1. Column: Why no applause for reform Modi

Column: Why no applause for reform Modi

The important has been replaced by the irrelevant; a consequence of BJP/RSS distractions on non-policy issues...

By: | Published: December 27, 2014 12:29 AM

Just look at the myriad of irrelevant controversies that the ostensibly popular Modi-led BJP has allowed itself to be dragged into over the last few months. First it was Teachers Day in September, then “love jihad” and non-Hindus as “bastards” in October, then Sanskrit requirement in November and now Good Governance Day in December. Good god, what can we expect in January?

Parliament was held up for several days, and no bills passed in opposition-ruled Rajya Sabha, because of some of these excursions by the Modi government. It has now come to pass that even when the RSS might controversially not be in the wrong, as on voluntary conversions, the opposition is able to stage it as the inevitable rise of communal discord, communal tension, or worse. (My article on January 4 will discuss the conversion controversy in detail.)

The BJP has literally no one to blame, except itself, for the rapid loss of “approval” that it is facing at the hands of the electorate. Of course, it is winning elections, but that is not because the people love the BJP more, but because they hate the opposition, especially the Congress, even more.

An analogy from discussion of economic growth rates, which was a favourite topic of the BJP and PM Modi, might help. Prior to the election (and even post!), Congress party leaders thumped their chest and said that India, growing at 5 %, was the second-fastest growing economy in the world. So look at what a fantastic job we have done, so fantastic that we should be elected for another term. The BJP retorted (and many of us agreed) that this reasoning was disingenuous at best, and downright stupid at worst. What was relevant was not the absolute growth rate of India, or any other country, but the departure of this growth rate from the potential. And given that even the Congress agreed that India’s potential growth rate was around 8.5%, the party had achieved the impossible by bringing India’s growth rate to nearly half its potential. The voters agreed and the Congress was sent hurtling towards only 44 seats.

The BJP has done fantastically well in the post-May assembly elections. But is this performance not “equivalent” to India growing at only 5%? Had the distractions with a communal flavour not been there, the BJP would have done a lot better than “grow at 5%”. The potential of BJP was to have at least 5-10% more seats in each of the state elections it has contested, including some seats in Jammu&Kashmir. With these victories, it could now go about achieving, and fulfilling, the much promised growth and governance agenda. And it could have honoured Vajpayee with greater eloquence and tribute than to naming December 25 the Good Governance Day. What are we to expect next—instead of New Year greeting cards, government officers will  be required to send a Hallmark card with the inscription “Wishing you and your family a Good Governance 2015”? What happened to the savvy marketing BJP team—waylaid by the RSS?

Warnings that this was happening, and that it was not in the best interests of Modi the PM, have not been absent. In a prescient article, Ravinder Kaur (The Indian Express, “Emboldened by Modi”, goo.gl/lpJ77D) had warned of the RSS land mines in Modi’s way: “Some who voted for [Modi] had set aside their apprehensions of a hidden Hindutva agenda, hoping that the development plank would remain centrestage…While not making a single misstep on social and secular issues, Modi has maintained a stoic silence on the dangerous pronouncements and actions of BJP ideologues…”

What is problematic is the replacement of the important by the irrelevant. There is a direct effect of these BJP follies—Parliament is held up, and bills are not passed. There is an indirect effect as well, and one that the Modi government does not seem to recognise, or appreciate. It is that the government is not credited with the large amount of economic-growth-related reforms it is doing right—and all because of the fringe elements in the party. It does not make any sense.

Let me just take one example of how people’s attention has been distracted, helped no doubt by Congress strategists and experts. Today, inflation is a third of what it was last year—from 11 % in November 2013 to 4.3 % in November 2014; for the WPI, the numbers are 7.6% and 0%, respectively!  This is attributed by many to global deflation (the same that has been in process for the last six years when the UPA managed to deliver double-digit inflation). A big lie—in the previous two years (2012 and 2013), the median developing country CPI inflation averaged 4.2%;  in India, the average was close to 10%.

But wait—Indian inflation is down because of Modi’s luck with crude prices. The oil price was stable in both 2012 and 2013 at around $ 100 (WTI)—the same time UPA inflation was raging.  But wait—Indian inflation is down because of Modi’s luck with international food prices. But international food prices in November 2014 were only 4% lower than in November 2013!

So, what has brought Indian inflation to 4.3%? As has been mentioned umpteen number of times in this column, the primary determinant of inflation in India is not what RBI does, but what the central government (the ministry of agriculture) does. The last minimum support price (MSP) increase by the UPA government, in March 2014, for the kharif crops, was 8.2% versus 6.1% in March 2013. The sheer audacity of the Sonia-led government to increase MSPs at such a large rate in March 2014 was, of course, only paralleled by their belief that inflation did not matter for votes.

The first  MSP of the Modi led government was in October 2014, and the order of magnitude was minus 0.3%—no typo there, minus 0.3 percent—the seventh-lowest change in 38 years. Of course, the fact that food inflation is down this year is not because of the rabi crop MSP for 2015. This policy will have its lowering effect next year when inflation is likely to be close to 4%, regardless of what RBI does (RBI, are you listening?).

Inflation is declining in 2014 because of “only” a 6.5 % aggregate (kharif and rabi) MSP increase in 2013 compared to a 14.4 % increase in 2012! In addition, inflation is declining because of several decisions the Modi government has taken regarding the pricing and marketing of food, and especially the release of foodgrains from the excess food “reserves” in the government’s possession.

But the BJP not only does not get any credit for reforms and improving economic climate, it gets blamed for not doing anything for the economy! The reality is that  inflation is down by a third, labour reforms have begun, we are very near the approval of the very important fiscal GST legislation, and ordinances on economic reforms relating to coal and insurance are already here. The last two could have become legislations—but both BJP follies and opposition-for-the-sake-of-opposition intransigence ensured that that was not the case. By the way, while several hugely negative economic policies occurred under UPA, can any of the Congress naysayer experts point to a single positive policy initiated by the Sonia-led UPA in their 10 years in power?

The BJP must feel that it can’t do anything right with respect to economic policy. It must feel like the son for whom the mother bought two shirts for his birthday. The son obediently put on one of the shirts to show, and thank, his mother, upon which the mother snorted and complained, “You didn’t like the other shirt?!”

Surjit S Bhalla

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  1. K
    Kiran
    Dec 28, 2014 at 3:09 pm
    Point is, do we need "good governance" day or should citizens feel the impact / effects of good governance ? These days, there is more value to symbolism than substance. Youth may give importance to symbolism, but the middle age and older potion will value substance over symbolism.
    Reply
    1. S
      sikular rober
      Dec 27, 2014 at 7:15 pm
      all these scamgresi loteraas such as worst goverence model maker goggoi,land maafias hooda,robber vadra,italian mmafia maino,coalmohan sink,minig maafia gahlott,ambullance scamstter pilot ,sportss maafia shila,kalamaadi,keralas solar scamsster chandy,bar scamsster maanis 24 x 7 loots have turned all the aam aamdi sof our banana republic into begger aadmiss..its high time to send these guys in tihar immediatelyy....
      Reply

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