The fact that the Modi government is depending largely on the bureaucracy for bringing in transformation does not provide much hope
The current National Democratic Alliance (NDA) government, led by Narendra Modi, has governed the country for two years. Assessment of its performance over this period is emerging as the biggest industry in the media. Every Tom, Dick and their mothers-in-law have an opinion, which they make no effort to keep to themselves. I see no harm in adding to the cacophony with my own take.
Assessment of performance can be undertaken in various ways. We can have a wish list of things we would want the government to do and then tick off what has been achieved. That would be rather naïve. Alternatively, we could make a comparison with the previous government. Since the previous government was known for its somnolence and hardly did anything, worthwhile or otherwise, any government would find it easy to better that performance. We could compare the performance to the expectations that people had from the current government. That would be valid except for the fact that in a country as complex as India, actions take an inordinately long time to manifest themselves into actual outcomes. I believe we should evaluate the government in terms of whether a foundation has been laid for “Acchhe Din” in the future and whether a process has been established and an environment created for effecting structural changes.
While we need corrective action on many fronts, I believe the biggest problem holding India back is the regulatory control over transactions, commercial or otherwise. We are a ‘permissions and approvals’ country, which creates roadblocks in undertaking any activity we may want to engage in. The roadblocks are bureaucratic and structural in nature and prevent us from smooth running of business and leading our lives in a free and unrestrained manner. Nurturing, and not controlling, is required to get the best out of 125 crore Indians.
Has that been achieved over the last 24 months?
The current government has been a passionate advocate of the use of technology for improving governance and making it inclusive. The most critical action on this front has been what is popularly termed JAM, which has the potential to make a significant impact in the coming days. JAM, as we all know, stands for the Jan Dhan Yojana, Aadhaar and Mobile. Technology is being leveraged to ensure that the benefits of government schemes and subsidies actually reach the desired beneficiary directly and instantly in what is termed the Direct Benefit Transfer (DBT).
It is a tribute to the people of the country that mass adoption of technology is something we have, usually, accepted with tremendous enthusiasm. In the mid-90s, crores of equity accounts in the stock market were converted to electronic form in a matter of two and a half years, something that has not been achieved at this pace, anywhere in the world, on such a large scale. Then, in the initial years of the current century, the country was ‘mobilised’ so to say, with telecom penetration reaching dizzying heights.
The last few years have seen Indians being given a new number, in a way, through Aadhaar. All this has now culminated in the inclusion of a large number of hitherto excluded Indians in the banking system of the country. While this may not have not brought any instant benefit, its potential in the future is enormous. In this day of instant food and instant gratification, we crave for immediate dividends, conveniently forgetting that significant and lasting benefits accrue from structural changes. It is difficult, at this stage, to surmise the impact of JAM but it is likely to be a game changer.
There is, now, a direction to the economy, which had been rudderless for many years (quite ironically, under one of the most renowned economists India has produced). Inflation is under control, driven to a certain extent by a fall in oil and commodity prices, growth is now expected to pick up although it is taking more time than most of us expected and action on various other fronts is visible. The government has transferred significant resources to states in line with the recommendations of the Finance Commission. It has sought to set right the mess in the telecom and the coal sector, based on the decisions handed down by the judiciary. There is visible action on several fronts that were lying unattended. In some sense, governance seems to have made a definite comeback.
It is indeed commendable that despite action on many fronts including sale of shares of some public sector units (PSUs), coal and telecom auction and purchase of defense equipment, there has been no corruption charge against this government. It is an incredible achievement given that the previous government was so scam-ridden and shows that even in the current environment of mud- slinging and suspicion, it is possible to take decisions, without succumbing to the temptation of the lucre.
However, the NDA government has to guard against the power that bureaucracy exercises and its innate proclivity towards maintaining status quo. While the need to free up markets, business and civil conduct is so urgent, no action has been taken on this score nor is there any intent manifest in government policies. The fact that the government is depending largely on the bureaucracy for bringing in transformation does not, in any case, provide much hope. We can only wait and watch, with apprehension.
It is in the non-economic areas that the government’s report card scores poorly. Ours is a democracy and we profess to be a liberal democracy. While a democracy is characterised by a government elected by the people, a liberal democracy is one, which ensures that all citizens, irrespective of their political affiliation, ethnicity, religious beliefs and caste are treated equally. All citizens must have not only property rights and political freedom, but are also entitled to civil liberties. Ever since the NDA government took charge, minorities and those opposed to the current dispensation, have been apprehensive in this regard. The government and the ruling party have been advocating and promoting a religious based agenda that has raised temperatures many notches. In a country as diversified as India, the government must stay away from religious and other personal matters. A modern India cannot be a divisive India and if we are to progress, we need to ensure that divisive tendencies are firmly rooted out. It is imperative that we become a meritocracy based nation rather than a divisive one.
The government has also worked in a manner that has destroyed the independent fabric of institutions. Our constitution is not based on a committed civil service but a permanent one. Similarly, the heads of various institutions hold their positions based on merit and not on their advocacy of the governing party’s ideology. The government has done grave disservice to various eminent institutions by interfering in their functioning and, at times, unceremoniously, removing their heads. Delhi and Mumbai Universities, Indian Institute of Technology (IIT) Delhi, Defence Research and Development Organisation (DRDO), Film and Television Institute of India (FTII), Nalanda University and Indira Gandhi National Centre of Art, are some institutions that come to mind although there are many others. India’s future is predicated on a strong, vibrant institutional framework. It takes ages, and probably an exceptional person at the top, to build an institution. Destroying it is an easy and quick process. It would be an invidious legacy of this government if it continues to undermine well-known institutions in the country.
Since independence, India has experienced rather weak governance. The action, or inaction in most cases, of various governments betrays lack of courage in standing up for what they possibly believe in. Things happen due more to serendipity than anything borne out of ideological convictions does. The liberalisation of the Indian economy in 1991 was practically forced upon us, the alternative being a default on our external borrowing commitments. Since then, the culture of reforms has been practically non-existent. Even minor steps taken are rolled back at the slightest hint of opposition, as we witnessed in the recent rescinding of provident fund (PF) reforms. A set of people can hold the government to ransom in Haryana, looting property, killing people and raping women, with their punishment being a promise of reservation. A liberal state needs strong governance, which ensures basic rights to all citizens and protects them from more vocal elements. A government that cannot establish rule of law is a worthless government.
In the initial enthusiasm of the Modi government assuming power, there was a hope that this government will be different, with the courage to implement what it stands for and not be held to ransom by a set of people, behaving as hoodlums. That hope is being increasingly belied with its failure to protect the fundamental rights of the silent citizens and its pandering to the demands of the vocal and physically intimidating sections of the population.
It is a popular practice to give marks out of ten to the performance of the government. I would refrain from doing so since nation building is a continuous, ongoing process. All I would say is that it has undertaken some structural measures on the economic front whose outcome may not be immediately visible. On the non-economic front, its actions have been divisive and mischievous, with the potential to cause damage to the basic social framework of the country. The next two years are going to be decisive and I do hope success of some of the measures taken by the government whets their appetite to do more and at the same time, they do not create further structural frictions. We can only wait, and hope, with apprehension.
(Sunil Mahajan, a financial consultant and teacher, has over three decades experience in the corporate sector, consultancy and academics.)