Wednesday, June 15, 2016

Modi Government @2 Activity or Progress? Part-I

Yes !! Its late for reviewing the Modi Government's two years - but then "sabe tej" was never my motto. Jokes apart - I think there is little value writing a review under the carpet bombing of two year celebrations of "Desh Badal Raha Hai." So the best time to publish this is when the noises subside and one hopefully reads/writes with some objectivity.

What has the new Government been able to achieve in the last two years? In short lot of activity, not necessarily all action and yet it never stopped for a breath. Probably, this was badly needed too, after a rather dull, inactive last two years of the UPA-II. Hardly anyone will disagree that this government is in a mission mode. The discussion may be on what exactly is the mission. So lets look at the big picture in the typical MBA analysis mode - trying to categorise in "The Good, The Bad and The Ugly"

The Good
The simplest way to look at the work of this Government is to look at what its key ministers are up to. So who are the best ministers in this Government? Purely based on efforts and their directions My take  would be - Mr. Nitin Gadkari, Mrs. Sushma Swaraj, Mr. Piyush Goyal and PM Modiji himself. And a little reluctantly I might as well add Mr. Suresh Prabhu to the list.

All three Prabhu, Gadkari and Goyal have been focused and missionary in their approach to getting things done. Good news is that they head ministries that will eventually improve infrastructure and once their work starts percolating down to the last layer - economy will start chugging along hopefully soon enough.

Prabhu started off well by firmly putting the rhetoric of his predecessor about bullet trains etc behind him. In fact, of late he has even dropped his own rhetoric of Airport like Railways stations. Instead he has focused more on mundane task of sprucing up the current system of railways. However, in two years time he hasn't been able to do much except try small ideas like premium tatkal, cleanliness drives, food ordering apps etc. He still has to show action on big ticket items like private participation and generating finances for big infrastructural pushes (monetisation of assets). Whispers of his big time spending on upgrading railway infrastructure etc. are doing the round - one hopes by the end of this year they will appear as green shoots in the floundering economy. This is the reason he is at the bottom of the Good minister's list. well intentioned, trying but not achieved anything substantial.

Nitin Gadkari and Piyush goyal on the other hand are two ministers who are firing all cylinders at full blast. Despite there rhetoric of understating work done under UPA and of hyping up work done under them - the fact is that Highways construction has gathered pace again and rural electrification is also moving fast - though it will most probably miss its target of universal electrification in 1000 days which itself
admittedly was very ambitious target. He has also brought in more transparency in coal allocation and has successfully reignited power generation. This two ministries alone should result in some real on the ground growth in the economy (as against the high GDP growth rate which is a result of reduced commodity rather than increased economic activity as of now).

Mrs. Sushma Swaraj by all means has been consistent and good foreign minister. She is away from hyperbole, is dignified and quietly goes about her job. Yet, she has managed to be connected to the people and is very active on the Social media. She and Modiji himself make a formidable and impressive team on the foreign front. Although the work done by EAM often does not have immediate impact on the ground socially, economically and politically - yet we must give this ministry credit for being consistently energetic and focused on improving relations (with the exception of Nepal and Pakistan), marketing India and Indian business, negotiating and executing agreements and generating overall positive vibes globally for the country.

The top of the order is the PM himself. Modiji has been tireless - in fact hyper energetic (in the positive sense). He is a man who wishes to leave a legacy of his own for the posterity. And that's a good thing. He has gone out of his way to woo the global community both commercially and politically. And there are already green shoots in increasing FDI after a nadir for a few years. His positives has been that he has given his ministers autonomy of functioning, has stuck with them and has brought about a lot of activity in Governance. He has kept up the image of someone who is working all the time.

The problem is he has done precious little on some of his big time promises punishing Corruption, Minimum Government. And he has U-turned on so many of his (party's) earlier stances that his policies appear to be a reprint of UPA policies. More on this later. The biggest grudge I have with him is that he still sounds and acts like a BJP stalwart instead of being the PM of India by selectively choosing to ignore/respond to issues, by being vindictive to the opposition and by being in an almost perpetual election mode.

Purely because he cannot be put in the bad/ugly category I am adding Defence Minister Parrikar to this good list. I do not consider him Good as of now but to his credit he looks focused and his ministry needs more time. The fear is he does not seem to be able to fast track much. In fact the Augusta debate and political compulsions of exploiting it may end up putting breaks to decision making in the defence ministry.

The Bad
Before you start pouncing on me for calling a few well intentioned and able ministers bad - let me remind you that I categorize purely on efforts made.

So who are those ministers who seem to have promise but have not done well on the delivery. The glaring ones will be Finance Minister Arun Jaitley, the Commerce Minister N. Sithraman, The communications Minister Ravi Shankar Prasad, Prakash Javdekar in the Environment Ministry, Urban Development Minister Venkaiah Naidu and the Home Minister Rajnath Singh.

The big disappointment to me is Jaitley, primarily because I had expected him to be someone who shall deliver much more. He was supposed to be a positive

reformer bringing about real "parivartan". To his credit, he has stuck to the goals of fiscal discipline, has left the RBI Governor largely autonomous, has ushered and got the Bankruptcy Code passed, has used the decline in Oil prices well to increase the revenue and reduce the current account deficit. But except the Bankruptcy code most of his positives are tactical baby steps and not fundamental reforms aimed at long term robustness for the economy. 

