Implementation Deficit-The Achilles' Heel

 

Implementation Deficit

 On the streets of Mumbai, there is no discernible ‘wave’ even now, mere days before the Maharashtra State Assembly elections. An analytical cabbie there said to me that the city has been run lately and for some years by a pact between the Congress-NCP State Government and the Shiv Sena controlled Municipality. It is live and let live, or else; and this has become an acceptable formula to both sides.

The public mood may be against this faustian pact, he continued, but what has really changed now?  What will be the impact of the ‘Modi difference’ in the absence of a ‘leher’, and how will it be judged, if there is no choice but to go in for a contentious post poll-coalition, muses he?  

In this election season, post the momentous breaks in the Congress-NCP alliance and that of the BJP-Shiv Sena, there are rumours and counter-rumours being floated every day, presumably to seek tactical advantage. The waters are being deliberately muddied to show each one in a bad light, but  it appears to  be only confusing, confounding and turning- off the voting public.

One credible pre-poll survey however,  gives a majority to the BJP and its allies with 154 out of 288 seats and the lion’s share, over 35%, of the popular vote as well. The Shiv Sena comes a distant second with 47 seats. The Congress and the NCP do very badly. But the same poll indicates, somewhat improbably, that the most popular candidate for Chief Minister is Uddhav Thackeray. My cabbie’s take may be a powerful insight  after all.

 Meanwhile former Chief Economic Advisor to the Government at the Finance Ministry, Shankar Acharya, pertinently asks where is the imprint of Modi’s ministerial team, several months into the new administration?  Still, Arun Jaitley is back at work and has dealt with the Pakistani ceasefire violations in robust fashion, but nothing is happening yet on finance ministry authored reform.

Elsewhere, international investment mogul Jim Rogers bluntly says Modi has not done very much on the ground, even though his economic  PR  has been excellent. OECD however says the economic momentum is likely to pick up.  But Sonia Gandhi, despite the humiliating defeat of the Congress in the general election, has made bold to call NaMo an empty braggart.

Governor Raghuram Rajan at the RBI has been given carte blanche to control CPI inflation, but the RBI only oversees monetary policy, and how will this dovetail with the vital need to grow the economy, and the persistent demand from business and industry to lower interest costs? 

So far, the gains to the economy, and the RBI, have come mainly by default, from much lower global petroleum prices, and a fairly decent monsoon after all. But even if it sees us through to the World Bank projected 6.4% in GDP for 2015, it will have done so without a single big or small structural reform implemented to date.  This suggests we could do much better if we get a move on.

Prime Minister Narendra Modi, on his part, is still revelling in the $100 billion he has drummed up  during his foreign visits in September. This money is waiting to enter India, by way of FDI. And while this is commendable, it is unlikely to actually arrive without the Modi Government making ready at home. Why then is Modi taking so long to make major reform announcements?  Is he being hemmed in by bureaucratic resistance?  Are his ministers waiting on him for a nod? Is the research taking too long? Who is his implementation czar on economic reform? Is he, as prime minister, spreading himself too thin? Nobody seems to know; while the rumour mill continues to work full-time.  But it is certain that the shadows of this implementation deficit are lengthening by the day, and doing great harm to the Government’s image.  

Yes, 33 licences to the private sector in the defence production area, long pending under the UPA, have just been approved. Other applicants offering to manufacture less complicated gear have been told they don’t even need licenses to begin now. But it is tax breaks, the GST, reformed company and  labour laws, etc.  that will have to come alongside to get these and other foreign collaborations/joint ventures  off the ground.  

Similarly, there is land acquisition to be expedited for the modernisation of the Indian Railways, another thrust area, and the progression of our much delayed highway networks.  Green clearances have been expedited  by Minister Javdekar for  many stuck projects, but there seem to still be impediments  of financing, as well as more clearances pending.

A bold and sweeping momentum then, needs to take hold in the Government, so that multiple structural issues  can be dealt with simultaneously. This is urgent, and must come about, before the gap between intent and execution becomes the Achilles' heel of a very promising  Government.  

   (812 words)

October 9^th, 2014
Gautam Mukherjee