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Modi2 must focus on the economy!

May 17, 2019 11:17 IST

'If he were to ask me, I would tell Mr Modi that the real Congress legacy he has to undo is not Nehru's social and political philosophy -- which fits India perfectly -- but his daughter's economic philosophy,' says T C A Srinivasa Raghavan.
Illustration: Uttam Ghosh/Rediff.com

Illustration: Uttam Ghosh/Rediff.com

Whichever way the cookie crumbles, the next government will be formed by the BJP because, in the absence of a formal pre-poll alliance, the President is bound to invite the single-largest party.

Only a major upset bordering on a miracle would yield a different result.

Though this was always known, for a very short while there was some talk that Narendra Damodardas Modi would not be prime minister. But he has proved equal to the challenge and has squashed all such hopefulness.

Thus, for the last six weeks or so he has dominated the scene completely. Indeed, he has converted the 2019 general election into a three-way contest: Opposition v BJP v Modi.

 

Basically, what Mr Modi has been saying to the voter is 'Listen, I am your man, never mind the party or the candidate. Vote for me because I am the schizzle.'

It seems he has been able to convince enough voters that he is indeed der Mann. The result is that when the voter now presses that EVM button he is not voting for the BJP. He is voting for Mr Modi.

Even the RSS, which for a while was miffed with Mr Modi, has now had to acknowledge that he has outfoxed it. The story of how he neutralised the RSS will, I hope, be told one day.

It is similar to the way Indira Gandhi got rid of the CPI and Manmohan Singh of the CPI-M. The moral is don't push too hard.

Whether Mr Modi is emerging as a latter-day Indira Gandhi -- that 'me, me, me' thing -- is a good thing or bad thing can be left for political scientists. Most of them, like economists, have a 20th century mind and therefore an out of date approach.

But the fact is that this is the first time since 1990 that we have a fully personality-based choice at the central level. We are not choosing a party, but an individual, jumlas and all, to be prime minister.

At the state level it has always been that way. To think that it would be otherwise at the central level was just a pipe dream.

As the election has progressed I have also started betting that economy-wise, Mr Modi will act very differently. In NDA II he was focusing on micro stuff because he wasn't very comfortable with anything else. That was inevitable, given his background as a chief minister. He said in his interview to Akshay Kumar that a CM had to focus on the nitty-gritty.

But now we can expect a more self-confident, less blustery Mr Modi who will focus on structural reform. In the main, he will do what needs to be done to make India an efficiently competitive economy.

Remember: A competitive economy need not be efficient (China) and an efficient economy need not be competitive (all economies of the Western hemisphere).

Thus, if he were to ask me, I would tell Mr Modi that the real Congress legacy he has to undo is not Pandit Nehru's social and political philosophy -- which fits India perfectly -- but his daughter's economic philosophy, which even Dr Manmohan Singh was critical of -- that too as far back as 1983. He said as much in an interview to India Today's T N Ninan then.

The problem is this. Mrs Gandhi pretty much destroyed both India's efficiency and competitiveness by leaving a politically attractive but economically catastrophic legacy that focused -- supposedly -- on equity over efficiency.

That legacy, which was carried forward by every single government since then, has made all three factors of production -- land, labour and capital -- hugely costly in India. It is this that has left India so far behind its competitors, including little Bangladesh.

It is this legacy that Modi V2 has to undo.

The order in which the next government attempts this will be crucial. In 2014 Mr Modi tried to fix the land and labour problem first and failed.

As a result, he was unable to fix the capital problem as well because he was forced to borrow more, which left capital costly. The Indian economy's current problems are entirely because of this.

This time around, he must borrow less to leave more for the private sector and tackle the land problem afresh.

If this is done, the states will sort out the rigidities of labour laws on their own because if they don't they will not get any investment.

In 2014, speaking for the first time in Parliament, Mr Modi had asked for 10 years as prime minister. Now that he is likely to get them, he should focus on what his economic legacy is.

T C A Srinivasa Raghavan
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