Boosting economy to bridging divide, PM Modi has his task cut out

As Prime Minister Narendra Modi takes charge for a second time, after a long, divisive and gruelling election campaign, it is time for India’s political leadership to shift gears and turn on their governance lens.

Elections are critical to sustaining democracy. But the country has been in election mode for close to two years now. It began with the Uttar Pradesh assembly elections of 2017, and after a brief interlude, moved to the Gujarat assembly polls at the end of that year. Last year was punctuated by the Tripura, Nagaland and Meghalaya polls, followed soon after by the elections in Karnataka. After a brief lull, attention shifted to the heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh. In each of these states, the Bharatiya Janata Party (BJP) institutionally and PM Modi personally invested a tremendous amount of energy, with mixed results.

And over the past five months, it has all been about the Lok Sabha elections. Politics is important, but often, in election season, every decision begins to get taken through the prism of political benefit or loss; other issues get relegated to the back burner and the government machinery is on auto pilot.

With the mandate clearly in favour of a second term for the BJP-led National Democratic Alliance (NDA), it is time for Modi to get back to giving direction to India. The agenda is packed but here are five critical issues that need urgent attention:

Modi may have been elected by NDA voters, but he is now the Prime Minister of the whole country. This election has sharpened many fault lines- between political parties, between communities, and between geographical regions. Modi has to tackle all these three fault lines. He must reach out to the opposition, be statesmanlike and magnanimous, adopt a reconciliatory attitude and let go of allegations made in the past, and construct a cooperative relationship with leaders across the spectrum.

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The elections have also shown that a substantial element of the population – especially Muslims – continue to be alienated from the BJP. Modi must not allow this majority to embolden those elements of the Hindu right who believe they can take the rule of law in their hands and create a vicious and toxic environment against minorities. And finally, the north and the south of this country (barring Karnataka) have voted differently. This can be attributed to BJP’s limited organisational presence in the south, but it also reflects a certain distance from the worldview and ideology represented by Modi and his party. The Prime Minister has to make an extra effort to bridge this trust deficit with the south, respecting their cultural and linguistic distinctiveness and development trajectory. Elections work on divisions, but governance has to be based on unity. Modi’s first task is to unite the country.

One of the critiques of the first Modi administration was that it lacked competent and strong cabinet ministers, and power was centralised in the Prime Minister’s office, leaving them with little power. This has been truly Modi’s election and the PM may well be tempted to think that it is a vindication of precisely this centralised mode of functioning. But there is real merit to a collegial, competent cabinet system.

Modi must first begin to pick cabinet ministers not purely on political considerations, but on talent. He has the political strength to do it. Specialists must be brought in, professional advice heeded. This is of course not a call for the hegemony of technocrats. Political decision-making is crucial. But having a set of ministers – particularly in economic ministries – who know their fields well will only add to the calibre of the government and help Modi avoid mistakes. But it is not just about getting good ministers. It is also about empowering them.

To be fair, not all criticism of centralisation is fair. Those ministers who picked up domain expertise and worked hard – from Dharmendra Pradhan delivering Ujjwala to Piyush Goyal working on power and then railways – had a degree of autonomy. This pool needs to be expanded and ministers should have a sense that while they will be accountable to the PM, they need not look behind their shoulders at the PMO for every decision.

Foreign policy has, surprisingly, been an important element of this election campaign. But it has operated at two levels. Modi’s voters believe that he has enhanced India’s prestige globally. They also believe that by giving a strong response to terror emanating from Pakistan, he has demonstrated India’s will to hit back. But back on the foreign policy table, there are many decisions to be taken, choices to be made, relationships to be nurtured. For one, Modi will have to figure out what he wants to do with Pakistan.

His speeches may have locked him into a position where any engagement with Islamabad will be seen as weakness. But diplomacy is keeping all pathways open and reactivating the National Security Advisor channel to discuss terror, may be productive.

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There are many other crucial decisions to be made – on whether India wants to allow the South Asian Association of Regional Cooperation (SAARC) to come to life (it has been moribund since the Nepal summit of 2014, the next summit is to be held in Pakistan and India has given preference to The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, or BIMSTEC, instead); on how India will deal with the sanctions on Iran as the exemptions are coming to a close and US-Iran tensions have increased; on how India will deal with China and whether the Wuhan spirit will continue to dominate or the difficulties and differences in the relationship need to be tackled head-on; and crucially, how India will manage the increased differences with the United States, especially on trade and economic issues. Events often have a way of shaping foreign policy decisions but a well thought out agenda on some crucial relationships will help the PM deal with the world better.

The situation in Kashmir continues to be grim. There is apprehension in the valley that the Modi government will act to revoke or dilute Article 35-A and Article 370, which in different ways emphasise Kashmir’s special status. The Modi government may well think it has the mandate to push ahead with these changes to integrate the state with the Indian union better. But any such move must be carefully shepherded because it has the potential to deepen radicalisation in the valley and cause unrest.

There is also a political vacuum in the state, and the Governor cannot run it forever. Mainstream Kashmiri parties are getting jittery and losing space. The state needs elections urgently so that there is a politically legitimate government. The BJP has shown a tendency to use Kashmir for political benefits elsewhere in the country, but this has left the valley in a more disturbed state than in 2014. It is time for Modi to fight terror, win hearts and minds, respect the Kashmiri political voice, hold elections, and ensure peace and security in the valley – all simultaneously.

And finally, perhaps most importantly, Narendra Modi needs to focus on the economy. Poll rhetoric to declare that the economy is in good health is understandable, but there is a growing consensus among policy-makers, corporate leaders and economists that the economy is actually facing a slowdown – and we may well be staring at a crisis.

Consumption has been hit across sectors; corporate profits are looking down; the twin balance sheet crisis (bad bank loans and indebted corporate entities) continues even as the Insolvency and Bankruptcy Code (IBC) process is taking its own course; Make in India never took off and domestic manufacturing remains slow; unemployment persists or formal organised employment has just not picked up to meet the demand of India’s young demographic; agriculture remains mired in a structural crisis with low incomes for farmers.

Doubling the income of farmers by 2022 – Modi’s stated goal – looks elusive; the micro, small and medium enterprises (MSME) sector has still not recovered fully from demonetisation and implementation of the Goods and Services Tax (GST); India’s economic data framework is suspect for the first time and faces real credibility issues; macro economic indicators could turn unstable; and we are nowhere close to the double digit growth that a country of this size and population needs. Nothing is more urgent than the economy and Modi must invest all his energy and put the best minds at task.

Few Prime Ministers have enjoyed the degree of popularity – and thus political legitimacy – that Narendra Modi has. It is time for Modi to use this and pay back the debt owed to the Indian people to emerge from his second term with a far more focused, competent governance record than was achieved in his first term.

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First Published:
May 24, 2019 07:35 IST

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