It has taken more than three years for Narendra Modi to realise that a presidential style of governance is not suitable for a country of India’s size and complexity. The Prime Minister may have found it easy to preside over Gujarat’s destiny with his personalised style of politics where he was a cut above the others in the government and party. But India is different.
Hence his decision to set up an Economic Advisory Council to assist him in the framing of policy instead of pursuing an agenda in accordance with his own instincts and with inputs from the Finance Minister and the Chief Economic Adviser.
If anything substantiates the dire prognosis of former Finance Minister Yashwant Sinha of the Bharatiya Janata Party (BJP) on the economy, it is the roping in of experts from outside Modi’s charmed circle. What it also shows is the non-fulfilment — at least for the present — of the expectation of “vikas” which was Modi’s trump card in 2014. Ironically, one of the reasons for the hopes turning sour is another of Modi’s purported trump cards — demonetisation — which, along with the clumsy rolling out of the Goods and Services Tax (GST), is now being held largely responsible for the current economic woes.
It is obvious that if the government had a team of experts earlier who were not overawed by the Prime Minister, then there would not have been any demonetisation if only because it was a step guided more by politics than economics.
The objective of the hugely disruptive step was to show Modi’s resolve to tackle the problem of black money in view of the government’s inability to deposit the promised Rs 15 lakh in every bank account by busting the parallel economy. As a political initiative, demonetisation was a success in the weeks immediately after its announcement since the Prime Minister is generally widely trusted and large sections believed that the hoarders of illegal funds were running for cover.
But it was a short-term gain, for the economic downturn has shown that there’s more to governance than political showmanship. As a result, the one-step-forward of the demonetisation has been followed by the two-steps-backward of a tacit admission that it takes more than one person to run a government, no matter how energetic he may be or how impressive an orator.
However, the pitfalls of an individualistic style have been evident earlier too. For instance, Modi realised within a year of assuming power that a pro-capitalist image does not sell well among the ordinary people for whom businessmen are associated more with profit than popular welfare.
It is not surprising, therefore, that the Prime Minister’s recent endeavours have been to project himself as pro-poor in the aftermath of Congress Vice President Rahul Gandhi’s jibes about the government being a “suit-boot ki sarkar”. Modi also decided to drop his plans to amend the land acquisition law enacted by the previous government because it was felt that he was tilting too much in favour of big business.
This habit of adopting new outlooks has been seen in the demonetisation episode as well, which is now being presented as an exercise in digitalising the country’s financial transactions and not a drive against black money. However, all these twists and turns might not have led to the formation of the Economic Advisory Council if the sinking growth rate had not made the government jittery.
Besides, several other problems have cropped up to exacerbate the sense of unease in the government and the BJP. The caution sounded by the Rashtriya Swayamsevak Sangh (RSS) about the murmurs of disquiet among the people must have also enhanced the feeling of anxiety in the saffron camp.
Among the main causes of worry is the absence of jobs, coupled with the State Bank of India’s view that the economic slowdown may not be a “transient” phenomenon and is certainly not a “technical” glitch, as BJP president Amit Shah has said. The phenomenon of jobless growth has changed, therefore, into one of few jobs and hardly any growth. However, as even a pro-BJP economist pointed out, an economic council will be unable to suggest the possibility of an immediate turnaround since its panaceas will all have long gestation periods.
The so-called Big Bang reforms to introduce buoyancy in the economy and boost public confidence are also out because the government has never tried it before and is unlikely to do so when the general elections are less than two years away and several crucial state assembly polls are due next year. Besides, Jaitley’s proposed Rs 50,000 crore ($7.6 billion) stimulus may undermine the target for curbing fiscal deficit. The scene is not unlike what happened towards the end of Prime Minister Manmohan Singh’s tenure when he spoke of reviving the “animal spirits” but to no avail.
The economy is not the government’s only cause of concern. It was an unfortunate coincidence for the BJP that students went on the warpath in Banaras Hindu University just when the party was holding its National Executive meeting and Modi was in attendance in the city. The unrest drew attention to the fact that the BJP’s student wing, the Akhil Bharatiya Vidyarthi Parishad (ABVP), has lost several student union elections recently in a demonstration of how the youth was getting disillusioned with the party.
For the BJP, 2014 has never been farther away.
(Amulya Ganguli is a political analyst.)