Month: June 2019

Top three challenges before Union home ministry today are: Kashmir unrest, infiltration and Left extremism. If there is anyone who can decisively attempt to take on these challenges, it is Amit Shah

In elections such as the one that the Bharatiya Janata Party (BJP) won spectacularly in India recently, it is not always easy to zero in on a single person’s contribution to the victory. India’s electorate is massive (830 million people were eligible to vote in the recent polls); and it is diverse, spanning different demographics, cultures, languages, and socio-economic classes. Yet, one man’s contribution to the tsunami-like wave that gave the BJP 303 seats out of Lok Sabha’s 543 clearly stands out. And that is BJP’s president (and now India’s home minister), Mr Amit Shah.

Mr Shah is often described as being his party’s master strategist, a doer who is single-mindedly focused on tasks that are prioritised for him by his party and his leader, Prime Minister Narendra Modi. In 2014 and 2019, that task was of winning the parliamentary elections. In both those, he excelled. He went about those tasks with meticulous planning and discipline, transforming the party into a well-oiled machine that has a dedicated, loyal, and hardworking cadre of workers at every echelon—from the national level; the state-levels; and down to district levels—across India. No other Indian political party has the sort of structure that the BJP, particularly its electioneering machinery, has.

Mr Shah’s efforts bore fruit. The BJP, which was considered to be a party whose support base was predominantly in the north, central and western India, has now spread its influence and garnered support in the east. In Bengal, in the 2019 elections, it won 18 seats out of a total of 42, a feat that surprised many analysts who may have been of the belief that the eastern bastion couldn’t be breached by the saffron party. The 303 seats that the BJP won show that its span of influence now covers much of India, except perhaps the south where it is still considered a northern party of Hindi-speakers and where regional parties dominate the political landscape. Yet, in the southern states, which account for 130 seats, the party and its allies won 30.

Mr Shah cut his teeth in politics in his home state of Gujarat where notably his tenure as home minister was marked by several controversies that led to skirmishes with the law (he was arrested and jailed in 2010 in connection with an alleged fake encounter killing by the police that had taken place when Shah was the state’s home minister). But when Mr Shah was inducted to the upper house of India’s Parliament in 2017, Prime Minister Modi is believed to have told his party’s legislators: “Amit Shahji ke (Parliament mein) aane se aap ke mauj-masti ke din samaapt ho gaye hain.’’ (After Amit Shah has come to Parliament, your days of fun and relaxation are over). That probably is an apt indicator of the kind of political leader Shah is: a highly motivated, result-oriented taskmaster who doesn’t shy away from being tough.

As home minister, Mr Shah will have lots of opportunities for big tasks and equally big challenges. Topmost on his agenda could likely be Jammu & Kashmir where there has been no elected government in charge after the coalition between the BJP and the regional People’s Democratic Party (PDP) broke down and the government collapsed. Elections in the troubled state have not been held as militant separatists are still active and terrorist attacks from across the western border with Pakistan have far from abated. The trouble in Kashmir, which enjoys several autonomous rights that are different from other Indian states, has been festering for more than two decades, and a solution has eluded most government regimes at the Centre. Bringing peace back to Kashmir and ensuring that elections can take place there peacefully is something that will test Mr Shah’s skills to their limit, yet many think that he could probably be the only person in Mr Modi’s government decisive enough to find a solution in the state.

Before the elections were held this year, the National Register of Citizens (NRC) was introduced in Assam with the objective of screening out illegal immigrants from Bangladesh and other neighbouring countries and find ways of repatriating them to their countries. It is a controversial move, but Mr Shah is a strong advocate of it. The problem of illegal immigrants from Bangladesh or other places is, however, not restricted to Assam. Other eastern states such as Bengal, Bihar and Odisha are equally affected by such influxes. And, illegal Bangladeshi immigrants exist all over India, notably in northern India. Mr Shah could possibly think of extending the register now being implemented in Assam to other states. That sort of a move would likely invite opposition and controversy, especially regarding the possibility of its misuse, but those are things that have rarely bothered him.

