How well has Narendra Modi fared in two years? On the economic side, he has not been the radical reformer liberalisers hoped for. On the socio-political side, he has not been the communal ogre that many liberals feared. He has not delivered ‘achhe din’. Yet he has probably done enough for re-election in 2019. India is supposedly the fastestgrowing major economy in the world (7.6% GDP growth). This sits ill with falling exports for 19 months and an Index of Industrial Production (IIP) showing almost zero growth.
Some experts fear statistical flaws. An insightful exercise by economist Pranjul Bhandari suggests manufacturing growth may have been inflated 4.5% and GDP growth 0.8% in 2015-16. However, even an adjusted rate would make India among the fastest in a slowing global economy. Problem: it’s nowhere near fast enough to fulfill Modi’s pledge of good jobs for all. That explains spreading agitations of well-off castes for government job reservations, notably the Hardik Patel agitation in Gujarat.
In economic policy, Modi has successfully followed what Chief Economic Advisor Arvind Subramanian calls “persistent, creative and encompassing incrementalism”. Many Congress schemes have been rebranded and expanded. These include the JAM trinity of Jan Dhan Yojana, Aadhaar and mobile telephony, Swachh Bharat and Digital India.The only big bang attempt was on land acquisition, which ran into political hurdles and was abandoned. Modi’s greatest achievement is ending big corruption in New Delhi. Much of his supposed over-centralisation of decision-making in the PMO aims at checking bribes. Corruption continues merrily in the states and lower bureaucracy. Still, Modi’s no-favourites approach has been a clear positive.
He has privatised nothing, and avoided the promised corporatisation of the Railways and Port Trusts. The banking system remains government-dominated and used for financing sundry government schemes (including oft-disastrous public-private partnership (PPP) infrastructure projects). But efforts have begun to clean up bank books, check crony loans, and seize assets of willful defaulters.
Green Shoots Visible
Public investment in infrastructure has picked up. Road building has risen stridently. India is actually power surplus in many regions, though state-level subsidies for electricity remain ruinously high. Infrastructure remains sub-standard, but is not a binding constraint on growth. No prime minister has pushed as hard as Modi for foreign direct investment (FDI) or the improved ‘ease of doing business’. His relentless drive for maximising jobs has led him to dilute his party’s traditional wariness of foreign investment, to the dismay of the Swadeshi Jagran Manch.
Modi has wooed the Indian diaspora, including MNC chiefs like Google’s Sundar Pichai, Microsoft’s Satya Nadella, and Pepsi’s Indra Nooyi. Modi’s message to the RSS is that MNCs cannot be viewed as ‘white imperialists’ when their bosses are globalised Indians. Even the Tata group’s current chief, Cyrus Mistry, is an Irish citizen.
Modi’s job emphasis also explains his drive to improve ‘ease of doing business’. Thousands of rules and procedures are being streamlined unobtrusively but steadily. Modi has succeeded in making chief ministers compete to become businessfriendly (including in labour flexibility). The changes are not dramatic. But ‘pervasive incrementalism’ is adding up across all sectors. It can have a big, positive impact over five years.
His election campaign promised ‘maximum governance, minimum government’. He has done little on either count. All government services —police courts, administration education health — remain unreformed and dismal. Subsidies have been pruned, but mainly because of good luck in falling global commodity prices, helping slash the oil and fertiliser subsidies. Whether all subsidies will be pruned and replaced by cash transfers remains to seen.
Focus On Governance
Critics have accused Modi of propagating communal hate, killing beefeaters and jailing dissenters like student leader Kanhaiya. There have, indeed, been many condemnable communal incidents. BJP ultranationalism over Kanhaiya and Muslims refusing to say ‘Bharat Mata ki Jai’ were deplorable. The eagerness to ban all cattle slaughter and beef-eating was an attack on not just Muslims but on Dalits and low-caste beef-eaters as well.
However, the communal situation is not remotely as bad as in the Babri Masjid days. Modi does not and cannot dissociate himself from the lunatic Hindu elements the BJP has always harboured. He has often resorted to ‘strategic silences’ before condemning communal statements of his partymen. But ultimately he has said the right thing. Communal polarisation led the party to lose the Bihar election, and so was abandoned in the Assam election. The BJP no longer seems to view it as an election-winner. That is a positive development.
The saffronisation of many cultural and educational posts has eroded institutional quality. Yesmen are in favour more than independent thinkers like RBI Governor Raghuram Rajan. But the Congress was guilty of similar sins. The problem is actually worse in state governments.
All this falls far short of ‘achhe din’. Yet, despite many shortcomings, Modi has probably done enough to win re-election in 2019, although his majority may be greatly reduced. It is no mean feat in two years to have created a good chance to rule for ten.
Caveat: unexpected disasters have sunk many governments in their last two years. But right now, Modi can allow himself a smile.