Narendra Modi has been returned to power with a bang by the people. Despite a record of tepid success in the domestic and economic spheres at home and timidity abroad, except when it comes to Pakistan where he has roared like a lion mainly because he faced a mouse, the Indian voters apparently selected him as the default option. This was a wise thing to do considering the opposition that when not promising chaos and family-driven corruption, complacently relied on the caste arithmetic to hoist them into power only to discover that the negatives attending on the likes of Mayawati, Mamata, Rahul-Priyanka Gandhi, and Akhilesh Yadav far outweighed in the mind of the electorate any real good they said they’d deliver.
However, the thing in the prime minister’s victory speech about Indian politics, besides contending that the election results had written finis to the caste-based and dynastic dynamic, would hereafter be propelled by two concerns — the fairly high proportion of society that is still poor and by measures to alleviate their condition, may be the harbinger of more populist policies and giveaway schemes that don’t and can’t pay for themselves. In other words, the new Modi government may actually strengthen and reinforce the nanny-state tendencies of the “socialist” state bequeathed the country by the Nehru-Gandhi’s, where the principle of lifting oneself up by one’s own bootstraps embodied in the ongoing programme of disbursing small loans to the youth to start their own small businesses, is discarded. It will confront Modi with the impossible task of finding gainful “white collar” employment for tens of millions of ill-educated, unemployable, youth (many of them flashing 90% plus marks in school-leaving exams) when accommodating them in government jobs will mean expanding the government and its role in the lives of the citizenry — which’d be the reverse of his 2014 promise of “minimum government, maximum governance”, or is this trashed as well?
In this scenario, radical departures of policy in any realm seem unlikely. Thus, land and labour reforms — the two hurdles that economic liberalization drive of the Manmohan Singh and the successor Modi regimes have stumbled on, will remain unaddressed. Consequently, the rapid growth of industry and the manufacturing sector dependent on the easy availability of land and mobility of labour that comes from disposing off the hoary socialist rule of “once hired, never fired”, will never happen, the dream of India replacing China as the workshop of the world will never materialize. And the opportunity of India exploiting the current economic rift between the US and China to attract Taiwanese, American and European capital and manufacturing companies to set up alternate production sites in this country, will be lost. And Modi and the BJP will lose a once in a lifetime chance of setting India on the course for accelerated economic development, will be wasted. The small door now open to India will inevitably close because the US and China are too invested in each other not to drawback from a mutually ruinous all-out trade war, unless India wedges a big Indian economic foot in it, forces it open by incentivizing global investors and manufacturers with the prospect of selling their wares in the vast Indian market and to produce for the international market. This will require as prerequisite massive skilling programmes to get ready a skilled workforce — something that only the private sector can produce if it is induced to invest in such enterprise with attractive tax holidays and tax-writeoffs. The skilling endeavour in the first Modi government merely amounted to a lot of paper circulating sluggishly through the endless bureaucratic corridors of the government.
Which brings us to the question of whether Modi will affect any real efficiency in the government’s functioning and to what extent and scale? As I detailed in my book ‘Staggering Forward’, this is not what Modi is inclined to do. So, India will remain stuck in the economic never-never land of glib rhetoric and, absent the will to change, an over-sized under-performing government ostensibly to service myriad populist, money guzzling, programmes launched by Modi.
And abroad, the country will stay on the same old track — frequent foreign tripping and summiting by the PM, the careful massaging of Modi’s ego by foreign leaders whom he has hugged and embraced only to provide a bigger market for Chinese goods, and generate more arms sales for defence industries in Israel, Russia, France, UK, and the US, even as indigenous armament R&D and production by the private industry is actively discouraged while wasteful DPSUs continue to binge on the taxpayer’s rupee but now with licensed production deals for dated military hardware — F-21 (the antiquated F-16 with bells and whistles) and the like, in the name of ‘Make in India’.
And Modi will carry on tilting towards the US — do as Trump bids Delhi do whether on cornering Iran, reducing arms purchases from Russia, permitting US military to stage out of Indian bases, or going slow on building external bases on the Indian Ocean island nations and the rim. Much of this activity will be supported by the powerful policy eco-system working in Delhi comprising Indian origin thinktankers and academics in the US, former Indian ambassadors to America and US envoys to Delhi and such-like diplomats, and a whole bunch of poo-bahs in Indian officialdom hankering for, and rewarded by a canny Washington, with green cards and scholarships, resident and H1B visas for progeny and family. Support for this tilt is vociferous in the media, and more subtly with appropriate notings on files. This is so notwithstanding the fact that those urging such a policy line admit that the Indian government faces a “fickle” and unreliable US.
Meanwhile, Russia forges close economic, military and technological bonds with China and Pakistan, and Modi, starry-eyed about his budding relationship with the “extremely stable genius” residing in the White House, as President Donald Trump unabashedly described himself on TV yesterday, ignores both the diplomatic-economic-political-military leverage India has in dealing with big powers, and the more obvious geostrategic moves he can make to sock it to China — the only substantial econo-military threat confronting India. By, for instance, freely transferring strategic impact missiles to states on China’s periphery, formalizing ties with Taiwan, coordinating closely with Taipei to discomfit Beijing, mounting international campaigns, also in the UN, on behalf of the oppressed Tibetans and Uyghurs in Xinjiang, and generally being disruptive like hell in India’s foreign relations.
But for this sort of disruptive policy Mr Modi has shown no stomach at all. He’d rather MEA mumble niceties about the “Wuhan spirit”, let Beijing kick us in the shins, and do nothing to stall the Chinese advances in Afghanistan and Central Asia by establishing India as security provider there and in Southeast Asia or rile Beijing by ramping up defence cooperation with Japan and symbolizing it by immediately approving the project for Indian production of the Shinmaywa US-2 flying boat for the international market that Tokyo would be happy fully to fund! So much for Modi’s strategic foresight.