Assessing 3 years of Narendra Modi: Power, purpose and politics

When Narendra Modi surged to power three years ago, everyone expected an awkward transition from Gandhinagar to Lutyens' Delhi. Markets were happy to see him and his majority, yes, and India Inc thought that here was a man they could do business with, once he settled in. But Left Liberals and minorities looked worried; foreign policy wonks fretted about his inexperience on that front, and the capital’s entrenched elite watched curiously.

Cut to 2017. Markets are booming on the back of a string of state election wins for (the business-friendly) Modi, continued good luck on global oil prices and a paucity of emerging market alternatives for investors. There continues to be a business-like air in Delhi’s stately halls of power; Modi has won a reputation as a workaholic obsessed with results; and there has been no talk of corruption on his watch. Tick the boxes that the smart money follows, and tick again.

GST, the biggest tax reform in the country’s history will be a reality in just over a month. Aadhaar, the world’s biggest identity card scheme, is being pushed with single-minded, if sometimes controversial, focus. And the government has expanded budgets for MNREGA, the world’s largest public works programme. It’s all the more creditable for the BJP that all three were UPA ideas to start with.

But the record on jobs is poor, and though it's beyond the government's control, widespread changes in the global IT industry could make the situation worse. And the less said about the quality of social discourse in the country and the thuggish ways of some of the government’s supporters, the better.

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Economy

The key economic indicators are pleasing:

“This government has performed above expectations on the economy front: they have achieved plenty, be it GST, the NPA ordinance or the bankruptcy code,” says Economist Ajit Ranade. “They had the discipline on the fiscal front not to fritter away the advantage of low oil prices.”

He picks civil aviation as a star performer, and agro processing, renewable energy and sectors that serve inputs to the affordable housing sector, such as steel and cement, as having strong prospects. The power sector under Piyush Goyal is widely seen as a standout performer.

As for the concern areas, jobs are on top of most peoples’ lists: particularly piquant is the combination of a job shortage and the shortage of skilled people to do the jobs that do exist.

“The pace of job creation is very disappointing,” says Ranade. “The pick-up in private sector investment is poor and credit offtake from banks is very low.”

Says Partha Mukhopadhyay, Senior Fellow at the Centre for Policy Research: “The critical issue is that corporate investment has not recovered since Lehman and household investment has been steadily falling since 2011-12. This does not indicate great confidence in the economy. Even if business makes nice noises, they are not putting their money where their mouth is. Neither are households.”

The private sector is suffering from high indebtedness, relatively high interest rates and the threat of Chinese imports in several sectors.

The slow improvement in the Ease of Doing Business is a sore point.  India ranks 130th out of 190 nations in the World Bank’s list. It moved up 12 spots (only 4 if you account for methodological changes) between 2014 and 2015, but only one spot (zero if adjusted for changes in calculation method) between 2015 and 2016.

Markets, of course, have boomed: Investors love stability and business-friendliness and India is the fastest-growing among the big economies.

A Tight Ship

On the home front, the government’s fans can point with some justification to the improved record on terror (no major attack on civilians). There is little news, though, of a Naga accord unveiled with some fanfare in 2015; and the situation in Kashmir is at its worst in decades. Most disturbingly, there are stirrings of pan-Islamist terror – of the caliphate variety -- in the Valley, no longer just a longing for independence or an affinity for Pakistan. It remains to be seen how the BJP handles this; Home Minister Rajnath Singh’s utterances about a permanent solution suggest that this is something that is exercising the minds of the top leadership.

That Modi runs a tight ship at the Centre became apparent very soon, and the fact that the Prime Minister’s Office is a watchdog has kept at bay the corruption that blighted UPA2. But it has also empowered the states.

“In terms of governance, in decentralizing power and authority out of Delhi to the states, this government has done more than any other government,” says political commentator Ashok Malik. “But it has also emphasized the authority of the PM’s office and the PMO takes final responsibility.”

Malik says the government could have gone further in using private sector talent, adding that India has to move beyond delivery just by the bureaucracy.

On foreign policy, while minister Sushma Swaraj won friends with her personal touch, the transactional Modi continues to  prove surprisingly adept. There is, by and large, no flat-footedness; indeed, there is, for the first time in years, an element of equality in dealing with the Chinese. The government is also enjoying the afterglow of its ICJ win on the Kulbushan Jadhav issue.

“The Pakistan relationship has become a subset of the China relationship. And Modi has won back some, but not all, space lost to China in the past decade,” says Malik.

Modi travels well, as they say, and it helps that Indian communities abroad are overwhelmingly Right of centre. This ensures spectacles like Wembley stadium or Madison Square Garden. It’s unlikely that the average Joe in any country that Modi has visited doesn’t know who the Indian PM is. This is not something that could have been said of most of his predecessors.

Three Signature Events

The three most memorable events of the third year of Modi’s reign were demonetisation, surgical strikes across the LoC, and the UP election landslide.

The remarkable thing about demonetisation is the enthusiasm with which people bore the inconvenience – a testament to Modi’s personal popularity -- and the way it aggregated them as a new and durable votebank for the BJP. It was populism with a difference – it did not particularly empower the poor or offer them goodies, it pulled down the corrupt rich, at least in theory.

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The surgical strikes were well-marketed and any protestations that the UPA had done several of these were lost in the overall din.

The BJP continues to be a party that’s perennially in election mode. The big election wins – first and foremost Uttar Pradesh but also Assam – have wiped out the bitter taste of the Delhi and Bihar disasters. The party has gunned for Arvind Kejriwal, potentially the biggest thorn in its side, with gratifying results; it has also helped that he has a self-destructive streak in him. There is now a certain inevitability about 2019, which will require spectacular – and highly unlikely – political mismanagement to lose. The appointment of Yogi Adityanath as UP chief minister also provides the party a potential second-rung of top Central leadership for future use.

Those on the margins

What of the rest? Left liberals are sounding tired and left out, in danger of fading into the sort of insignificance the Congress now typifies. The most anxious minority, the Muslim community, shivers each time cow-protectors turn men-killers. But the BJP’s stance on triple talaq – so far – could turn out to be a popular lever to exert some influence in what is for it the most difficult demographic.

“The BJP hasn’t discriminated between community X and Y in its governance. Social media and TV are exaggerating tensions with loud language. But as the BJP grows into India’s largest party, it needs to have a conversation with India’s Muslims,” says Malik.

And Congress continues to be in navel-gazing mode. And there’s little indication that it will abandon its non-performing first Family when it runs out of navel at which to gaze.

For all the impregnability of fortress BJP, there are some unsavoury side-effects that it would do well to neutralise, if at all it wants to.  Its Internet army of trolls are bottomless pits of hatred; their behaviour is an abomination on the social discourse that India has always treasured. The BJP and its parivar tend to tell people what to do, what to wear, what to eat and what language to speak; suffice it to say that only some people like this sort of thing. The party may want to think twice about underestimating the average Indian, like they did with their Indian Shining fiasco in 2004.

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