I did not participate in the post-Budget reflections on TV. I declined all invitations, in part because it was not a novelty, and in part because I knew I would spend most of the time staring at the camera, mute and captive. I also declined because I acknowledged that I would most likely trot out superficial bromides to no avail and no impact. That is to day, the Budget is along predictable lines. The focus on agriculture, health, education and infrastructure had to be expected, given the onset of general elections. It is a mistake to have excluded energy from the speech (other than the familiar and politically “non-negotiable” promise to provide free/subsidised electricity and fuels to indigent households), especially in view of the hardening of oil and coal prices. The fiscal arithmetic looks stretched, the thrust towards “import substitution” is worrying, and everything will depend on the efficiency of implementation of the announced programmes (particularly those related to health coverage). I might have pointed to the accounting sleight of hand that enables the finance minister to claim the proceeds of the sale of one state-owned entity (HPCL) to another state-owned entity (ONGC) as part of disinvestment proceeds. Etc etc.
These were the reasons for declining before the speech. But during the course of the speech, I found a further reason for not going in front of the cameras. This reason had less to do with the specifics of individual proposals than the structure and presentation of the speech. It seemed to me that the approach was out of sync with the new world order of the 21st century, and that the finance minister’s speech reflected a disconnect between the nature of domestic policy formulation and the paradigmatic changes taking place across the world. I could never have communicated these somewhat inchoate thoughts in bite-sized television language. The anchor would, most certainly, have interrupted me and I would have felt frustrated. We have entered a new era—an era defined by explosive technology, instantaneous communication, “stigmatised capitalism”, unpredictable politics and existential challenges. The recently concluded gathering of global elites in Davos in Switzerland gave forceful expression to these developments.
Our Prime Minister kicked off that meeting by reminding everyone of the virtues of globalisation and open trade for goods and services. And the dangers of terrorism and climate change. He called for a collaborative global effort to manage and mitigate these existential risks. Other leaders followed with similar messages. Emmanuel Macron, Angela Merkel and even Donald Trump talked of the transformative changes heralded by technology, but also forewarned of the consequences to liberal values of a two-track world in which a minority acquired the relevant skills to move onto the track of prosperity, and the majority found themselves on the track to unemployment, irrelevance and despair.
This “new era” is not, however, reflected in the vocabulary of politics or the models of public policy. Global warming, terrorism and pandemics are problems that recognise no national boundaries. But the solutions to these problems are culled from the politics of nationalism. Politicians talk of the connected and common bonds of humanity in international fora. But faced with domestic pressures, they peg their electoral appeal on the narrow and ascriptive dividers of caste, class, ethnicity and religion. The fact is that leaders are struggling to find a new approach to reconcile the demands of the “new era” with the existing processes of politics and policy formulation. Most prefer to fall back on “old world” ideas and models in the hope, perhaps belief, that it will provide the compass to navigate emergent discontinuities. The French epigram “plus ça change, plus c’est la même chose” or translated as “the more things change, the more they stay the same,” captures well the current state of affairs.
I found myself reflecting on this disconnect during the course of the finance minister’s speech because of the exclusion of energy from his script. It is not that I expected energy to be included—it is too complex a subject to be covered in a statement on essentially the arithmetic of the government’s annual expenditure and revenue plans—but I did think that, given the criticality of this sector to the fulfilment of the Budget proposals, and more important the fact that this sector is in the throes of a near revolutionary change, the finance minister would dedicate a few sentences to, at least, alert everyone of the potentially strategic implications of these changes. That he did not, but spent instead 55 minutes on agriculture, health and education, and mentioned only en passant “new era” disruptors like cryptocurrency and blockchain, is what prompted me to wonder why, in a world overflowing with innovative and creative thought, political leaders and political processes are so out of sync with the “disruptive new era”. And what might be the social and economic consequences if leaders continue to settle for the “dubious compromises” of ideas that no longer inspire.
Why did energy trigger this thought process? It is because its narrative has radically altered. Fossil fuels remain, of course, the dominant source of energy. But the narrative is now about the transition to the non-fossil-fuel era. It will take a long time for this transition to be completed, but the fact that most of the developed world is focused on developing technology alternatives to the internal combustion engine and the millennial generation has a growing antipathy towards dirty fuels and are questioning the owner operator model of mobility suggests that energy management needs a different model—“new ideas”. I was hoping this would be acknowledged in the Budget speech, especially given our economy is entering its most energy-intensive phase and our environment is under stress.
Obiter dicta, I support the idea of holding simultaneous elections for the state assemblies and the central Parliament, even though it is conceptually flawed because it is a “new idea” and breaks with precedent. We need thinking that compels the development of new political, social and economic models.
Vikram S Mehta
Chairman & Senior Fellow, Brookings India