Has Narendra Modi re-set his political sights? He talks now of the poor,
not the neo-middle class that featured in his campaign manifesto and in
Arun Jaitley’s first Budget. When railway finances are in poor shape,
he decides to not raise railway fares – though fares cover barely
twothirds of cost. He has done a dramatic about-turn on the rural
employment guarantee programme, which he no longer damns as a monument
to Congress failures. The promise of minimum government has gone out the
window. And he sounded defensive, even beleaguered, when he spoke the
other day of conspiracies to “finish” him – conspiracies by civil
society activists, if you please, while he (i.e. Mr. Modi) was busy
working for the people.
To many observers, that sounded like
Indira Gandhi who campaigned in 1971 by saying: “They say ‘Indira
hatao’, I say ‘Garibi hatao’.” Though her economic policies did little
to remove poverty, she is remembered by the poor as someone who stood
for and by them. It is beginning to look like Mr Modi thinks that is not
a bad place to be. Typically, the arrival of “Modi Mark II” is to be
marked by a kisan maha sammelan in Delhi, with 100,000 farmers to
attend. So the nervous question in business circles is: will Mr Modi,
less than two years into office and wounded by Rahul Gandhi’s
“suit-boot” jibe, use the Budget to announce his new political
positioning?
If he does, there will be parallels with P. V.
Narasimha Rao, who turned his back on economic reforms in 1993, two
years after launching them, because of electoral reverses in two
southern states. Soon Rao was to announce freebies on Independence Day,
while Manmohan Singh as finance minister grumbled in an interview that
you could not spend your way to prosperity. The record of other prime
ministers too shows how much can change when a prime minister is faced
with the two-year challenge. Elected to the Lok Sabha in 1967, Indira
Gandhi faced a political challenge in 1969 and wrested the initiative
only by splitting the Congress and launching on a reckless string of
nationalisations and ruinous tax measures. Reelected in 1971, she was
faced with JP’s anti-corruption movement by 1973, and eventually imposed
Emergency rule. Elected a third time in 1980, she had to confront
Bhindranwale’s “Dharam Yudh Morcha” in 1982, leading to the Punjab
insurgency that eventually cost her her life.
When it came to
Rajiv Gandhi, the Bofors scandal hit him shortly after he completed two
years, in 1987; he would never recover the political initiative. As for
Mr. Vajpayee, re-elected in 1999, the challenge came midway into his
term, from the Rashtriya Swayamsevak Sangh boss K. S. Sudarshan. Their
power play was on the swadeshi issue; Mr. Vajpayee stood his ground. And
Manmohan Singh, two years into his second term, was hit in the solar
plexus by the government’s auditor; his government remained paralysed
till its term ran out.
Mr. Modi faces no real political challenge
or crisis, least of all because of civil society activists. But he
recognises that some of those whom he enthused in 2014 are now a
disappointed lot, even as successive droughts have caused severe
distress in the countryside. While it is entirely right that he should
address that urgently, the danger with “Modi Mark II” is that he will
focus on giveaways rather than the tougher task of boosting productivity
(and therefore farm incomes). In a search for a more secure political
constituency, Mr. Modi might even be tempted to revert to the failed
policies of Indira’s time: trade protectionism, redistributive taxes
that encourage evasion, and policies that favour government-funded
investments rather than private sector recovery. One hopes not.
(Source: Weekend Ruminations by Shri T. N. Ninan in Business Standard dated 27-02-2016.)
