How do you uproot rootless wonders? This question has haunted the RSS since 2004. On Friday, the high priests of the Sangh Parivar anointed an individual as the solution for an institutional crisis and crowned Narendra Modi as the ‘Karta’ of its political entity. In one swoop, virtually the entire pantheon of revisionists was rendered irrelevant. At least for now. Unsurprisingly, there was bickering, the parade of ‘ifs’ and ‘buts’, and resistance from the entrenched. The choice before RSS was binary—polarisation or a multi-polar disintegration of the party.
For the jubilant cadre, NaMo—the preferred sobriquet—promises relevance. A polarising figure haunted by questions, Modi also presents the promise of a competitive model of growth and governance. Doubtless, NaMo has Modified the cult of crony politics within the BJP. The challenge for him is to find his voice to forge an ideological identity for the party. Can Modi rid the BJP of the tag of B-Team, of being a cohort of the Congress? Can he end the truce on crony socialism that sponsors vote-bank politics?
India’s political economy is essentially split in five quintiles/groups. The bottom three quintiles are occupied by those eking out a living and those struggling to exist. These, the voting masses, are vulnerable to the lure of exchange offers—entitlements for votes, a la political capital. The top quintile is occupied by the self-sufficient, and those who extract rent and fund the business model of politics. Sandwiched betwixt is the middle class—not entitled to entitlements and lacking the muscle to wrench rent—hurting the most from inflation, loss of savings, jobs, income and sliding growth.
India’s growth story is stranded in the quagmire of this political model. The quest for welfare must be backed by growth. Without growth, politicians will only distribute poverty. This thesis though is not an article of reigning faith. The current economic crisis is a product of politics. The cohabitation of corruption and high inflation fuelled by profligacy is the outcome of crony capitalism and crony socialism. Unless the model of governance is restructured and profligacy shackled, savings will fall further, investment will be an occasional tourist, and India’s growth story cannot be revived.
Modi’s calling card and lure has been his allegiance to growth and governance, albeit with caveats about socio-cultural context and history of entrepreneurship. The hosannas are not just about industry. Gujarat has promoted agricultural growth through investments in irrigation, assured power and technical advice to farmers. He has also inducted technology—use of satellite mapping for fishermen, for conservation and restoration of water bodies, promoted innovation in renewable energy. Gujarat has enabled the setting up of the first skills training university. And profligacy is not an accusation hurled often at Modi.
His party, however, it would seem, is in alliance with profligacy. It has been party to the enlargement of crony socialism—expansion of outlays with dubious outcomes. The BJP did not object to MGNREGS or its expansion. It did not question the loan-waiver in 2008. It failed to question the scope and timing of the Food Security Bill. It also voted for a land acquisition legislation that threatens industrialisation and could end up promoting the interests of politically connected aggregators. At least the Congress is unapologetic about populism, even if in the guise of inclusive growth. The BJP dissented on populism in TV studios and voted with Congress in Parliament.
Thus far, the Modi effect has not affected the thinking of his party. In any democracy, the contest is about ideas. The challenge for governments is to enable growth and balance the distribution of pain and gain. Fact is, on most fundamental issues concerning the political economy, the BJP holds a contextually convenient view. On FDI, it mostly echoes what the Congress said while in Opposition during the NDA regime. It has outraged on inflation but is yet to present an alternate view on subsidies. Would it ‘nationalise’ the Parrikar model on fuel taxes? When in power, the BJP drove an aggressive privatisation programme. In Opposition, it has been mute witness to the scandalous management of PSUs.
Modi has his task cut out. First, he must cure the party of its serious identity crisis. The BJP cannot mimic the Congress and hope to be the BJP. In the ultimate analysis, good governance is about efficient allocation of resources and equitable distribution of returns. It is true that growth sans democratic equity is not sustainable. It is also true that equity without growth is not sustainable. To be a real alternative to the Congress, the BJP must declare what it stands for.
Growth is not just about surplus and deficits. Growth is also dependent on governance. Modi has often spoken about minimum government and maximum governance. It is no secret that the largest departments at the Centre are those which are state subjects—rural development, agriculture, tribal welfare etc. Modi has also emphasised the need for decentralisation. Does this mean dismantling of the many proxy ministries at the Centre?
Modi has the opportunity to articulate a vision about the economy and about the structure of governance. He must get the party to subscribe to it and make a public offer to the voters. His allure to the young and the aspiring classes affords an opportunity for a reboot in economic thinking—from crippling entitlement to empowering growth.
shankkar.aiyar@gmail.com
Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change