Modi: Course correction needed

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Updated: December 10, 2014 1:37:42 AM

Time for Modi to be the Modi the Indian polity voted for

The Modi government is only six months old but it is quite clear that a structural transformation of the Indian polity, and economy, is underway. Reform of labour laws was a favourite talking point for decades, if not a century, and remained just that. Now, there is significant movement with one state, Rajasthan, actually obtaining a presidential go-ahead to diverge from the onerous central labour laws. The Independence Day speech marked a significant, and desirable, foray into the social areas of discrimination against the girl child and sanitation. Later, the cleanliness campaign was launched—again, a much talked about subject earlier. Now, some long awaited progress.

India’s image abroad has improved considerably. The image of the prime minister has improved manifestly at home. Modi is a person capable of taking hard decisions, and acting decisively in national interest. All this is showing up in electoral results. Modi’s BJP is winning in regions not thought conceivable just a few months ago. All in all, remarkable progress since May 26, and enough evidence to convince anyone that more has been done in the last six months than in the last two decades.

Which is why the disappointments with the Modi government hurt. These regrettable disappointments have been in both the social and economic sphere. Perhaps the biggest setbacks have been due to the Hindutva (or is it RSS?) agenda being pursued rather vigorously in education and “culture”.

That Sanskrit should be an option in government schools is not being debated. That it should be a compulsory third language is a matter of concern, and much debate. How can Modi, the moderniser and mind-set changer, suggest and implement a policy for the mandatory learning of a dead language? If making the learning of Sanskrit compulsory is not going back to the dark ages, then what is? Do we know of a single country where a parallel dead language, Latin, is compulsory?
Smriti Irani, the Union human resource development minister, reacted to the questioning of her policy of making Sanskrit compulsory in government schools by claiming that the media was distorting the facts. (What would governments do if they did not have the media to kick around?) She claimed, and this seems sensible, that she is committed to consulting, and receiving inputs, from the primary stakeholders in the education process, i.e., the teachers and parents of students in the affected schools across the country. Can Irani please enlighten us with the data so collected? What percentage of the parents want their kids to compulsorily learn Sanskrit? If a majority of the parents want this to happen, then make Sanskrit mandatory according to the regional recommendation; if not, then can we revert to the status quo ex-ante? Must everything that the Congress did, change? To what purpose?
And what does external affairs minister Sushma Swaraj mean when she demands that the Bhagvad Gita be declared a “Rashtriya Granth”, or the national book? Given the foreign policy successes notched by PM Modi, is she feeling left out from the public eye? And how many national books can a multi-religious country like India have? The Quran, the Granth Sahib, one Betrand Russell book for the atheists, one for the agnostics?
Are Irani’s Sanskrit and Swaraj’s national book inter-related to the Hindutva elements? If so, wasn’t Modi’s appeal meant to transcend such narrow non-national, fundamentalist agendas? How will Sanskrit and the national book help provide education and/or create jobs for the poor? While on the subject of the poor, what sense does it make to defend the ministership of Sadhvi Jyoti? Can this reservation be justified?
This brings us to the primary reason that Modi was voted in. While the PM seems to grasp what is required, the same cannot be said for members of his party or the bureaucracy. Starting with the Budget, it has been the case that tentative, and right, forward steps on the economy have been taken, only to be accompanied by regressive ones (think Congress!). For example, can the Modi government, or commerce minister Nirmala Sitharaman, explain exactly what India gained from the WTO fiasco? How was the eventual deal signed different than what was on the plate in Bali?
And there seems to be a lack of decisive leadership on matters related to the economy. There is a disinvestment campaign on to help reduce the fiscal deficit. That is good; the bad news is in the manner of implementation of the good. The government has just sold some shares in SAIL and plans to sell shares in Coal India, ONGC, and NHPC for a revenue mop-up of R43,425 crore.

Not as publicised, especially by the government, is its ownership of the following amounts (in market value) of shares in ITC, L&T and Axisbank—R35,000 crore, R12,000 crore and R16,000 crore respectively. A total of R63,000 crore which is exactly what the government needs!

How did the government come to own shares in a tobacco company? Because long ago (in the 1990s) the government guaranteed a 16 % return to buyers in the government-owned “mutual fund” called Unit Trust of India. Well, the guarantee went bust—as all guarantees on speculation are bound to—and the taxpayer (and the government of India!) was left with the shares of the companies in which UTI had invested. Some 16 years later, the government still owns a large stake in the tobacco and hotels company called ITC.

I have asked several people as to why the government is not selling shares in ITC—a healthy disinvestment gift of R35,000 crore. They all shrug their shoulders, say they don’t know, and then, wink-wink, state: the government does not want to sell ITC for the same reason that it does not want to sell Air India or Ashoka Hotels. It is the bureaucracy (and politicians), stupid.

No one thought that a PM like Narendra Modi would be dictated to by the bureaucracy, but this is likely what is happening. Regarding Air India, the Modi government has formed yet another committee to look into whether it should be sold or not. Haven’t enough committees been formed on the subject? What new does Modi intend to learn from yet another committee report? To the best of my knowledge, selling Air India does not require Lok Sabha approval, let alone the approval of an opposition-controlled Rajya Sabha. Why doesn’t Modi just do it?

Now back to the wink. A suggested explanation for the Indian government (read that as politicians and IAS bureaucrats, plus others) not selling Ashoka or ITC is that they gain enormously from “kickbacks” in the form of discounted or free rooms, or discounted or free dinners, or discounted or free marriage parties. For those not knowing, more than 54% of ITC revenue is not from tobacco.

Modi seems to have been captured by the bureaucracy; unfortunate and entirely unnecessary. Nor should he be beholden to narrow agendas of Hindutva, RSS, or the love-jihad brigade. So when can we expect to see the Modi we elected, in economic and social policies as we are seeing in foreign policy?

The author is chairman, Oxus Investments, and a senior advisor to Zyfin, a leading financial information company. Twitter: @surjitbhalla

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