Mr Shah’s main advantage—besides his amply proven skills as a strategist and implementer—is the full backing of Prime Minister Modi that he enjoys. The two men enjoy a chemistry that is rare in political relationships. Mr Shah has been Mr Modi’s trusted lieutenant since the latter’s innings as chief minister in Gujarat. And, thereafter, when he was the prime ministerial candidate in 2014, as his chief election strategist. Later, after he became president of the party, Mr Shah and Mr Modi worked in tandem. The pair have been highly effective as the results of the 2019 elections demonstrated recently. Many believe as home minister, Mr Shah will wield more power and have greater clout than any other cabinet minister in Mr Modi’s government.

The other task that Mr Shah will have will be to quash extreme leftist militancy in parts of India, particularly in Chhattisgarh but also in Madhya Pradesh and Maharashtra. Left extremist hideouts in these regions have been a tough nut to crack for successive previous home ministers and, although attacks and ambushes on security forces aren’t frequent, when they occur, they take a heavy toll. In early May this year, more than a dozen security personnel died in Gadchiroli (Maharashtra) and several of their vehicles burnt. These guerrilla-style attacks need to be checked but many believe the root of the problem lies deeper. The regions where extremism thrives are typically impoverished tribal areas and a lasting solution would need to combine both, strikes at extremist groups and implementing plans to improve the lot of the local population in these areas.

Unrest in Kashmir, rampant infiltration from across India’s borders, and left extremist violence have never been easy problems to tackle. Governments in the past, including Mr Modi’s previous regime, have faltered on all of these. It is perhaps with that in mind that Mr Modi anointed Mr Shah as his home minister. If there is anyone who can decisively attempt to take on these challenges, it is him.

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Naveen Patnaik’s opponents are mystified how he has managed to stave off anti-incumbency and effectively checkmated the BJP poll machinery in Odisha

He was once known for his jet setting ways as he roamed the world, fraternising with the likes of Mick Jagger and Jacqueline Kennedy Onassis. An occasional visitor to India, the suave and sophisticated Naveen Patnaik, author, and son of the legendary Odia leader Biju Patnaik was an unlikely candidate for a career in politics.

Consequently, when Naveen Patnaik, also known as Pappu, arrived in Odisha in 1997 to claim his father’s legacy, no one gave him an outside chance. His friends and party colleagues were sure that he would not last long as he was just not cut out for the hurly-burly of the political world. Besides, he had a fleeting acquaintance with his home state and could not even speak Odia. But Naveen Patnaik surprised everyone as he lost no time in reinventing himself. He left behind the world of glamour, donned a white kurta pajama and set himself up as the new leader of the Biju Janata Dal in Bhubaneswar.

The rest, as they say, is history. The novice politician has since outwitted veterans in the field and demonstrated amazing staying power and an uncanny knack for realpolitik.

Naveen Patnaik won his fifth consecutive term in office last month, becoming one of the few longest serving chief ministers of the country. Described variously as enigmatic, inscrutable and reclusive, Patnaik’s opponents are mystified how he has managed to stave off anti-incumbency and retained his popularity ratings even after close to two decades in office. Scams and scandals have failed to dent Patnaik’s credibility, much to the chagrin of his political rivals.

Patnaik’s latest electoral victory is particularly memorable as he was up against the Bharatiya Janata Party’s powerful and rampaging election machine. Ever since it came to power at the Centre, the saffron party has been making a concerted effort to expand its footprint in the Eastern states. Though it made spectacular gains in West Bengal in the latest Lok Sabha polls, the BJP was effectively checkmated by Patnaik in Odisha. This is despite the fact that Prime Minister Narendra Modi, BJP president Amit Shah and a galaxy of leaders descended on the state to run a high-decibel campaign which often degenerated into personal attacks. For the past several years now, BJP leaders have been running a whisper campaign about Patnaik’s indifferent health and weakening grip over his party and the government essentially to confuse the BJD ranks and the electorate. But it clearly failed in its mission.

Naveen Patnaik ran up a huge winning score in the assembly poll, which was held along with the Lok Sabha election. The BJD raced ahead of its political rivals, winning 112 of the 147 assembly seats in Odisha, dropping only five seats from its 2014 strength. The BJP managed to win only 23 seats though it had set itself an ambitious target of 120.

However, there is no denying that the BJP has made inroads in Odisha, having displaced the Congress as the main opposition party in this coastal state. The saffron party may have lagged behind in the assembly but it managed to increase its tally from one to eight in the Lok Sabha while the BJD came down to twelve from the 20 it had won in the 2014 general election.

