Column: Where’s the real Narendra Modi?

Jul 04 2014, 01:52 IST
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SummaryThe government hasn’t been able to get it right on something as simple as offloading FCI’s grain stock

Is it possible, just possible, that prime minister Narendra Modi has deferred the decision on hiking gas prices because he believes it will fire up the Arvind Kejriwal campaign? So, why not let the elections in states like in Delhi, Maharashtra and Haryana get over before taking what could be unpopular decisions? This view is buttressed by the fact that after supporting the anti-industry Land Acquisition Act in the run up to elections, the BJP is now trying to fix it, though how is not clear since transport minister Nitin Gadkari has said he will not touch the rehabilitation aspect of it, which is the troublesome part.

If the reason for postponing the gas decision is true, given the number of elections India keeps having, we are truly in trouble as vital decisions will keep getting postponed. If, on the other hand, the government actually believes it can get even the state-owned ONGC to explore for gas in the country’s deep waters at $6-7 per mmBtu, we are in a different type of trouble!

To be fair to the government, asking it to come up with big policy decisions within such a short time is unrealistic, but part of the problem is the expectations Modi himself has fuelled. The larger problem is that several of the decisions that have been taken so far have been rank bad ones, and the fact that Modi still hasn’t completed his team suggests a government not sure of itself.

Begin with agriculture. Instead of disciplining states like Uttar Pradesh (UP) which have ruined the sugar economy, import duties on sugar were hiked dramatically to bail out mills—apart from what this will do to prices, the main impact has been to signal to UP that it is okay to play sugar politics by hiking the SAP to levels that bankrupt the industry. In the case of states like Punjab and Haryana which collectively charge extortionary mandi taxes of R7,700 crore a year, no attempt has been made to discipline them by linking FCI procurement to tax levels.

The inflation story is even more curious. No one expects miracles to a problem that has been festering for more than two years now, least of all in what almost certainly looks like a drought year. The best that people expected was an attempt to crash foodgrain prices, so that even if vegetable prices soared, the net impact would be muted. That

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