Lack of clarity on retrospective taxation persists, tinkering with epf,ppf rates or small time subsidies, or application of cesses and taxing epf withdrawls to generate more revenue instead of focusing on widening of tax base, or privatisation/disinvestment to unlock huge value or fundamental reforms to address supply side bottlenecks are missing from his approach. While more than once he has been ranting about high interest rates in the economy - he hasn't been able to do much on the fiscal side to address the problems. Even on the professed increase of ease of doing business the Finance Ministry has done precious little systematically.

India has somehow always had inept Home Ministers in the recent history - except for P. chidambaram in his small stint - neither shivraj patil nor sushil kumar shinde generated any confidence. The lesser said of Rajnath singh the better. As HM he has not been able to generate an atmosphere where the central government creates an image of sincere unbiased torch bearer of managing law and order in the country. More often than not his decisions or lack of them end up creating an image of a biased umpire between states ruled by friendly or opposition regime.
Nirmala Sithraman is an erudite and no-nonsense lady and yet her approaches to trade are traditional and obstructionist. I cannot single out one bold step that her ministry has taken that addresses the exports bottlenecks or need for freer trade. In fact quite contrary to expectations this so called "right wing" government has turned out to be more incrementalist and tactical on the economic reforms. Even the reporting of the routine EXIM policies have been relegated to small columns in the 7th page of economic newspapers.

The smart cities project seems to be completely the PMO's project and one does
not see the urban affairs minister contributing anything energetic or substantial to the goal. The project itself an ambitious and game changing one is facing an expected shortage of investment to be of any substantial impact value.

Two years of the Government and the logjam in the critical telecommunication jungle does not seem to move much. Noone is happier whether it be the data, 4G, voice or landline telephony on either side - the industry or the consumer. If his ministry was contributing something to the "digital india" mission beyond the advertising, then not many know of it.

One does not now whether Ravishankar is minister just because he defends modiji in press conferences forcefully or there is more to it. 

Jairam Ramesh as environment minister under the UPA had become a name to reckon with. He had invited the ire of the big and the powerful in the industry by his principled stance on the environment thereby almost creating an image for himself and his ministry as obstructionist and anti-development. Prakash Jawdekar in the current Government has been inconsistent and has flip flopped between opening the gates for the mining industry to generating controversy over allowing for the culling of the blue bulls by the UP Government. In fact he, I believe, has played the unofficial role of the Government's and Party's spokesperson better than many official one's.

The Ugly
Which brings us to the real nuts in the Government. Some of them are actually embarrassment to the Government but as Shekhar Gupta tweeted once this is a government that does not ask for resignation of even those who embarrass the Government itself. 

No, I am not ranting about ministers who are passive. Every Government has its fair share of those - but I am talking about active ministers whose activities are misdirected (or so we feel, not them). The list will be topped by - Mrs. Smriti Irani - one doesn't get the direction or sense of what she is out there to achieve (except maybe melodrama). She has a style of a tigress - with wide eyes and either a queer smile or a angry twitch with which she would roar "Aap mujhe ek minute sun lijiye - agar aap mujh se sehmat na hui to apna sir kalam kar ke aapke kadmo me rakh doongi")

What she has done in these two years is that she has created a perception of a Government who is interfering with the autonomy of the education system, sidelining those who disagree, encouraging correction of history in the books, appointing sub-standard people to head institutions and allowing the ABVP a free hand on the campuses/universities. After Home Ministry, the HRD portfolio is another one which unfortunately has not seen a good appointment for long. Mr. Murli manohar joshi under Vajpayeeji started the trend of interfering with the autonomy of institutes of excellence like the IITs/IIMs. Arjun singh under the UPA-I or Kapil Sibal under the UPA-II kind of continued the trend. The infamous scheme of distributing low cost tabs to students under sibal achieved hardly anything. The only positive step over the years in improving the education system by sibal was that of bringing all MBA admissions under five major exams and that of centralising admissions to Engineering colleges and increasing the importance of XII class performance in the IIT and other admissions. The later have been either put on the back burner or has effectively been taken back by the current HRD ministry.

And as I was writing this - she has objected to being addressed as "dear" by a fellow politician in a tweet. Often the yale degree works against her, I guess. These are the kind of headlines she has attracted over last two years.

The less said of blabber mouths like Gen V K singh, Rajyavardhan Rathore, Harsimrat Kaur Badal, Mahesh Sharma, Sushri Uma Bharti, Giriraj Singh the better. Because you are already wondering which ministries they manage - forget about the important work they were supposed to do (like cleaning of Ganga for Eg.). However, at least a few of these names would come to your memory for making some really embarrassing comments about sensitive issues like India giving back to Pak in their style, or on Beef eating or on Cow slaughter or Nationalism or simply to incite communal passion probably to win elections. Suffice it to say that more than the opposition these ministers have been more effective in gnawing away at the pro-development image of the Government.

Wait for Part - II

The obvious problem in analysing a Government on the basis of its ministers is that some strategic and macro directions do not even get discussed. So lets take a different look at some of the Government's big initiatives. Wait for Part-II. Stay tuned.