written on a daily basis. As per me, it is too early to write off Narendra Modi in the context of 2019. In spite of his government’s misses in terms of promises and more importantly the delivery of Achhe Din, his personal credibility as a leader who is keen to deliver, is intact. I do believe that there are those who are disappointed with him. But they are still not disgusted with him. Yet.  My personal feeling is that they would like to give him another chance.  The same states which voted out the BJP recently could very well see voting for Modi in the Lok Sabha polls!

Apart from this factor of Modi’s personal charisma, there is another important factor at play. People like to call it the TINA (There Is No Alternative) factor. I don’t believe that there are no alternatives to Modi. In fact, we have many. We have the spectre of a Rahul Gandhi becoming the Prime Minister, if a Congress led UPA front emerges as the biggest. Or else it could be toss between a Mamata Banerjee or a Mayawati or a Chandrasekhar Rao or any other leader depending upon how many seats they win, as part of a coalition which will be cobbled together post the elections. In all these cases, a leader of the party with 30-40 MPs would head the coalition of 10-15 parties with each party playing the “I am indispensable” card!

This Mahagathbandan where, parties will oppose each other in one state but will come together in another state is only a Maha”cut”bandhan who want their share of power and the perks that come with it. I believe that people are smart enough to understand and realise that Modi Sarkar might have disappointed but will still probably vote for him not because of TINA but being weary of TAIL – The Alternative Is Lousy!

In the past, we saw many Accidental Prime Ministers as we didn’t sight TAIL properly! Hope 2019 is different. On that hopeful note, wishing India a momentous 2019!

Cartoon courtesy: Satish Acharya

Single party majority sarkar or Coalition sarkar?

Last week, parts of a speech of our National Security Advisor, Ajit Doval made headlines. Speaking at the Sardar Patel memorial lecture, Doval said that India needs a strong, stable and decisive government for the next 10 years. He also predicted that weak coalitions will be bad for India.

While I was reading this, I was reminded of another speech made by Y.V.Reddy, Former Governor of RBI some time in 2017. “Interestingly, the highest growth in India from 1990 to 2014 was really during coalition governments… So, in a way it is consensus based… in Indian situation, a coalition probably produces better economic results than a strong government,” Mr. Reddy told a Washington audience on September 27.

From the two specks of wisdom, we can assume that while the former spoke from security point of view, the latter did from economic point of view.  While I don’t remember many reactions to Y.V. Reddy’s opinion then, Doval’s speech has triggered a lot of rebuttals, primary one being, this piece from The Print’s Shekhar Gupta where he has argued that majority governments in the past including that of Rajiv Gandhi’s in the 80’s and the present one of Narendra Modi have not been better off significantly than the few coalition governments we had in between!

Without going back too much back in time, I would like to focus on the present majority government of the BJP in this post. By the evening of 16th May, 2014 when it was clear that BJP against all expectations and pre-poll predictions, was hitting the half way mark on their own, there was euphoria all around. Even among the non-BJP loyalists, there was visible excitement of how a majority government can decisively take the country forward without having to constantly look over its shoulders. By nature, coalition governments formed mostly through post poll alliances come with the spectre of instability. So, here was a government finally which had the numbers on its own and a two third majority with its allies. So, can’t blame the public at large including the author if they thought that Acche Din finally arrived for India!

In India, we have had a long history of taking one step forward and few steps backward. Unfortunately this did not change even with a single party government with a decisive leader at its helm as we found soon enough in 2014. We soon found that adequate majority in Lok Sabha is not enough and that the government needs numbers in Rajya Sabha also to be effectively called as a “true majority Sarkar”! And for that, the wait needed to be longer – another 5 years or so!

As per me, the virtues of a single party majority Sarkar got exposed when this government failed to get the amendments in the Land Acquisition Bill passed. In his 1st meeting with the Chief Ministers, Narendra Modi was reported to have got the feedback from most of the CMs (including of the Congress) that the tough and impractical clauses in the Land Acquisition Bill presented the single biggest challenge in getting many infrastructure projects off the ground.  The government went about making changes in the provisions and tried to pass the bill. But couldn’t get the bill passed through in Rajya Sabha where the Congress and the Left blocked it effectively. The majority government then tried to use the Ordinance route many times but finally gave up, coming under the cloud of Rahul Gandhi’s Suit Boot Sarkar jibe! As we speak, in spite of this Government’s intent and drive towards kicking off many infrastructure projects, land acquisition continues to be the biggest impediment in meeting deadlines for large game changing projects!

