By Vijay Sanghvi
Francis Fukuyama in his book ‘Political Order and Political Decay’ points out that political institutions in a democratic setup rarely provide the impetus for the economy to run on the fast track.
Narendra Modi knew this even while he was raising economic expectations during the electoral campaign. Still, he adopted the pragmatic approach, even though not many politicians on his side or in the opposition were willing to change their thinking and approach to politics.
Stalling the government from moving ahead was the political philosophy of his opponents – within and outside the party. It is something that the Indian politicians had learned to do perfectly since the days when the shouting brigade took over the Upper House in 1990.
A year ago the economy was in the dumps and the growth rate was lagging behind. In the last one year of NaMo regime, the economy has turned around, and India is set to be the fastest growing economy surpassing China next year. Inflation is under control and so are fiscal and current account deficits to provide enough scope for new development ventures. Coal production has improved enough to enable many power projects to restart work at full steam. Project approvals have been accelerated. The decision-making paralysis that had crippled the previous regime is as good as over.
Auctions of products and services may provide undue advantage to money bags, but it leaves no scope for political scandals. Shifting the process of project approval online has reduced the scope for bribery and cut down long delays. On the economic front, the year just gone by has been a complete contrast as compared to the previous three years.
Still, if there is a discontent among the people– that is because expectations are high and results are somewhat slow.
The man who transformed Gujarat Prime Minister Narendra Modi had the reputation of a man of action. Every section of the society expected him to use the magic wand to deliver what they wanted. Modi’s first challenge was to pull out and tow the economy from the brink of collapse. It was a time-taking process that required a change in attitude and mindset of those manning the economy.
Modi seized the opportunity to rush relief to earthquake victims in Nepal and terrorism infested Yemen to prove a point that the Indian administrative structure is efficient and can move quickly.
It helped quash the general belief that the Indian administrative machinery is nothing but inefficient, lethargic, slow and corrupt. It raised hopes that he would be able to deliver promises of easing procedures for investments in India. Potential investors are still shying away from coming to India with their capital, technologies, and production units. They probably find it much easier to deal with the Chinese than the Indian bureaucracy and babudom. Experience has made them wary of parking their funds in countries with strong shackling administrative systems and strong democratic institutions with a formidable tradition of opposition.
NaMo’s could not keep pace with the expectations he generated, but that is because he is heading a party that believes in the rightist approach whereas the prevailing conditions in India demand a leftist approach.
A majority of the people are accustomed to remain dependent on the crumbs thrown at them by the political and economic institutions taking the initiative to solve their problems. For the first time in six decades, more than 120 million families were given access to the banks in a year- a record of sorts. For the first time, the Mudra Bank scheme was introduced to provide small credit needs of those in the unorganized sector. The objective was not just to stop leakages of subsidies, but to make the deprived and underprivileged masses stand-up on their own feet. The whole idea was to bring about value additions to the Gross Domestic Product by bringing them in the system for the first time.
Apart from greater attention to the deprived classes, NaMo went out of the way to resurrect Gandhian thoughts and legacy. NaMo promised Clean India to celebrate 150th Birth Anniversary of Bapu in 2019. Modi has emerged as a man risen from the ranks who could change the world view of India. In the process, he has won the admiration of the Communist China as well as capitalist West.
It was difficult to tame the rigid political mindset that resists all attempts to transform the India from an agricultural to an industrialized economy. Times have changed and so have the attitudes and perceptions of the youth. Today, more children are going to schools- this is an indication of the changed approach of parents including poverty ridden families. The educated youth refuses to work on farms and seek employment elsewhere. This strata’s need of employment cannot be met only by providing skills, but also a mechanism to use their skills.
The Land Acquisition Act reforms were merely a symbolic declaration of intent of going to be an industrialized nation. But who is going to explain this to the conservative politicians within and outside his party who resist his moves. All this has only compelled NaMo to slow down and tread slowly and gradually so that sudden changes don’t cause terror and panic.
His intentions are also stymied because of his team of mediocre men, both in politics and bureaucracy. His finance minister and railway minister delivered balanced budgets oriented towards encouraging investments, but his agriculture minister proved incapable of meeting the crisis that nature is threatening to turn the year in a bad one. The major threat to his approach of the minimum governance is from men in the tax enforcement agencies using tax laws and administration to fleece people not for the national treasury but personal gains.
NaMo had to warn that his government would not brook religious intolerance in any form. In the days of mounting threats of terrorism, based on religious biases, any incident of religious intolerance can cause a major damage to the new image of India. His warnings have certainly caused heart burning. His compulsion to slow down his pace of changes is the cause of discontent in the business circles. His mentors are unhappy with his attempts to shift the basis of the economy. His opponents outside cannot devise better methods to hold him from moving without affecting national good. The year ends with disappointments, even though everyone expected a miracle.