Incrementalism Central

Incrementalism Central

Talk of the radically bold right-wing moves of Thatcherism, that put paid to the Trade Union Movement in Great Britain, and privatised great swathes of state-owned enterprise, being replicated here, in Modi Raj, is decidedly wishful. 

Not unless Modi himself sits down to give dictation on his presumably reformist economic beliefs in the context of India’s progress. Is there an economist that Modi particularly admires or is his vision a combination of UPA’s welfarism  and a soft capitalism of his own? Since everybody in the Opposition expects Modi to do something radical that they can pounce upon, he may have chosen the opposite, an altogether innocuous and less obtrusive method.

Besides, the Modi Government is long on election campaign thunder, but is essentially incrementalist in economic matters and the pursuit of ‘vikas’. It will still add a percentage, perhaps one and a half, to GDP by doing  this, taking it to 6.5 per cent per annum. 

Former Prime Minister PV Narasimha Rao got his transformative reforms done in 1991, by saying next to nothing at all about them. Modi can’t do that, as he is a great orator, and given to promising much. But paradoxically, if Modi appears to be doing less than he promised, the criticism can only be directed towards egging him on to do more!

Arun Shourie, former Disinvestment Minister in the Vajpayee Government,  recently opined that the plates may be clattering, but the meal is a long time coming. Many other observers claim they are ‘underwhelmed’ by the economic moves made so far. The table-setting however, if that’s what it is, seems to be impeccable.

In 1991, the reforms, which went such a long way to transform the lives of ordinary Indians as well as the Captains of Industry, was a World Bank prescription, and not some home-grown idea. It was said to be almost a dictat, if India wanted any loans and reliefs, as the country stood staring at bankruptcy and sovereign defaults.

It was then, that an erudite Prime Minister PV Narasimha Rao, implemented the first-stage dismantling of the infamous licence-permit Raj. He did it, through an obedient economist, Finance Minister, Manmohan Singh. Obedient, because Manmohan Singh was able to pt aside his personal biases. Singh was,  not long before, quite the Socialist, and teaching at the Delhi School of Economics!

The Modi Government is deeply hampered in its legislative agenda by its lack of numbers in the Rajya Sabha. But even if this were not so, its major reform  intentions themselves are being questioned as decidedly suspect. Some commentators are saying that the high expectations of second generation reforms, and indeed the Reforms Agenda itself, has been thrust on this administration by the expectations of the voting public. And left to itself, it has no over-arching market-friendly vision, or great interest in advancing it.   

Meanwhile, the Modi Government hankers, somewhat unrealistically, given its aggressive campaign style, for consensus- that too, across the political spectrum; presumably, to push through its legislative agenda.

But outside cooperation, is hard to come by, in a political landscape harking back towards status quo and a failed Leftist past. This, even if it didn’t resent Modi’s spectacular success with the voters, which it obviously does.   

The other aspect of the equation, is that the losers in the hustings are constantly looking to make trouble for the Government, often over frivolous or petty reasons. The ruling Government, in turn, is reluctant, to antagonize the much diminished Opposition, except during in its election campaigns to add more States to its tally.

But will all these niceties do it any good, or is the Opposition sensing a weakness to exploit? Does the Modi Governent wish, even long, to be liked, for example?

Chief interlocutor on Modi’s behalf in economic matters, Finance Minister Arun Jaitley, is essentially proving to be a gradualist, bred, as he is, on years in the genteel New Delhi based ‘Opposition’, while Congress played its two –steps-forward-one-step-back game.  But, given the nature of this highly apexed Government, it is very unlikely that Jaitley’s views are very different from those of Modi himself.

Nevertheless, if Jaitley turns out an indifferent budget come February 2015, it will do immeasurable harm to the Modi Government’s image and credibility.  Hoping against hope, the likelihood of a less than electric Budget 2015, is really quite high!

 All this pessimism begs the question, why is Modi going this slow? Is it because he is consolidating his hold on the Government?  Or does he essentially think reform can only be implemented in small bites?   

Jaitley may be considered a good back- room-strategist, but he is not the most electable of people, with little ability to ‘manage political fallout’. This renders him over-cautious, in thrall to the status-quoist bureaucrats, and dependent, like most of the BJP stalwarts, on the over-burdened shoulders of Narendra Modi.

(812 words)

December 8^th, 2014

Gautam Mukherjee