So what is the secret of Patnaik’s success? The low-key and understated Odisha chief minister, who has been embraced by the people as “our Naveen”, has reached out to all sections of society through an array of government schemes and projects. Patnaik is a runaway success with the rural poor thanks to the distribution of cheap rice, free bicycles to girls to his latest Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme promising money to farmers through direct benefit transfer. At the same time, he has also endeared himself to Odisha’s growing middle class which has been a huge beneficiary of the state’s mining boom. His party leaders maintain he may not be fluent in Odia but he listens to the people and understands them and that, they said, is more important than talking down to them.

Realizing that he was up against a ruthless and determined opponent in the recent Lok Sabha polls this time, Patnaik shed his aloof image and became more vocal and visible. He began touring the state from last December and made a special effort to strike up conversations with people at street corners. He also made a conscious effort to woo women with the promise of greater economic support for self-help groups led by them. His quiet manner and dignified responses during the poll campaign stood out in a stark contrast to the loud and personal attacks mounted against him by the BJP.

But Patnaik’s gentle exterior is, at best, a façade for he can be ruthless when it comes to protecting his turf and his image. He does not trust people, does not allow anyone to come too close and has no compunction in dumping even senior leaders and officials if Patnaik is convinced they are getting out of line or becoming too ambitious.   

The BJD chief makes it a point to change more than half of his sitting legislators during elections to guard against anti-incumbency and keeps moving around his Cabinet ministers like pawns on a chessboard to ensure they do not become complacent or lax. For instance, Patnaik did not think twice before throwing out his party’s high-profile MP Jay Panda, who was once considered close to him. Panda joined the BJP on election-eve but lost his seat. In earlier years, Patnaik had dispensed with his political mentors Bijay Mohapatra and Dilip Ray, who founded the BJD, as he believed they were planning a coup against him.

Pappu has obviously come a long way from his globe-trotting days.

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As Subrahmanyam Jaishankar joins a select group of diplomats-turned-politicians, a bigger challenge awaits him on the political front

It is fascinating the way the world forms a significant part of an Indian’s life, despite a vast terrain and diversity of its own. Having sailed and traded in the past, sent soldiers in the two World Wars and huge diasporas have helped in developing this worldview. Despite the traditional curse on crossing the seas, ‘Vilayat’ not necessarily the West, has always ignited aspirations.

Post-independence, it is equally fascinating that although foreign policy as such has rarely impacted domestic political/electoral discourse, foreign affairs players, including retired diplomats, belonging to one of the smaller central government services, have participated in it, rather disproportionately when compared to, say, lawyers and farmers who have dominated the political scene.

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Prime Minister Narendra Modi’s choice as External Affairs Minister of Dr Subrahmanyam Jaishankar, who retired as Foreign Secretary last year, is the latest move. It will majorly help in foreign policy formulation in very challenging times.

As India led the de-colonization process, first prime minister Jawaharlal Nehru, deeply conscious of its place in the comity of a post-war world, was his own foreign minister. His successors did have cabinet rank external affairs ministers, some of them really erudite, but the PM and the PMO have had the final word on policy matters.

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Inputs coming from foreign office and their contributors have always been crucial irrespective of the PM and his/her personality. Indira Gandhi had P N Haksar as her principal secretary and Rajiv Gandhi had three bright diplomats in his PMO. Narasimha Rao piloted an India without the friendly Soviet Union and launched the Look East Policy. I K Gujral was a diplomat-politician first before becoming the premier and Manmohan Singh worked the economy at home and at global conferences before taking up the big post. He was heard with respect during the 2007-2008 global economic slowdown.

Let it be stressed that in this politician-officer combine, most officers have left final decisions to politicians. With valuable insights and inputs coming from foreign affairs practitioners, the final say, as in military affairs where men in uniform matter, has always rested with the political leadership. And that is how it should be in a democracy where the politician, unlike the official, is elected and answerable.

In that sense, Jaishankar’s task will not be very different. The difference will be in deeper, bolder foreign office inputs.  

Jaishankar joins a select group of diplomats-turned-politicians. At the top is K R Narayanan. A Nehru-pick, he moved from diplomacy to academics (Vice Chancellor, Jawaharlal Nehru University) to be a minister, then as the Vice President and finally, the President.

