The Modi Model and the Ambassador Sarkar

Published: 17th May 2015 06:00 AM  |   Last Updated: 16th May 2015 11:00 PM   |  A+A-


May 25, 2014, was, effectively, the last day of the Congress-led UPA government. May 25, 2014, was also the day Hindustan Motors suspended/discontinued the production of its Ambassador cars. The Ambassador, chariot of officialdom for decades, is the apt pictograph for government—antiquated in design, big, sluggish and wastefully inefficient. For a decade, the UPA government perpetuated the symbolism of the Ambassador Sarkar.

On May 26, 2014, Narendra Modi and the Modi Sarkar were sworn into office. The exit of the Ambassador and UPA and the arrival of Modi combined into a riveting metaphor for expectations. Modi was seen as the “presidential” game-changer who could shrivel complexities to deliver transformation. Wowed by the marketing of ideas and blitzkrieg of slogans, voters disinvested from scepticism and invested in hope.

The challenge before Modi was to restore order and renew India’s pride globally. He restored order and, in a display of spectacular showmanship, renewed India’s image and global interest in India. The challenge before the Modi Sarkar was to revive the India Story—manage inflation, curb deficit, renew investment and job creation to spur growth.

How has the Modi Sarkar fared? The oracles of optimism present a parade of achievements. Lower fiscal deficit, higher share of revenues for states, renaissance in railways, corruption-free allocation of natural resources, the Jan Dhan Yojana, insurance and pension for the poor, revival of investments and job creation through Smart Cities and Make in India, and then there is the Swachh Bharat campaign.

Any assessment of a government must factor the intent, the direction and the translation of the same in action. The intent is well stated. The direction is fuzzy. The translation in action is patchy at best. There has been a cornucopia of announcements. The optics is that there have been a number of road shows

for the IPO, but the listing is yet pending. The idea of the Modi Model of transformation seems trapped inside the Ambassador Sarkar.

Yes, fiscal deficit has been contained —thanks to fall in crude prices and no thanks to cuts in public investments. Sales of cement—the lodestar for investment—grew slowest in the busiest season. Statisticians say GDP grew at 7.4 per cent, that India is the fastest growing economy. Yet, credit growth is slower than last year, corporate sales and profits are lower. WPI is negative, inflation is lower. But interest rates and home loan EMIs aren’t lower because banks are laden with bad loans of stalled projects. Big data is not translating into the feel-good factor that must follow.

In May 2015, the scent of scepticism is back in the air.

Embedded in the slogan of Minimum Government-Maximum Governance was the promise of a new template—the beginning of creative disruption and the end of status quoism. India’s many crises cannot be tackled by tinkering. There is a need for quantum change. That aha moment, of out-of-box solutions, of quantum change, is yet to be.

Jan Dhan could have had a tally of 750 million if only Aadhar numbers were converted into accounts and with India Post which has six times the reach of banks. This would have hastened the cash transfers regime to curb subsidy leakage. Reduction in fiscal deficit demands retiring debt. Why not transfer ownership of PSUs to a national investment trust, list it for public and use resources to retire debt? SEBs are bankrupt, 24x7 availability of power is detained. Stranded power projects are weighing down banks. Why not offer customers a choice, create a national distribution company? India has over 75 million hectares of fallow and barren land. Add wastelands—with PSUs, railways and Ordnance Factories. Why not monetise it—ask NABARD to set up a REIT Fund for a land bank which farmers can lease/sell to? The agrarian crisis is about output which cannot be resolved without market access. Why not use the `10,000 crore for start-ups to invite solutions for a national agri-perishables grid?

Quantum change is thwarted by structure, capacity and approach. The Prime Minister of India can scarcely be the chief minister of India—which is why Modi invokes the idea of Team India. Success, though, needs more than a moniker. The BJP is in power in 11 states. Why not decentralise policy and process—push states to compete. At an institutional level, the Modi Sarkar lacks the ministerial capacity to drive change. Frequently ministers seem to address optics rather than the issue. Ergo, the perceptions war—of tax terrorism and of being anti-farmer.

Sure, change is not a T20 match. The crux is the approach. The lure of the Modi Model was political entrepreneurship. The Modi Sarkar, however, seems dependent on risk-averse bureaucracy—which explains the shadow of incrementalism. Doing better than the UPA is hardly a worthy dare. The majority Modi engineered mandates him to remodel the Ambassador Sarkar.

Shankkar Aiyar is the author of  Accidental India: A History of the Nation’s Passage through Crisis and Change


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