The intolerance towards reforms is the real reason that will impact growth. While the Congress-led opposition parties must shun this in Parliament, PM Narendra Modi needs to tackle the apprehensions on the communal statements forcefully now.
There is an apprehension, not exactly fear, that if Prime Minister Narendra Modi led NDA government wins the Bihar assembly election and keeps on strengthening its political lead over the opposition parties, it will only embolden the intolerance in the Bharatiya Janata Party ranks, especially those with strong communal views, which will hurt growth prospects in the country.
It is also being projected that these elements, who are also trouble-spots for PM Modi even now and at times it appears that he has been reluctant to shut them up, will overpower him at some point of time.
If that happens, it will certainly be a big setback for those who believe that the ‘growth and progress’ promise of the BJP will be fulfilled by this government.
But, the problem is, if the BJP hardliners push their ‘intolerance’ to extreme to keep themselves politically relevant, those projecting this as a threat to the growth prospects are also doing the same thing.
Growth and investment pick up are dependent on the policies and reforms — goods and services tax (GST), liberal land acquisition norms, labour law reforms, higher public investment, savings on subsidies through Aadhaar-based cash transfers, easier clearance mechanism for projects, and tax reforms to end tax terror fear — and not so much on the statements of political leaders which are mostly directed to win votes.
Rating agencies like Moody’s and all those who are cautioning the NDA government on this issue must see the whole debate in this backdrop.
The hindrances and opposition to the reforms and business friendly policies — both from within the government and the opposition parties in Parliament — are bigger issues that can derail the chances of improvement in growth, and a deviation in attention from this aspect of the ‘intolerance’ debate is not what is going to benefit the economy.
So, if the ‘intolerance’ has to be tackled effectively, it has to be done in the way RBI Governor Raghuram Rajan has prescribed by saying that India’s tradition of debate and an open spirit of enquiry is critical for economic progress.
He is making a simple point which should be applicable in all kinds of intolerance — undue and unwarranted opposition to reform bills in Parliament, the intentions of the PM Modi government to keep the regulators and the whole government machinery on a tight leash, and of course, high-pitched statements of the political leaders.
By continuing with most of the UPA government schemes, including Aadhaar and MGNREGA, PM Modi has shown that he favours growth over scoring political points, and he will do well by extending this to his overall functioning.
Similarly, if the Congress party and other opposition parties are not understanding even now that electoral battle can’t be won with the help of just dole and jibe politics — they are treading a wrong course. It is the intolerance to reforms that is the real bane.