Here, I feel that a coalition Sarkar of the stable type as NDA-1 run by Vajpayee or the UPA-1 run by Manmohan Singh, would have handled this differently. By engaging with the respective oppositions through dialogues and agreeing to give and take on a few provisions. Since many Congress CMs were on board on the changes to the Land Acquisition Bill, dialogues with the Congress party leadership through some of these CMs would have probably done the trick leaving the Left isolated on this.  As we all know now, in the initial days of this government, its single point agenda was to isolate the Congress. What if the government had given the status of the Leader of Opposition to the Congress in the Lok Sabha as a quid pro quo to getting their support to a few important bills in the Rajya Sabha? Machiavelli or our own Chanakya would have been proud, isn’t it?

In spite of this initial setback though crucial, I do believe that the Modi Sarkar was flying high in that period. From bringing Swachh Bharat to national discourse to bringing back India at the top of investment destinations worldwide, Modi Sarkar could not make a single false move, but that was till November 2016! With the confidence in the Indian economy back and aided by windfall gains from low crude prices, one thought that the Universe was finally beginning to conspire to make India successful.  Again that was still November 2016!

In November 2016, Modi Sarkar took on the Universe and went ahead with Demonetisation. What seemed a master stroke initially to suck out black money, soon turned out to be an ill-conceived and ill – executed move that set the economy back by a year or so.  The much lauded ‘Jugaad’ mentality of Indians came to party, the result of which we could finally get to see.  As much as 99.3% of the junked 500 and 1,000 rupee notes returned to the banking system!! While it is to the credit of the Prime Minister Narendra Modi that his government came out unscathed with its credibility intact or grown even after this very huge miss-step, I wonder if a major decision like this could have been taken without taking the coalition partners into confidence if it was a coalition government. And in the same token, I do feel that the collective wisdom of a coalition cabinet would not have let this move go at least without proper checks, balances and preparations!

I certainly would not add the introduction of GST as a miss-step of this government as many are doing, as I firmly believe that GST was a long-awaited reform and in the introduction of the same, Modi Sarkar learnt its lessons and behaved like a coalition government in listening to and taking all parties on board. The result is there to see. GST is a reality now and after initial hiccups as can be expected from any path breaking reform, the benefits are trickling down with the GDP showing clear signs of recovery in the past few quarters.

A majority government led by a decisive leader provides for great optics particularly from foreign countries’ point of view. And that has its own benefits as major powers would like to believe that the Government/leader they are engaging across the table has the backing of the popular mandate. However, in practice, I have now come to feel that a coalition government led by a party with a fair share of numbers led by a decisive leader may be ideal for a diverse country like India. In that, we do get the advantage of the collective wisdom of alternate views while, the virtues of the decisive leader are also not missed out.

Or going a step further, a majority government with a decisive leader which behaves like a coalition government by not taking key, strategic decisions without passing by the collective wisdom of alternate brains!  In short, institutionalizing the “GST Introduction model” for all key decisions!

So going back to the speeches of Y.V.Reddy and Ajit Doval, both may be correct. In parts! Just that like in many aspects in India, the ideal situation may be somewhere in between!

Budget – The Annual celebration of Outlays!

It’s just about a week since the Annual Union Budget – supposedly the most important policy statement for any Government in power, was tabled in the parliament in India.  In these days of extremely limited attention span, the news and noise around the Budget are already done and dusted. The media has already moved on from analyzing the Budget to debating if an MP’s loud cackle is acceptable parliamentary behavior and if the PM’s witty riposte to that, will pass the test of a Nehru or a Vajpayee in parliamentary decorum! The only remaining nugget about the Budget I see in the media in the last couple of days is, as to who won the TRP war on the Budget day! For the television media, the annual Budget presentation is another TRP generating event in the annual calendar and hence the whipped up frenzy and hoopla around it.

For the past 20 years, I have also been a victim of the annual cacophony called the experts’ analysis of the Budget and in the same breath, culprit in doing my own analysis and critique. Over the last few years, it started dawning upon me that slicing and dicing the Budget and trying to evaluate the same as good, bad or average is an exercise steeped in foolhardiness. And so, this year apart from a cursory look at the highlights in the evening of the Budget day, I spent little time in that direction.

