Rational Expectations: Brand Modi can’t just be ‘not-Rahul’

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New Delhi | Published: December 17, 2018 4:23 AM

Instead of Congress-bashing, Modi must focus on what he has delivered & what he plans to—voters are more likely to like that.

rahul gandhi, pm narendrs modi, narendra modi, congress, bjpModi continues to promise to double farmer incomes by 2022, but this was always a dream. (PTI)

Even a rookie knows that you don’t promote your brand by running down the competition, yet prime minister Narendra Modi’s speeches have mostly been about the Gandhi family’s shortcomings, genuine or otherwise. With the electorate having reduced the Congree to a mere 44 seats in the last Lok Sabha election, it already has a view on the party; so why build up Rahul Gandhi into such a threat that the prime minister is solely focused on him?

Nor does it make sense to make tall claims in this day of twitter and 24×7 media. Former PMEAC Member, Surjit Bhalla, blamed the BJP’s loss on the ‘revolution of rising expectations’: People expect more from those who deliver (like Modi) and so (as it happened) vote against the party when this didn’t happen. But surely Modi contributed to this in a big way with his tall claims that looked patently incorrect? Why not, instead, focus on what he has done, and how much more he plans to do; and let his delivery so far be proof that he will deliver on the promise.

Modi continues to promise to double farmer incomes by 2022, but this was always a dream. Since nominal incomes of farmers have been rising by 11-12% per year anyway, doubling it in nominal terms has no meaning. But doubling it in real terms requires their real incomes to rise by 2.8 times the current levels which, as Icrier professor Ashok Gulati points out, requires overall GDP growth to about triple (goo.gl/WsT9yr) by 2022! Surely someone in the party would have pointed this out?

But 2022, the argument could have been, is several years away, what matters for now is only 2019, so let’s focus on that: hence the sharp MSP hike to ensure farmers got at least 1.5 times A2+FL costs. But surely Modi knew this was an empty promise given there is no procurement for most crops? So, did his officials promise him this would be done in all states? And if they did, how come there was no great budget provision for the money the farmers needed to be paid?

With market prices 25-30% below the MSP, farmers saw through the claim in no time. Indeed, this should also have warned Modi not to brag about how he had given the country a unified agriculture market through the e-NAM portal. Even if his officials didn’t tell Modi how much of the crop gets sold across the state, let alone across state boundaries, farmers know this; so each time he hears the claim, he knows it is a shallow boast. Farm distress is a major reason for the BJP’s showing in Madhya Pradesh and Chhattisgarh earlier this month.

Another source of farm income, exports, has plummeted from $42.6 billion in FY14, to $15.7 billion in April to October 2018, a growth of just 1.2% over the same period in 2017. And, apart from allowing lumpen self-styled gaurakshaks to unleash terror on Muslims, the campaign against cow slaughter ensured that even the legal buffalo trade got hit badly. Buffalo meat exports that rose 3.4 times between FY10 to FY14 have remained stagnant since Modi came to power; as a result, even dairy farming is that much less lucrative.

Ironically, while most analysts are praising KCR’s Rythu Bandhu income transfer scheme and saying this helped win farmer support in the Telangana election, this is something the Shanta Kumar committee on restructuring FCI recommended way back in January 2015! While the recommendations were never implemented—just around 5% of farmers benefit from the FCI-type procurement—Modi did well to come up with a crop insurance scheme. Yet, it was so badly implemented, it didn’t really help. Payments to farmers were made very late and the number of farmers fell to 3.5 crore in kharif 2017 versus 4 crore in kharif 2016, and the area covered dropped to 3.4 crore hectares from 3.8 crore hectares in the same period.

Given this, Modi should concentrate on fixing the problems, and moving towards Shanta Kumar/KCR-type income support; even if flawed, the SECC database can be used for income transfers; so why not do a successful pilot in one or two big BJP-ruled states so that this can be highlighted in 2019, and promise to extend this all over the country? If Modi is successful in rolling this out, the promise may get some traction.
Mod is on the backfoot when the opposition disses him for having promised to give every poor family Rs 15 lakh once he got back the black money stashed overseas. While Modi may not have actually made the promise, he has certainly alluded to it while his party made tall claims about the black money the Congress allowed people to stash overseas. But while this claim has fallen flat on its face, like the demonetisation one, surely Modi can rightfully claim his government has done wonders in disciplining defaulting industrialists who got away; the Insolvency and Bankruptcy Code (IBC) has catalysed the recovery of around `3 lakh crore from various default cases, directly or indirectly, since its inception in 2016. Of course, boasting about IBC may not be a good idea since the finance ministry’s demands—to get RBI to keep its February 12 circular in abeyance—will result in this getting diluted!

While getting into the 2019 campaign, Modi has to carefully craft his message for each audience. Middle-class India is upset that little has happened to fix education—the key to future success—so Modi needs to take some credible action here. On jobs, where few believe the official claims, Modi would do well to tone down the rhetoric—it is not possible to have the high jobs-creation claimed with the kind of poor consumption-spend we’re seeing; rural distress, too, would be lower if jobs-creation was so robust. Given the great success in DBT—`5,40,000 crore already transferred since Modi came to power—the electorate is more likely to believe Modi if he says this will be raised while cutting wasteful subsidies like those on fertilisers. In short, Modi needs to rekindle the dream, but this will work only if it seems credible.

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