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'Modi is taking a big risk'

By Archana Masih
Last updated on: July 20, 2015 11:52 IST
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'When he first came to office, my belief is that the PM's reading of the landscape was that, with a vanquished Congress and fragmented Opposition, he was looking at least at two terms in office. This reading perhaps allows for a more cautious, gradual approach.'

'It was only a matter of time before the government was forced to come face-to-face with a serious corruption scandal. This is not a commentary on the BJP, but a statement about India's political economy.'

'There is growing concern about the government's commitment to freedom of expression, religious tolerance, and an independent civil society. Thus far, the positive movement on strategic and economic matters has crowded out these concerns, but they are lingering beneath the surface.'

Prime Minister Narendra Modi

Milan Vaishnav, an associate in the South Asia Programme at the Carnegie Endowment for International Peace for the past three years, carefully assesses the Modi government as it gears up to face a stormy session of Parliament.

With his research focussed on India's political economy, Dr Vaishnav examines issues such as corruption, governance and electoral behaviour.

The son of Gujarati parents who emigrated to America four decades ago, his upcoming book on Indian democracy will be published by Yale University Press and HarperCollins India next year.

A former professor at Columbia, Georgetown and George Washington universities, Dr Vaishnav carefully assessed the Modi government in this in-depth e-mail two-part interview with Archana Masih/

How has India's perception abroad changed under the present government?

On the whole, India's image abroad has certainly rebounded under the present government. Prime Minister Narendra Modi has injected a new dynamism in India's foreign policy, both in the region as well as with the great powers.

At least rhetorically, the government has been spreading the message that India is again 'open for business' and wants to create an investment climate that will facilitate higher growth.

After one year, however, I think foreign governments and investors are starting to raise questions about the gap between the government's rhetoric and the ground realities.

Nevertheless, there is a sense that economic policy is generally trending in the right direction, if not at a slower pace than what many had hoped for.

When it comes to social issues, namely the government's commitment to freedom of expression, religious tolerance, and an independent civil society, there is growing concern. Thus far, the positive movement on strategic and economic matters has crowded out these concerns, but they are lingering beneath the surface.

There has been a lot of debate in India recently about alleged improprieties and alleged corruption against BJP leaders. Do you think the BJP should have been more forthright about addressing these allegations and risks resembling the Congress that was plagued with corruption and scams?

It was only a matter of time before the present BJP government in Delhi was forced to come face-to-face with a serious corruption scandal. This is not a commentary on the state of the BJP, but a statement about India's political economy.

Given the infirmities in India's institutions of governance and the amount of discretionary authority vested within the bureaucracy (and, by extension, their political masters), it was only a matter of time.

This would have been the case with any government, Congress, BJP, or otherwise.

But the blowback the BJP is experiencing at the moment is a reflection of the sky-high expectations Indians had about the Modi government, expectations it has had a hand in ratcheting up -- dating back to December 2012, when Modi's unofficial campaign for prime minister began.

Obviously when you portray yourself as the clean, upright contrast to the corrupt, venal incumbent -- you have a lot to live up to.

We can argue about whether the frenzy taking place is fair or not, but the BJP government has not acquitted itself well over the last month in terms of how it has handled the allegations.

Again, we see a PM who is reluctant to use his impressive rhetorical skills to speak publicly about recent events. BJP spokespeople have offered rebuttals ranging from 'The Congress has its share of skeletons in the closet' to 'We are still less corrupt than they are.'

Both of these things might be true, but the BJP did not campaign for 272+ on the basis of 'Vote for us. We're not quite as bad as the alternative.'

After making a commitment to the electorate that neither will he indulge in corruption or allow his ministers to do the same, there has been a silence from the prime minister. Does this not send a wrong signal? Or is the PM well within his right to keep a distance?

I am of the view that the PM does not have to address every allegation under the sun. But when there are serious allegations that place the credibility of your government at risk and that cast doubt on the ability of Parliament to function during the upcoming monsoon session where the fate of several critical bills hang in the balance, it is time to speak up.

The PM is a gifted political communicator -- most likely the best in India today. Whether it is condemning majoritarian statements by BJP or Sangh officials, clearing up allegations of impropriety, or batting for essential, but politically difficult reforms, it would be nice to see the PM use his bully pulpit more often.

Leading political commentator Pratap Bhanu Mehta wrote recently that Mr Modi's government's credibility seems to be at risk due to corruption, communalism and dissent. Has the sheen worn off the Modi government?

The sheen has worn off, but it was going to wear off sooner or later. This is part of the rhythm of democratic politics. This is why so many commentators, scholars, and analysts have been making the case that the government should have identified 2, 3 difficult, but truly transformative policy changes and tried to execute them within the first 12 months.

This is the lesson of democracies around the world. To quote Rahm Emanuel, US President Barack Obama's first term chief-of-staff, 'You never want a serious crisis to go to waste.'

You could argue India was experiencing a crisis when Modi took over and he had a window to get some big things done. It inevitably gets harder as time goes on because politics is an inherently uncertain business. You have a surprise election loss in Delhi and a fierce battle brewing in Bihar, a bad monsoon, and oil price shock -- there are a million contingencies that can conspire to derail your agenda.

But, at the end of the day, the PM has a very different, contrasting hypothesis about political capital: He believes he and his government will gain strength over time.

When he first came to office, my belief is that the PM's reading of the landscape was that, with a vanquished Congress and fragmented Opposition, he was looking at least at two terms in office.

