So, it’s now official and no longer just an Opposition diatribe against the government. India’s economy is not shining. There can be varying views on whether the clouds will vanish soon or gather further into a storm and cause extensive damage. If we leave aside the mundane issues that were skilfully introduced into the public discourse to deflect criticism in the last three and a half years, this is perhaps the first time that the government is finding itself on a sticky wicket and challenged to offer a coherent explanation.
The tragedy of Indian politics is that comparisons are always made with the immediate past, in the current instance with the track record of UPA 2, but that doesn’t hold water. Finance Minister Arun Jaitley went to the extent of trashing even the earlier NDA regime— forgetting the fact that he was a member of that regime too— and crassly attacking the motive of his predecessor Yashwant Sinha. According to him, NPAs rose to 15 per cent when Sinha was the FM during 1998-2002 in the Atal Behari Vajpayee government and, therefore, his criticism of the current state of affairs merits no attention. So, was the government of that day fooling the people when it embarked on the India Shining programme ahead of the elections—which it eventually lost?
Much of the present criticism against the government, whether on demonetisation or GST, could have been avoided if only the powers that be had acknowledged the difficulties involved up front. Insiders say the government was advised to put in a series of other measures before demonetisation was unleashed. But that didn’t happen.
In the face of official data coming out into the public domain, even right wing economists are now acknowledging that demonetisation was, no doubt, a good idea but it should have been well thought out and implemented properly. And that the government should have been frank enough to say that the pain is going to last longer but it should still be endured keeping the long-term benefits in view. But we were told then that it was just a matter of standing in queues for a few weeks and everything would be fine soon.
Ditto with GST, which was supposed to be a single-tax regime but eventually ended up with multiple slabs and left almost everyone in a state of confusion thanks to the complexities. The narrative is the same. A good measure that indeed required to be implemented, but badly executed. Surely we can’t blame UPA 1 and 2 for GST? As a senior political leader put it to me, any measure implemented by any government will bring some political benefit to the party in power. But to come up with grand economic ideas just to derive political mileage may prove to be counter-productive.
Jobs are shrinking, let alone 1 crore new jobs being created a year as promised. The value of stalled projects has crossed `13 trillion and private sector investment is at a 13-year-low. And, for the first time since this government came to power, one can notice a sense of disappointment on the street. But this is just the beginning. The prime minister still remains a great communicator. What is needed now is to make the system work so that communication is matched by performance.
In particular, the damage done to the small and medium segment of business needs to be repaired urgently. This section straddles both the formal and informal economies, so any data on the distress caused to entrepreneurs and workers alike is likely to have been under-reported. The government cannot afford to continue to take a guesswork approach to addressing this distress.
Having evolved from single-party rule to coalition politics, India is now poised to move towards a two-party system with fringe players arranging themselves around the two poles. The drift of politics certainly hints at a future polity in which the BJP will lead the right wing and the Congress occupies the left-of-centre space.
A film actor, dreaming of launching a new political outfit in a southern state and hoping to align with the BJP, almost went into a state of shock when two top-ranking leaders of the saffron party made it clear to him that it’s a pipe dream. Mincing no words, the actor was told a better course would be to join the BJP lock, stock and barrel. The reason they advanced was that the mushrooming of more regional parties is not an ideal situation—the fight has to be between the two principal players. A similar suggestion was reportedly made to a prominent opposition leader in Andhra Pradesh when he met up with BJP leaders—don’t look for an alliance, merge the party.
The thinking fits in with what we have been seeing in recent years: a carefully crafted strategy to reduce the political space currently occupied by the likes of Mayawati and the Yadavs in UP, Arvind Kejriwal in Delhi, Mamata Banerjee in Bengal and Naveen Patnaik in Odisha. By aligning with the BJP, Nitish Kumar has, in any case, done damage to himself without troubling anyone.
It is now common knowledge that even the BJP’s regional allies are not comfortable, with attempts being made to undercut them. The Shiv Sena loses no opportunity to hit out at the BJP and thereby keep its options open. More seasoned players like Chandrababu Naidu in Andhra Pradesh are quiet for now. As one who rubbed shoulders with the high and mighty in Indian politics and propped up a coalition at the Centre, Naidu is not likely to be happy with the kind of treatment New Delhi is meting out to him.
With the Communists slowly but surely vacating their space in different states—no signs of revival in Bengal and a belligerent BJP encroaching on their turf in Kerala and Tripura—it would not be surprising if the Congress seeks to expand into space on the left wing. In a way, such a shift would suit both the BJP and the Congress in the long run, though, as things stand today, an immediate revival of the latter party is a Herculean task despite the fault-lines opening up in the BJP regime. The conclusion that Rahul Gandhi now appears a bright prospect compared to Modi, as some columnists have put it, perhaps stems more from malice for the prime minister than any real hope in the Congress vice president.
The Congress needs to reinvent and restructure itself to recover vigour. To do that it has to evaluate how necessary its culture of dynasty is for its well-being. Is it really true that the Congress cannot function unless it is led by someone from the Nehru dynasty? When that question came up in the post-Narasimha Rao years, its answer was to seek refuge in the dynasty. If that question were asked again now, what would its answer be? Does it have the stomach for the question at all?
G S Vasu
Editor, The New Indian Express
Email: vasu@newindianexpress.com