Misplaced Priorities, The Burden Of Expectations And Social Challenges Mark Modi's Second Year As PM

Last year, India saw an overwhelming victory for the BJP and Narendra Modi, who nearly single-handedly ran the high-pitched parliamentary election campaign. Mr. Modi was sworn in on 26 May last year, as the 15th Prime Minister of India, in a high-profile event, the type of which has now become trademark of everything that the leader does.

A year down the line, "report cards" are flying thick and fast, often with vastly differing assessments.
There has been a trend lately in large democracies, like the US, and more so in India, of divisive politics that lack in the bipartisan spirit necessary for delivering effective governance. With Mr Modi, an equally deep divide characterises a large section of the populace and news media. Therefore, I have felt it necessary to disclose my own political beliefs at the end of this article.

In my opinion, there have been two separate issues muddying analyses of Mr. Modi's first year in power. For one, much of the media has misdirected its focus on largely irrelevant issues, while ignoring those that deserve far greater scrutiny. Secondly, the government itself must be assessed on not only its plan for growth but for the steps it is taking towards development.

First, the focus should have been more on the performance of the government headed by Mr Modi rather than on the prime minister himself. However, Mr Modi himself has transformed India's parliamentary democracy into a sort of a presidential one, with much more centralisation of power in the Prime Minister's Office (PMO). With such centralisation of power, one should also hold the BJP and the NDA responsible for any underperformance, if and when it happens. If and when there are signs that this centralisation of power is hampering governance, as responsible ruling parliamentarians it becomes their responsibility to rein in and, if necessary, to revise the current arrangement.

B-School faculty members always tell their students to be careful about expectation management. Tata Nano, if one purely went by all the glowing articles that hit the press before its launch, should have been selling in millions now. Although no one can exactly pinpoint why Nano failed to achieve such an outcome in reality, one area of agreement has been that the huge expectations that the high pre-launch press coverage generated worked against the brand. Be it in business or in politics, it is always prudent to under-promise and over-deliver. However, in politics this dictum has never been followed, in India or elsewhere. Therefore, the customary hyperbole of Indian politics needs to be factored in while judging the performance of the first year of Modi's government. A realistic benchmark of evaluation would serve the nation better, and is therefore necessary.

We live in a generation where the media creates demigods and villains out of public figures. President Obama realised it in 2015, in his State of the Union speech when he noted than sensible leaders, being representatives of the common people, should use their heads instead of "reacting to headlines". The media in the US as well as India are highly opinionated and given to sensationalism, often at the cost of objectivity. While analysing his first year of governance, many journalists seem to be reacting to the Prime Minister's persona and overblown promises rather than his performance. There also runs a perception of Modi's self-obsession, which naturally gets magnified under the lens of India's crowded news media.

More important parameters of progress get lost along the way.

What actually deserves most scrutiny in this government's work on infrastructure related to human development, in particular education and healthcare. In the clamour of building hard infrastructure, the nation seems to have forgotten all about these two soft infrastructures that become even more critical given India's demography (it is home to the world's largest youth population).

Modi's predecessor, Dr Manmohan Singh apparently suffered from the same pursuit of GDP increase, which Amartya Sen termed as "growth-mania". India needs to recognise that sustainable and higher GDP growth does not need a magic pill in the form of Modi or any other leader -- it needs productive and healthy citizens.

The revised budget allocation in the 2014 budget, as well as the allocation made in this current budget, unfortunately saw a significant relative cut in both these two critical areas of nation-building. Kailash Satyarthi made an appeal for investing more in education globally, whereas India, in spite of already being in the lowest category here (a low human development rank of 135 in 2012), inexplicably made a further cut.

It is evident that to compete in the global economy, investment in education is essential. South Korea had been similar to India in the early 1960s, and India was ahead of China in most socio-economic indicators until the late 1970s. Where these two nations diverged from India was their focus on quality access of universal primary and secondary education, which are globally recognised to be part of public goods.

