Forgot the mythology that Narendra Modi is an authoritarian set to impose dictatorship on India by other means. The land acquisition fiasco reveals him as frightened and indecisive, happier retreating than fighting to the finish. This is not an isolated example: he has repeatedly given priority to tactics over strategy, to political convenience over conviction.
Back in 2012, P Chidambaram was made finance minister by Sonia Gandhi to revive the economy. He cleared lakhs of crores worth of projects, tracked by a Project Monitoring Group. Alas, all these clearances did not yield actual economic take-off. The economy kept flailing, helping sink the UPA in the 2014 election.
On assuming office, Modi and his advisers held several meetings with state governments to identify the key bottlenecks. They concluded that the 2013 Land Acquisition Act of the UPA was a key hurdle: hardly any acquisition had taken place since its passage. Modi saw that if this continued, his own re-electability would be in question.
Rajiv Kumar, former director of the think-tank Indian Council for Research on International Economic Relations (ICRIER) and one-time secretary-general of Ficci, had estimated that even without any legal challenges or agitations, the new acquisition procedures would take four years to complete. Something drastic had to be done.
So, Modi came up with a new land acquisition Bill that looked tough and decisive. It substantially diluted the clauses relating to a social impact assessment and consent of 70-80% of people affected. It provided exemptions for 1 km on either side of railway and industrial corridors, rural infrastructure, affordable housing, and PPP infrastructure projects.
Such a tough Bill carried the obvious danger that Opposition parties would band together and denounce it as anti-farmer and pro-business. Additionally, Modi lacked a majority in the Rajya Sabha. So, getting its approval was going to be challenging. Nevertheless, Modi put his prestige and political capital behind this new law. At the time, it looked courageous and decisive. (Some called it authoritarian.) When, as expected, Opposition parties refused to cooperate, the Ordinance creating the new law lapsed.
Modi kept the new law going by reissuing Ordinances between parliamentary sessions. His ministers assured all investors, in India and abroad, that an Ordinance was legally as sound as any law. So, anybody wanting to invest should rest assured that the government would keep issuing Ordinances till such time as this was converted into a law. There was even talk of convening a joint session of the two Houses, in which the NDA would have a majority.
But this week, Modi put his tail between his legs and fled. He surrendered on all the key clauses to expedite land acquisition. Finance minister Arun Jaitley says any state wishing to pass a tougher state law on acquisition will get the government’s support for presidential assent. But when the PM views discretion as the better part of valour, will many chief ministers think otherwise?
This is not an isolated example of retreat. The first retreat came in the 2014 railway budget. This reiterated the UPA’s interim railway budget proposal to raise suburban fares. Yet, when the inevitable protest came from commuters, Modi retreated.
Fare is Foul
The fare rise was not simply trimmed but abolished, an act of spineless populism. Some liberalisers had hoped that Modi would convert the railways into a bunch of corporations. But the trade unions opposed this vociferously, and Modi has backed away from this structural reform. His government initially pledged to corporatise the port trusts. It seems have retreated on this front too, after trade union protests. The government is also vacillating on a new Indian financial code.
No doubt Modi is guilty of the deplorable bullying of critical NGOs like Teeta Setalvad’s. No doubt he has foisted people with dubious qualifications on sundry educational institutions. But many past governments have done as much or worse.
Back in the 1960s, a police commission member declared that, in practice, the police had four priorities. First, harass political opponents. Second, protect crooks in the ruling party. Third, ensure VIP bandobast. Fourth, if there was any time left, investigate crimes. Are Modi’s transgressions worse than this?
No, the problem is not that Modi is too dictatorial. Rather, he is vacillating and unwilling to fight to the finish on any difficult issue, more yellow than saffron. He presides today over apathetic sense of drift, defensiveness and lack of conviction. He seems happier coining slogans than in implementing tough decisions.
Now, the argument can be made that incrementalism is a better strategy than radical change when a party lacks a Rajya Sabha majority. Incrementalism can add up to something substantial in the four years that Modi still has to deliver.
But if Rajiv Kumar is right in estimating that the new land law will hold up most projects for four years, then Modi’s goose is cooked. The economy will continue to flail. Come the next election, his fancy promises of jobs for all will sound about as convincing as a tired Sonia Gandhi speech penned by Jairam Ramesh.