All the current problems faced by Modi – the parliamentary gridlock, failure to pass key legislation, the lack of new energy in the economy, and growing business disillusionment with him - can best be explained by the wide gulf between the statements of the two Rahuls.
Modi has allowed himself to be trapped by the aggressive repositioning of his brand by one Rahul, and has failed to live up to his real image and playing to his strengths, which is what the Bajaj Auto Rahul was trying to say.
The first rule of success is to play to your strengths, not try to cover up your weaknesses. The second rule is, never forget the first rule. Rahul Gandhi has made Modi forget both. He has half-succeeded as Modi has obliged him by being defensive about what he is.
It is clear what Rahul Gandhi is trying to do. He is attempting to reposition Brand Modi as anti-poor and pro-cronies, and since the former Gujarat CM was indeed pro-business in his earlier avatar, this is not unbelievable. To protect his left flank and his image of being incorruptible, Modi has been trying to distance himself from his earlier image - thus neatly falling into the Congress trap. In trying to grab the old Congress space and to rebut the anti-poor slur, Modi has nearly lost his own USP. He has abandoned his strengths to embrace unlikely success by working on his perceived weaknesses.
The funny thing is the man who practically invented the idea of presidential-style campaigning in the Indian context has faltered in the two areas that were considered his strengths – personal brand building and communication. His ultra sensitivity to Rahul Gandhi's attempts to push him back into the crony slot is going to cost him not only his accepted image of business-friendliness, but also lead to failure in his efforts to reinvent himself as an inclusive development icon ("sabka saath, sabka vikas”).
Modi seems to have forgotten that business-friendliness and development iconhood are not incompatible brand values. He has flouted an elementary law of branding: that you should not try to distance yourself from what are key elements of your brand personality. The following words describe Modi’s brand perceptions best: “Business-friendly”, “Incorruptible”, “Hindu nationalist” and “Man who gets things done.” To line extend this brand image to “Development Icon” is not a stretch, provided you retain your core strengths. You do not become a “development icon” by distancing yourself from business – which holds the key to development.
Modi is mistaken if he believes that to be seen as pro-poor you have to distance yourself from your business-friendliness. Any college kid with a rudimentary understanding of economics knows that it is business that creates jobs; governments can only enable and offer doles. Even the unlettered farmer or farm labourer knows that schemes like NREGA and government handouts are substitutes for real jobs - and not sustainable. They know farming is a livelihood business, NREGA a placebo. They would like Modi to assure them that there are real jobs to be had from development – and this needs political communication in order to connect the dots from government policies to expected outcomes. Failure to do so is what is costing Modi his loss of stature.
Modi's catchphrase ("sabka saath, sabka vikas") is believable only because of his track record in Gujarat, where he encouraged businesses to focus on business and allow government to focus on governance. By trying to reposition himself as pro-poor by announcing all kinds of schemes he has in fact moved in the direction of Congress populism - and away from his own brand strength areas. He is trying to rob the Congress’ clothes – and will surely fail. The Congress’s brand values are “Pro-poor”, “Mai-baap Sarkar”, “Secular” and “Easy on the Corrupt”. By trying to occupy the Congress’ political space, Modi is pursuing the wrong course. The right strategy for him is to connect the dots. How difficult is it for a politician to state that businesses create jobs and tax revenues, and this holds the key to further job-creation and help for the poor.
Modi has to listen to business, and this does not mean he has to encourage cronies. His brand image is strong enough to withstand labels like “suit-boot-ki-sarkar”. In fact, he should turn the phrase on its head and show how one of India’s most progressive icons, BR Ambedkar, was into suits and boots, and clearly said that capitalism was the route out of caste slavery and poverty.
Rahul Bajaj, one of the cleanest businessmen in India, is quoted in a Times of India report today (8 August) as saying: "I can say crony capitalism will not flourish under Modi's rule. He is a clean guy....". But there is an important "but" to Bajaj's statement. He avers that the NDA government is neither allowing businessmen to speak about their concerns, nor allowing them to meet up with Modi. This is why he says this is not Modi's government - that is, it is not the Modi we knew as the dynamic CM of Gujarat. Modi has alienated his strongest constituency.
The Prime Minister has also neatly fallen into another trap laid for him by the Congress Dynast. Using his own words ("Na khaunga, na khane doonga"), the Congress has used every opportunity to label the BJP as corrupt and Modi as the man presiding over this corruption, reducing the space for policy flexibility. This has forced the Modi government into adopting bad Congress-like policies - a draconian black money bill that will probably fail, a reluctance to abandon retrospective tax laws, and an unwillingness to appear soft with business.
As Bajaj noted, the new law allows black money holders to declare their illegal hoards during a 90-day window (which ends on 30 September), offering them freedom from prosecution at the cost of a hefty 60 percent tax rate. It will do no good, as tax evaders will wonder whether a government which has not rolled back retrospective taxation will not come around and someday say it will now prosecute them. They may thus be willing to take their chances with the tough law (which promises 120 percent tax, and 10 years in jail if caught) in the hope that the courts will take their time to decide their cases.
Bajaj says the government's best option was to ask the Supreme Court to allow it to frame a new amnesty scheme to bring back black money – as this writer has advocated repeatedly. The logic is simple: by offering amnesty and privacy protection, the government not only earns tax money, but also garners resources for growth. This money would have helped the government drive growth through increased public spending. The harsh black money law, in fact, has sent businessmen scurrying to become NRIs – and outside the jurisdiction of India laws. How much good with that do?
If Modi has to rediscover his mojo, he has to become the old Modi once more. This does not mean he has to abandon his social sector schemes – those can’t do any harm – but his future lies in his past. A business-friendly PM is what India needs, not a bleeding heart populist who shuns business. He should leave that to Rahul Gandhi and Arvind Kejriwal, and let them slug it out for that title. A mildly Hindu image is not a weakness either, as long as it does not become overtly majoritarian and self-destructive.
If Brand Modi is fraying at the edges, it's because he has lost sight the fundamentals of brand building and strengthening. Time he read the old branding texts once more.
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