Hamid Ansari’s trajectory was similar, as vice president via vice chancellorship of Aligarh Muslim University. Incidentally, he held office when Meira Kumar, a middle-level officer in the foreign office, was the Lok Sabha’s first woman Speaker. She has won and lost the Lok Sahha seat her father, Babu Jagjivan Ram, represented.    

Arguably though, the PMO route to politics is discernible. A solitary M L Sondhi, groomed in Nehru’s PMO, chose to join the opposition. Kunwar Natwar Singh, once in Nehru’s PMO, was external affairs minister in Manmohan Singh’s government along with Mani Shankar Aiyar, who was in Rajiv’s PMO. Some who did not join politics, got key postings post-retirement.

Although a complete ‘outsider’ at the foreign office, Shashi Tharoor was groomed at the United Nations. He fought Ban-ki-Moon valiantly before losing the Secretary General’s post. A junior minister supervising foreign office under Manmohan Singh, he has been re-elected to the Lok Sabha for the third time.

Close to foreign office but in many ways more powerful has been the position of the National Security Advisor (NSA) — because there is only one such office! Former diplomat Brajesh Mishra, the first NSA enjoyed proximity with then premier Atal Bihari Vajpayee. He overshadowed ministers Jaswant Singh and Yashwant Sinha.

The post was ably held by two other retired foreign secretaries, J N Dixit and Shivshankar Menon. Indeed, it has alternated between retired diplomats and intelligence sleuths for good reasons. M K Narayanan held that post. Jaishankar will work in tandem with Ajit Doval, the NSA who has just got a five-year extension and cabinet rank.

New to national arena and to diplomacy when he became the PM, Modi has since befriended many world leaders, not without crucial inputs from his envoys. He also placed his faith in another retired ace diplomat, Hardeep Singh Puri, a minister in his government.

His foreign office choices during the first tenure included Jaishankar, recalled as ambassador to the US to be the Foreign Secretary, even sacking incumbent Sujata Singh in the process. Navtej Sarna moved briskly from the high commission in London to Washington and Syed Akbaruddin, the ministry spokesman moved to the higher post of Permanent Representative at the United Nations.

As the first retired foreign secretary to head the same ministry, Jaishankar will be on familiar turf and will be Modi’s chief foreign policy executioner. His USP is being son of and having learnt baby steps and more from late K. Subrahmanyam, doyen of India’s national security community.

His global perspective can be judged from the languages he knows. Besides English, he speaks Tamil, Russian, Hindustani, Mandarin, Japanese and Hungarian. His first posting was at Moscow. He worked the US as Joint Secretary (Americas) negotiating the civil nuclear treaty. When Donald Trump’s victory alarmed the world and even diplomats turned undiplomatically abusive of him, as India’s Foreign Secretary, Jaishankar advised that it was essential to “understand and assess” Trump.

He should help Modi to consolidate and further deepen Indo-US ties, something his father would have approved. He has already hit the ground running what with Trump ending India’s preferential trade concessions.

Jaishankar is also a solid China hand, having been the ambassador in Beijing and worked with other China hands, Shivshankar Menon and Nirupama Rao. With Vijay Gokhale, the current foreign secretary and one who succeeded him as ambassador to China, he should make a formidable team.

With his appointment, Modi has sent a clear signal to both Washington and Beijing amidst a fierce trade war. Jaishankar’s stints in Prague and in Singapore and at some stage, in Tokyo, should help India play its cards well in a complex world.

Along with proximity to the US and a careful balancing act with China. India will continue to stay away from Beijing’s signal Belt and Road Initiative.

The Quad framework derives its geopolitical validation from India’s association and presents a unique opportunity for India to be an active participant in shaping regional security architecture with global undertones. This emphasis on Indo-Pacific is expected to be strengthened in his second term.

Surely, the other regions will also receive his stamp. The ‘Neighbourhood First’ and ‘Act East’ policies are expected to continue with greater vigour.

As for Pakistan, Modi in his second term is bound to continue with a muscular approach. He may mend relations only if there is visible change in its current policy of exporting terrorism to India. To prevent Uri, Pulwama and Pathankot, and respond if they do recur, is the challenge for the Jaishankar-Doval duo.