This distancing has nothing to do with this year’s Budget and its contents but on the way “we”, as a country carry out the discourse around the Budget. When I say “we”, this includes the Government, the Opposition, the political parties, the media, the Industry, the commentators and folks like us.  For years, I have been seeing that the reactions to the Budget proposals have become extremely predictable. The ruling party members give a huge thumbs up to the Budget and usually follow it up with head line making epithets. (Path breaking/Visionary,…)  While the finance minister is presenting the Budget, any announcement of outlay which is seemingly bigger than that of last year is welcomed with huge thumping of the desks by the treasury benches. The Opposition parties usually criticize the Budget calling it Inflammatory (if taxes are raised), Anti poor (if subsidies are cut), “What about implementation?” (If outlays are increased) and so on! And for other political parties, the famous Mile’s maxim applies – “where they stand on the Budget depends on where they sit” in the parliament. The Industry usually in front of cameras always give a 12 out of 10 to any Budget!  The media provides a ball by ball update on the stock markets as the Budget presentation goes on, as if the entire nation’s well-being depends on how the stock market reacts to the Budget on that day!  And we all know that the stock market yo-yos on the Budget day, without proper understanding of the provisions and settles down few days later.  The media commentators present a typically “On the one hand, on the other hand, having said that,..” analysis replete with clichés and Budget equivalent of Shastri’sms the next day in their columns. And with the advent of social media, Budget day in India is a Kaun Banega Economist? competition with you and me donning the hat of economists to hail/trash the Budget based on the outlay proposals and our own prejudices!  All this repeated itself this year as well.

In the din, what is completely missed is an analysis and report of the outcomes of the previous year Budget outlays. Budget after Budget, finance ministers announce crores and crores for initiatives and programmes. But as a tax payer, we never get to know the outcomes of those outlays. 13 years after the then finance minister P. Chidambaram spoke of “outlays versus outcomes” in his Budget speech of 2005-06, no mechanism is still in sight to measure the same. Take for example one such announcement in the last year Budget, which I clearly remember. The finance minister had announced that allocation under MNREGA was being increased to Rs. 48,000 crore from Rs 38,500 crore which was meant to be the highest ever allocation in all these years. And this was supposed to provide rural jobs, alleviate poverty in rural areas by improving rural incomes and at the same time end up building assets as well. One year hence after this historically high outlay, maybe I missed, but do we know exactly know what happened to this Rs. 48,000 crores? And this is just one outlay. A regular Budget speech is replete with outlays like this and more.

Another glaring example is the Nirbhaya fund. Announced among thunderous thumping of desks in the 2013 budget by the then UPA Government following the heinous Delhi incident, over 90% of the funds remain unused. Does that mean that rapes against women have declined? This is a classic case of an outlay not yielding the desired outcome and still being provided for, year after year!

My disenchantment with the Annual Budget exercise stems from this gap. Of celebrating outlays without knowing what the outcomes were! In the finance minister’s Budget speech a review of the past year is usually limited to the GDP growth rates and projected fiscal deficits against the targets. Even these get revised when the actual numbers come out some time in May/June and very few of us take notice.  The Annual economic survey does cover some of the trends but I don’t think even that covers specifically the results of the previous year’s outlays.

For a developing economy like India, we need more transparency. We should not be pushed to use instruments like RTI to just understand outcomes and expenditures!  And hence here are my suggestions:

  • In the start of the Budget session, before the Budget for the next year is presented, have a day to present the outcomes for the previous year’s outlays. Tell the people what worked and what didn’t. This will help to justify increase or cut outlays for the next year.
  • Typically our parliament has 3 sessions. In these sessions, have each of the ministry provide an update on the progress of the initiatives, programmes, outlays and status of outcomes announced in the year’s Budget. If not for all, have this mandatory for all key industries.

In Delhi circles, I hear that this government of Narendra Modi is a “Dashboard” government. In the sense, the PMO expects weekly/monthly/quarterly dashboard on their ministry’s accomplishments from all the ministries.  Why not extend this “Dashboard” governance to the parliament and get ministers to showcase their ministries’ performance to the people?

Even the media and the commentariat must devote time to analysing outcomes of previous outlays and bring it to the fore rather than just talking of the new outlays!

Thumping of desks by MPs and celebrating outlays on the Budget is passé.  Aim must be to let people celebrate outcomes by voting for you at the hustings!!!

Toon Courtesy: Satish Acharya (Sify.com)