Setting up new IITs and IIMs, to fulfill the aspirations of the middle class, and depriving the underprivileged segment of a minimum quality of primary and secondary education in the 21st century, is a crime that had been committed by the UPA, and unfortunately this government seems to be following suit. The quality of the majority of government schools across states has been unspeakable, with millions of vacancies in sanctioned posts of teachers. The 2013 Annual Status of the Education Report (ASER) shows more than 10% increase in enrollment of students in the six-14 age group in private schools in a period of seven years (2006-13), taking the figure to 29% in 2013; this effectively means enrolment in private schools grew by 55% in seven years.

The task of improving the quality of elementary education in our schools is not something that can be done easily. Allocating a few extra funds to the hugely indebted states is not going to solve the problem. Neither is passing mere acts like the Right to Education (RTE), as the last government did.

The government thought about calling a joint session of parliament to overcome the number deficit in the Rajya Sabha for the controversial Land Bill, now stuck in a series of ordinances. As Indians, we would be most assured had such a gesture been sincerely tried to solve the quality problem in India's state-owned primary and secondary schools. The 2014 Land Bill act did not need improvements on a war footing within a year, but elementary education in India has been lagging for decades. Our public healthcare system is in a similarly dire state.

On the agrarian front too, significant cuts in social spending to controlling Minimum Support Prices (MSPs) of various agro-products (to tame food inflation) are something that could have been avoided in the very beginning of this government's rule. Mr. Modi might have been lucky with lower crude prices, but Indian farmers have not been lucky with the weather.

The JAM (Jan Dhan, Aadhaar and the Mobile) trinity, hyped as a panacea for all social ails needs time to stabilise. The Supreme Court has time and again warned not to make the Aadhaar card mandatory for any social schemes yet. While a scheme addressing basic financial inclusion like Jan Dhan Yojana has been long due, it needs careful nurturing over many more years to be effective.

Reduction of leakage in social sector spending is always welcome with technology and financial inclusions, but it should not be done by reducing the relative allocation itself. Moreover, such cuts do not help the fiscal situation much, but generate the perception that the government is pro-rich and anti-poor.

The credit claimed by the government on auctioning of natural resources like spectrum and coal is actually due to activist-lawyers like Prashant Bhushan, and stamped by the Supreme Court. The government has rightfully implemented it at a good speed. Similarly, on foreign policy, as Mr Modi spent 52 days out of his first year visiting 18 nations, there is a legitimate view that the person has sold himself more than the nation. We are yet to see proof of marked improvements in actual Foreign Direct Investments (FDI).

India needs development more than growth. And this means acknowledging that the money necessary for developmental spending, other than reducing leakages, cannot come without an increase in tax revenue, and therefore without higher growth rates. As American writer Edward Abbey said: "Growth for the sake of growth is the ideology of the cancer cell". The BJP's last Prime Minister Atal Behari Vajpayee also made strides in infrastructure, from roads to telecom, but had to face an unexpected defeat in 2004. There has always been money for higher spending in social sectors including basic education and healthcare, but neither the last government nor this one so far, has shown any interest in collecting those hundreds of billions of dollars in taxes foregone. On another front, this government has done well by passing a tough Black Money Bill. No tax relief to the salaried middle class in this first full year's budget probably has been a negative.

"Make in India" and promises to generate a million jobs a month will remain extremely difficult to achieve, and even more so in the futureif India continues to focus more on the speculative sectors (stock market, real estate) than the real economy.

Inflation in the economy has been down, thanks to the global environment and to the RBI. The GDP growth rate has already picked up (official data based on market prices), or in the process of picking up, it is claimed. Though there seems to be stability in the global economy with ample liquidity, growth remains edgy and an atmosphere of uncertainty and risk aversion among global investors remains, particularly on the timing and speed of interest rate hike that the Federal Reserve of the US may undertake.

So, it has been a mixed report card, given the external and internal environments. For acchhe din Indians can only hope that the government prioritises socio-economic sectors for development to take the country forward.

Governing India with its federalism and constitutional institutions is not an easy task. Mr. Modi should be given time. He has our mandate until 2019. Short-termism, in a way, has been rooted in our culture and is perpetuated by the news media. Building nations take time and we need to allow the Modi government to do its work even as we keep a watchful eye.