In political terms, Jaishankar, the only minister not elected to either house of parliament, will need to get elected to one. And lacking political experience, will have to face the Opposition. But more important is his place in the Cabinet Committee on Security, the core policy making body that Modi chairs.

 

The writer can be reached at mahendraved07@gmail.com

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Dynasts in both national and regional parties are flourishing and the NDA is no exception

Over the past five years, the ruling Bharatiya Janata Party ran a sustained campaign against dynastic politics to discredit Congress president Rahul Gandhi. In the 2014 Lok Sabha poll campaign, Prime Minister Narendra Modi would refer to him with derision as shehzaada  (royal scion) while this election was pitched as a battle between “naamdars and kaamdars”  to drive home the point that the Congress leader’s only claim to fame was that he belonged to the Nehru-Gandhi family.

And when Rahul Gandhi was defeated in his family stronghold Amethi, a gleeful BJP lost no time in declaring that the verdict proved that the electorate had rejected political dynasties. Former finance minister Arun Jaitley posted a blog on Facebook, saying that the “dynastic character” of the Congress was responsible for the party’s decline while pointing out that the BJP is one of the three “prominent non-dynastic parties in India”. One proverb that immediately comes to one’s mind is: those who live in glass houses…

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There is no doubt that the Congress has, over the years, has become synonymous with dynastic politics but the other political parties are far from free from this phenomenon, the BJP included. A study by Gilles Vernier and Christophe Jaffrelot shows that 30 percent of the new parliamentarians are from political families. The Congress has topped this list but the BJP is not far behind while regional parties have evolved into family enterprises. 

As the country’s oldest political party, which has been helmed by four generations of the Nehru- Gandhi family over several decades, the Congress comes in for greater notice and is, therefore, singled out for criticism. And when the dynast fails to deliver, as in the case of Rahul Gandhi, the attack is even sharper as is evident from the tone of Jaitley’s blog post.  
The BJP’s dynasts have escaped public attention primarily because they are not in top leadership positions. But this is explained by the fact that the BJP is a relatively younger party and, it started climbing the growth charts in the nineties. The party’s dynasts are still younger and will take time to climb to the top.

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In this Lok Sabha, the BJP’s benches will be occupied by long-term MP Maneka Gandhi who won the Sultanpur seat in Uttar Pradesh and her son Varun Gandhi who now represents the Pilibhit constituency earlier held by his mother.

Railway minister Piyush Goyal, whose father was once the BJP treasurer and mother a three-time state legislator, also belongs to the club of political inheritors. Anurag Thakur, the new sports minister, and four-time MP  from Hamirpur is the son of former Himachal Pradesh chief minister Prem Kumar Dhumal. Then there is Poonam Mahajan, the daughter of the late BJP leader Pramod Mahajan, who returns to the Lok Sabha for the second time. She is joined by Pritam Munde, daughter of the late Gopinath Munde, who is also into her second term in Parliament.

Dushyant Singh, son of former Rajasthan chief minister Vasundhara Raje, is back in the Lok Sabha, having won the  Jhalawar-Baran seat in the desert state. Rita Bahuguna Joshi, daughter of the late veteran Congress leader H.N.Bahuguna is the new dynast in the BJP. She joined the party only a few years ago.

If it is anyone’s argument that this election rejected dynastic politics, they could not be further from the truth. Though it is true that many political heirs like Rahul Gandhi, Jyotiraditya Scindia, Jitin Prasada and Sushmita Dev, have lost, dynasts in both national and regional parties are flourishing. In the Congress Madhya Pradesh chief minister Kamal Nath’s son Nakul Nath was the sole winner from the state, former finance minister P.Chidambaram’s son Karthi Chidambaram’s son has also made it to the Lok Sabha as has Gaurav Gogoi, son of former Assam chief minister Tarun Gogoi. Congress ally Nationalist Congress Party chief Sharad Pawar’s daughter Supriya Sule retained the family fiefdom Baramati, which was first won by her father in 1967. Pawar now sits in the Rajya Sabha.

The big regional winners – Odisha chief minister Naveen Patnaik, DMK’s M.K.Stalin and Jaganmohan Reddy of YSR Congress Party, are all products of political families. Patnaik, who returned as chief minister for a record fifth term, is the son of the late Odisha’s political giant Biju Patnaik, Stalin took over the party after the death of his father, the legendary M.Karunanidhi, and S. Jaganmohan Reddy is the son of former Andhra Pradesh chief minister S.Rajasekhara Reddy.

