Rediff.com  » Business » The twin challenges facing Modi

The twin challenges facing Modi

September 06, 2019 19:30 IST

If Manmohan Singh was hobbled by allegations of sleaze and a stagnant economy, Modi faces the twin challenges of high unemployment and an uncertain and potentially volatile situation in Kashmir, points out Amulya Ganguli.
Illustration: Dominic Xavier/Rediff.com

 

There is a curious similarity between the opening months of Narendra Damodardas Modi's second term and the closing period of Manmohan Singh's second term.

In 2012-2013 when the Manmohan Singh government was entering the final phase of its tenure, it was afflicted by what was known as policy paralysis.

To overcome this atrophied condition, the prime minister had called for rousing the animal spirits of the industrialists to infuse life into the moribund economy.

The present prime minister, too, has invoked the need for a dose of animal spirits to ensure that the economy is up and running.

In doing so, he has also showered praise on the wealth creators of the business world.

The pat on the back for the corporate sector was perhaps considered necessary because of the prevailing belief among entreprenuers, as expressed by one of their representatives, that the government seemingly trusts the bureaucrats more than the businessmen.

This supposed gap between the latter and the ruling class was also a feature of the Manmohan Singh government in its twilight period when the socialistic instincts of Congress President Sonia Gandhi and her kitchen cabinet, the Left-leaning National Advisory Council, prevailed over the prime minister's market-oriented policies.

If the NAC was the roadblock where the economic reforms were concerned six/seven years ago, the inward-looking, protectionist Swadeshi Jagran Manch, an affiliate of the Rashtriya Swayamsevak Sangh, plays a similar role today.

The fallout of these pressure groups has been to impede the economy.

Today's slowdown, therefore, can be seen as a replay of the earlier policy paralysis which brought down the Manmohan Singh government.

There are vital differences, of course, between then and now.

The Modi government has time on its hands unlike its predecessor and can take corrective steps.

Moreover, Modi is the master in his own house in contrast to Manmohan Singh who had to look over his shoulder at Sonia Gandhi for approval.

But it is also true that just as Modi had started off as a favourite of the business magnates who had expected him to go the distance in boosting investment and creating employment, Manmohan Singh, too, was expected to take up the unfinished task of reforms in 2004 and especially in 2008 when the Communists had walked out of his government.

But even if the branded comrades had left, the crypto-cCmmunists of the NAC had remained to throw spanners in the works of the reforms by complaiinng, as an NAC member, Aruna Roy, did, that Manmohan Singh was too preoccupied with growth.

In Modi's case, too, the earlier bonhomie with the tycoons died out when he didn't carry out any of the 'big bang' reforms as was expected of him and focussed instead on the so-called incrementalism of providing housing, toilets, electricity, cooking gas, bank accounts, etc.

This change of emphasis has been ascribed as a response to Rahul Gandhi's jibe about the Modi government being a suit-boot ki sarkar.

Unlike Manmohan Singh, however, who failed to capitalise on welfare measures like the right to food, right to education, and so on, Modi has been far more successful in selling his government's achievements in improving the lives of ordinary people.

He has also banked on the championing of nationalism for electoral success.

But, as the slowdown shows, the economy has remained stubbornly unresponsive to what The Economist has called the government's 'meagre fare' of sops with unemployment posing the main problem.

At the same time, it is clear that while Manmohan Singh went down tamely under the twin burdens of policy paralysis and corruption, the present government may continue to raise the nationalistic pitch to divert attention from the economic woes.

However, such tactics have their own unintended consequences.

For instance, if one such tactic -- the abrogation of Article 370 -- begins to expose the untenable nature of keeping a state in a near-permanent lockdown, then the government's image will take a hit.

In that event, the wide welcome that was accorded in most parts of the country to the 'bold' move to integrate Kashmir will suffer an erosion.

The government had succeeded in tiding over a similar dramatic initiative when it made 85 per cent of India's currency vanish into thin air.

But that was wholly an internal matter.

The events in Kashmir, however, have internatonal implications if only because Pakistan will not let the issue die down.

Morever, the lockdown in the valley has a human rights angle.

If Manmohan Singh was hobbled by allegations of sleaze and a stagnant economy, Modi faces the twin challenges of high unemployment and an uncertain and potentially volatile situation in Kashmir.

The government will be making a mistake if to extricate itself from the domestic difficulties, it looks to jingoism -- abrogating the no-first-use doctrine of nuclear weapons, integrating Pakistan-occupied Kashmir with Kashmir -- as the way out.

Amulya Ganguli is a writer on current affairs.

AMULYA GANGULI
SHARE THIS STORY