This reading perhaps allows for a more cautious, gradual approach. But he is taking a big risk in my view.

Last year, at this time, it was widely believed that Mr Modi will win not only a second but a third term as PM. Hasn't that feeling ebbed considerably?

It is hubris for anyone to think, at the outset of a first term, that there will be another term or two in the offing. A year after the 2014 election, politics has gotten more complicated. This is the natural course of things.

We are seeing a Congress stepping up its attack, though we should not lose sight of the fact that it remains on electoral life support.

The regional parties, including many who belong to the NDA coalition, are flexing their muscles now that the BJP has been taken down a peg or two. But it is still early days. If we see an NDA win in Bihar -- we'll again see headlines of 'unbeatable Modi' and people speaking of this as a positive, 'watershed' moment for his government.

The prime minister's personal credibility and rating remain intact. How has he been able to insulate himself from the situation around him?

There is no other politician on the Indian scene today who projects the kind of leadership or possesses the political gifts as Modi -- certainly no one who is operating at a pan-Indian level. This is not a partisan statement, but my reading of the landscape.

One can argue that Modi may not be using his skills for the right purposes or that, when push comes to shove, he is oddly absent. Those are legitimate critiques. But one of the lessons of the 2014 general election is that Indian voters are looking for leadership, something that they believed was sorely lacking with the UPA government, especially in their second term in office.

Given the enormity of the domestic challenges India faces and the newness of the government, voters seem inclined to give Modi some room to run. This won't last forever, of course.

One of the BJP's election slogans was 'minimum government, maximum governance.' How has the Modi government fared as far as governance is concerned and what makes the Modi PMO different from its predecessors?

The government took several steps early on to streamline administration, such as abolishing the Planning Commission, scrapping the Groups of Ministers and Empowered Groups of Ministers concepts, and using biometric authentication to check attendance of central government bureaucrats.

The PMO, of course, is far more centralised and commands much more power in the policymaking apparatus than in the days of the UPA. But, it is not clear -- at a fundamental level -- that the political economy of reform is all that different with this government.

Despite Modi's campaign rhetoric that 'government has no business to be in business,' the public sector remains a dominant player in many lucrative sectors.

Finance Minister Arun Jaitley has made promises of 'strategic disinvestment' (a euphemism for privatisation) but these remain promises for now; successive Indian governments, including this one, have failed to live up to ambitious disinvestment targets.

The government has spoken of the need to dramatically improve India's investment climate, yet uncertainty prevails on many fundamental issues, such as tax policy.

On higher education, the government has not broken with the decades-old tradition of intervening where it does not belong.

Does this mean nothing has changed? Not at all. The government should get credit for pushing forward with the Aadhaar-enabled Direct Benefits Transfer scheme for subsidies, decontrolling diesel, raising FDI caps in sectors like defence and insurance, and increasing financial devolution from the Centre to the states.

But, to use the government's own rhetoric, we are seeing 'creative incrementalism' at work, not a sharp structural break.

The government has launched several initiatives, like Digital India; Make in India; Swacch Bharat etc -- have the announcements been able to keep pace with implementation?

These high-profile initiatives serve three purposes. The first is essentially public relations: The Modi government is trying to reset the narrative of how India perceives itself and how others perceive India. This is largely symbolic, but that does not mean it is unimportant.

The second is to create a social movement, with campaigns like Swacch Bharat, to try and mobilise citizens to take private action where the government finds it difficult or impossible to accomplish change on its own.

Take an issue like the subsidy on cooking gas. The government could lower the cap on the quantity of subsidised gas for undeserving households. Instead of relying on this remedy, however, the government has launched a media campaign to exhort people to give up the subsidy voluntarily.

To its credit, it has also begun switching over to direct cash transfers for LPG subsidies, which does tackle the issue of 'ghost' beneficiaries.

The third purpose is to use the government's core policy instruments -- like taxation, spending, and regulation -- to shape developmental outcomes. Here is where it is difficult to identify the new policy initiatives that can overcome the historical barriers that have prevented India from developing a large manufacturing sector or addressing the problem of open defecation and filth more generally.

This is where announcements have outpaced actual implementation.

Amitabh Bachchan takes part in the Swach Bharat Abhiyaan.

Have these schemes been more about photo ops and slogans rather than execution, awareness and follow up? Or is it still early to expect these schemes to gather momentum?

I do not think these schemes are purely about photo ops. When it comes to assessing intent, I think the government would genuinely like to address real shortcomings that have hampered India's development.

The issue is that there has been a desire to announce initiatives without necessarily having done the necessary homework and preparation to execute them, and without developing the right policy instruments that can be deployed in pursuit of the objective.

As such, there is a tendency to 'project-ise' everything, an impulse further enhanced by the centralisation within government and, perhaps, the PM's own proclivities.

So for an issue like open defecation, there is a political imperative and mandate from the top to do something. So the government ramps up toilet construction. Now, more toilets are surely needed in India, but when survey evidence tells us that 40 per cent of rural households with access to toilets prefer to defecate in the open, toilet construction may not be the binding constraint.

There should be a greater relative emphasis, instead, on effecting behavioural change. But in an effort to move quickly, and with the instruments it has readily available, the government has focused on what it can build, count, and easily monitor.

Images: Top: Prime Minister Narendra Modi at the India-China Business Forum in Shanghai, May 16, 2015. Photograph: Aly Song/Reuters.
Bottom: Bollywood superstar Amitabh Bachchan takes part in the Swach Bharat Abhiyaan.

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