Modi brought reforms to forefront of politics

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Modi brought reforms to forefront of politics

Sunday, 03 January 2021 | Swapan Dasgupta

In India, where change, in any case, proceeds at a snail’s pace, the anger is specifically directed at Modi who actually believes that he has the political mandate to push through larger changes. Modi threatens the cosy world of the status quo and those who benefit from stagnation

Since 1991, “reform” has been a buzzword in Indian politics. It was realised in most circles that the system of doing things that had steadily evolved since the time of Jawaharlal Nehru and more specifically, Indira Gandhi, was no longer fit for purpose. It was not merely the case that the so-called socialist system had throttled Indian entrepreneurship. It was simultaneously acknowledged that the way the Government functioned had contributed immeasurably to inefficiency, waste and, above all, corruption. Unless India had made up its mind to remain an impoverished Third World state, blundering from crisis to crisis and unduly dependent on international hand-outs, reforms were imperative.

The easy part was to secure an intellectual consensus over the need to change and move in a direction that would unleash the full potential of the country. The more difficult part lay in galvanising the political forces that would make reforms a reality. At every stage of the reforms process that began during the prime ministership of PV Narasimha Rao and continues under Narendra Modi, it has been a case of two steps forward and at least one step backward. Sometimes, the retreat has been so great as to make the reforms near-invisible.

The pressure to let sleeping dogs lie has been visible since Manmohan Singh’s landmark Budget of 1991. Those who follow the history of decision-making may care to remember the dogged fight put up by the so-called Bombay Club of Indian industrialists who were keen to preserve their special protected privileges of the licence-permit-quota raj. They packaged their resistance to the opening up of the Indian markets to international competition in the disingenuous garb of swadeshi.

The ploy didn’t work but it ensured that the dream of radical reforms was kept in abeyance. Instead, the political consensus was that change must be in baby steps and insulated, as far as possible, from political discourse. This meant that the priority was put on reform by stealth. In the mid-1990s, confronted by a formidable challenge from the so-called Congress Left that had found a new messiah in Arjun Singh, the Congress tried to present economic reforms as the highest stage of Nehruvian creativity. It was laughable but, alas, the political class didn’t laugh uproariously. They also didn’t laugh when the Congress crashed to a ignominious defeat in the elections of 1996 and 1998. The political class also took heed at the unexpected defeat of the NDA under Atal Bihari Vajpayee, despite having ushered landmark reforms that were well appreciated throughout the democratic world.

In hindsight, it was Narendra Modi who brought reforms back into the forefront of politics. As Chief Minister of Gujarat for 13 years, Modi changed the culture of governance in the State. Making the State administration more responsive to the needs of investors and business wasn’t terribly difficult in a province where making money was always a cherished goal. What was revolutionary was the fact that this was combined with efficiency, transparency and honesty. The fact that corruption in Government services came down exponentially was a big factor in making Modi the star draw in the 2014 election. He came to be perceived as a politician with a difference.

The extent to which Modi’s image as a man of unimpeachable integrity became a factor in pushing through reforms should not be underestimated. The demonetisation of 2016 was widely perceived by political pundits and economists as a disastrous step that would kill the BJP politically. They were wrong because the dramatic step was widely believed by people to be a decisive step against black money. Regardless of its avowed objective, what is now clear is that demonetisation prepared the ground for the stupendous expansion of banking services and, consequently, the Government’s ability to deliver welfare payments to actual beneficiaries without intermediaries. The big leap in cashless transactions owe entirely to the stir resulting from demonetisation. This infrastructure, it may be added, played an enormous role in delivering relief to people during the Covid-19 lockdown. This, however, was an unintended consequence.

The resistance to reforms is highlighted in the context of the farmer’s agitation in Punjab, Haryana and western Uttar Pradesh. The stir, to negate all agricultural reforms, is aimed at preserving the pre-eminence of those who used to be pejoratively described by Leftists as kulaks. This time, since the target is the Modi Government, the rent-a-cause Left has made a seamless shift from the barricades of Shaheen Bagh to the langars along the Delhi-Haryana border. In search of a cause that will cripple the Modi Government and, in the process, the modernisation of agricultural marketing, they have enlisted the support of all those who had in earlier years lamented the fact that successive Governments had left Indian agriculture insulated from reforms. Their U-turn is understandably political and aimed at somehow forcing a retreat. The calculation is that if Modi steps back, it will make future reforms impossible. And if the reforms process comes top a screeching halt, the Modi Government will lose its momentum and merely go through the motions of governance for the rest of its second term.

Opposition to change has been a feature of democratic politics for long. In India, where change, in any case, proceeds at a snail’s pace, the anger is specifically directed at Modi who actually believes that he has the political mandate to push through larger changes. Modi threatens the cosy world of the status quo and those who benefit from stagnation.

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