Modi and the Marketplace

Darbhanga, Bihar. An early November evening in 2015. A jam-packed maidan of crowds thronging Prime Minister Narendra Modi’s election rally. Like many others, 27-year-old Pappu Ram has travelled from his village to the town for what he believes is a historic election rally in his state. It could have been a re-run of such past spectacles, but for the hundreds of miniature screens around him. “I’ve captured it for posterity on my phone,” Kumar says with pride. His friends, many flashing smartphones, nod in agreement. They were also signalling the dawn of the consumer era—that seems to have gripped the rest of the nation—even in a state which by any yardstick is still classified as severely underdeveloped.

“This is definitely a departure: not only are the crowds mainly composed of youngsters from all castes and classes but virtually every poll address of the Prime Minister in Bihar is a festival of lights, a Diwali of well-lit phone screens; many of them smartphones, something you couldn’t dream of just three years ago. But the phenomenon is more pronouncedly noticeable at the Prime Minister’s rallies where young people are predominant,” says petroleum minister Dharmendra Pradhan, a key member of the Amit Shah team managing BJP’s poll campaign.

From Banka, where the Prime Minister addressed his first rally after poll dates were announced for the election billed as the most important after the 2014 Lok Sabha polls, through Muzaffarpur, Gaya and other districts of what was once a prominent BIMARU state, the social empowerment enabled by technology is amply evident. In a state where the number of villages with navigable roads and potable water still compare poorly with the national average, mobile phone and internet connectivity have become the defining totems of technological advance and rapidly spiraling aspirations for the young and restless of Bihar’s current day society.

Between 2010 and today, the number of aspirational classes have exponentially increased in Bihar. The BJP, the first among mainstream political parties to adopt social media with a vengeance, has been the fastest on the learning curve about the changes and aspirations that define today’s India.

While its competitors remained confined to the politics of entitlement, the BJP has audaciously dared to address the rising aspirations of the populace with the promise of quality education and skilled employment. If the response to the Prime Minister’s poll campaign is anything to go by, the PM has set a new benchmark for future campaigns—the emphasis now being firmly on empowerment and not entitlement.

Before it came to power in 2014, and certainly after assuming the reins of power in New Delhi, the BJP was dubbed an elitist party that favoured business and the rich. This has been proved wrong.

Programmes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) were not only badly designed but also had large leakages. Yet, this programme was not halted. Other schemes such as the Jan Dhan Yojana and the low premium insurance scheme for poor citizens conveyed a very different message: not only was the BJP pro-poor but that it could think of programmes that empowered the poor instead of launching yet more corruption-ridden entitlement schemes.

Rare is the time when conditions on the ground are in sync with the reigning ethos. The formation of the National Democratic Alliance (NDA) government in Delhi effected a change in the ideological make-up towards business. The NDA believes that it can be pro- business and at the same time not abandon its commitment to the poor—in effect it does not believe it has to feel guilty for being pro-business, especially when it helps generate jobs. It was indeed a break from the good old days when businessmen were publicly scoffed at and deals were struck with them in the Capital’s watering holes; policies were shaped after greasing the palms of those who manned the ruling party’s rogue chest in the leafy avenues of Lutyens Delhi.

The old scheme was not surprising as the political class were following what was supposed to be a Brahminical disdain for trade and commerce—sociologically speaking, a challenge from another class. It got a new type of ideological enforcement because of the forced marriage of our economic outlook with a spurious kind of socialism.

This set the clock backwards. India’s thought process, in fact, was radically different when it gained freedom. Dadasaheb Bhimrao Ambedkar, chief architect of the Indian Constitution, saw no schizophrenia between a free market economy and an ingrained socialist world view. In Parliament, in the course of a Constituent Assembly debate, Prof KT Shah from Bihar moved an amendment to the original Preamble statement. ‘Secular, Federal and Socialist’ should be inserted into the Preamble, he asserted. Ambedkar retorted, “The Constitution… is merely a mechanism for the purpose of regulating the work of the various organs of the State. It is not a mechanism whereby particular members or parties are installed in office. What should be the policy of the State, how the Society should be organised in its social and economic side are matters, which must be decided by the people themselves according to time and circumstances. It cannot be laid down in the Constitution itself, because that is destroying democracy altogether. If you state in the Constitution that the social organisation of the State or society shall take a particular form, you are, in my judgment, taking away the liberty of the people to decide what should be the social organisation in which they wish to live. It is perfectly possible for thinking people to devise some other form of social organisation which might be better than the socialist organisation of today or tomorrow. I do not see therefore why the Constitution should tie down the people to live in a particular form and not leave it to the people themselves to decide it for themselves. This is one reason why the amendment be opposed. The second reason is that the amendment is purely superfluous…” Ambedkar went on to argue that the Constitution has socialism inbuilt into its DNA and adding the word ‘socialist’ would actually be redundant.

But the Nehru-Gandhi years that followed witnessed the rage of what can easily be described as spurious socialism. The forced austerity that this outlook created did not leave the collective psyche even after PV Narasimha Rao ushered in economic liberalisation. The reluctance to call the process what it was—liberalisation— provided a free run for crony capitalists. In the years that followed, natural resources and airwaves went into the hands of powerful well-networked people. This revived the worst stereotyping of business and the dread of being seen with businessmen came back.

In this context, May 2014 marked a shift when a significant majority bought into Modi’s claim that he has the wherewithal to break Delhi’s cabal. Despite daily taunts from the opposition, which is desperate to coin a message against the Government, the Prime Minister is not being defensive about working for business. The Prime Minister’s attitude to business was unambiguously spelt out by his Finance Minister Arun Jaitley on the floor of Parliament: “Someone said we are pro-business. We are pro-business. There is no contradiction in being pro-business and being pro-poor.”

This new outlook is being complemented by a series of measures that changed what had been the approach to business till May 2014. One, the Prime Minister’s office, to a large extent, ended individual corporate access to decision-making. Not so long ago, corporate honchos from Mumbai had designated days of weekly visits for pushing their self-interest and scuttling that of their rivals. There is acknowledgment even among political rivals that the new leadership has been successful in keeping some distance between the Government and lobbyists. This provides a redemption moment for many upcoming businessmen who have been throttled by embedded players.

Second, there has been a concentrated effort to remove bottlenecks in critical sectors such as power, coal and infrastructure. Not only did it spell out a transparent policy for auctioning natural resources, but it also carried out a very successful coal auction. It has also introduced a single window clearance integrating many government services onto a single platform to help in faster clearances of projects.

As a measure to further improve the ease of doing business, it has brought in changes in the Companies Act to make it easier for businesses to start operations. It has also streamlined the foreign direct investment policy encouraging more investors to invest with minimum red tape.

To revive infrastructure projects, the Government has announced a number of steps including one time fund infusion for road projects. It is also constantly monitoring projects to ensure their progress—not only is it reviving old projects, but it is also helping banks unlock their bad debts; once a project is operational it sets in motion cash flows, which in turn helps the company service its debts.

On the tax front, it has announced measures to reduce litigation and bring in clarity in tax laws. To this effect, it has streamlined the administrative process for appeals in tax cases as well as set up a committee to redraft the Income Tax Act to remove ambiguities.

Third, the Government, to a large extent, has been able to repair the damage inflicted on the economy by a diarchy that controlled levers of power at the Centre for ten years. To quote Shakespeare, ‘There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune.’ Unlike his immediate predecessors, Modi’s modernisation agenda is all about the fortunes of the future.

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