While Reddy has ousted the Chandrababu Naidu government in Andhra Pradesh, Stalin has swept the Lok Sabha poll in his home state Tamil Nadu while his sister Kanimozhi will be among the party’s representatives in the Lok Sabha.

Then there is the father-son duo, Mulayam Singh Yadav and Akhilesh Yadav of the Samajwadi Party, who will be among the five MPs from their party in this Lok Sabha. The Shiromani Akali Dal will be represented by party president Sukhbir Singh Badal and his wife Harsimrat Kaur, also known as the power couple.

BJP alliance partner Lok Janshakti Party is yet another family-owned shop. While its senior leader Ram Vilas Paswan has moved to the Rajya Sabha, his son Chirag Paswan is back in the Lok Sabha for the second time.

Dynasts argue that it is unfair to criticize them as they have been democratically elected by the people. They also argue that they have earned their spurs, having worked hard to get where they are today.

However, there is no denying that they all have a head start over other political newcomers. With elections becoming an increasingly expensive affair, they have the advantage of having access to their family wealth, which immediately pushes them in a different league. Belonging to a known political family also means their name has an instant recall value. All this inputs into building a political dynasty.

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The biggest challenge for NDA-II will be to fix the faltering economy

The opposition though could never unite against the incumbent Narendra Modi government had a fairly good chance to put up a decent fight in the general elections had it been able to pin down the Hindu nationalist Bharatiya Janata Party-led National Democratic Alliance into debating the sputtering economy and never-ending rural distress during the long campaign.

But the Modi-Amit Shah duo was smart enough to steer clear of all that and focussed on the government’s success in fighting local terrorism and that originating from across the border. The damage that Pulwama terrorist attack could have done to the electoral prospects of BJP was more than compensated by way of a daring airstrike at a Pakistani terrorist base at Balakot.

Proving all psephologists wrong as the NDA was inching towards a decisive victory with BJP alone winning 303 seats in the 542-member Lok Sabha, some opposition leaders didn’t give up their claim to the prime minister’s office till counting of votes began. Congress president Rahul Gandhi’s not unjustified tirade that cronyism as evidenced in an Anil Ambani company securing a meaty contract in New Delhi’s Rafale jet deal with Dassault of France remained in practice during NDA I regime and his slogan relating to chowkidar (watchman) was turned on its head by Modi himself.

Naveen Patnaik, leader of Biju Janata Dal who has now won a fifth term as chief minister of Orissa, was an exception who could see what was awaiting an ambitious opposition but without any bearing. A gentleman politician that Patnaik is, he kept his distance from the “non-cohesive opposition” not necessarily because his “interaction with the PM has always been cordial and he proved to be helpful.”  

If the economy does not function well, then the worst affected is the common man. The ones in the job market will be angry if employment opportunities are not there. That the opposition was not able to convert the disillusionment with the NDA’s indifferent economic performance into votes shows how cleverly Modi-Shah turned the discourse to the emotive national security issue and the Prime Minister’s success in raising the country’s profile abroad resulting in many leading companies from the US, the European Union and China making significant investments here.

But first, in what shape the economy was found when the electoral battle was fought. India’s gross domestic product growth at 6.6 per cent in the 2018-19 third quarter ended December was the slowest in five quarters. If anything, things had worsened since. There are reasons to believe that GDP growth in the year’s final quarter could be down to 6.4 per cent. The Central Statistics Office has recently further lowered GDP growth forecast for 2018-19 to 7 per cent from 7.2 per cent in January. NDA will in any case be boastful that India still remains the fastest growing economy among major nations.

For a nation with ambition of urbanisation and modernisation, it is important that industrial production should be recording significant rates of growth. But in the case of India with a population of 1.3 billion, industrial production fell steadily in the three months since December to finally contract by 0.1 per cent in March. What is particularly worrying is that manufacturing sector with a weight of 77.63 per cent in the index of industrial production shrank by 0.4 per cent in the final month of 2018-19 on top of a 0.3 per cent fall the month before.

India hardly had any export growth in the last five years. Economist Kaushik Basu, a former government of India chief economic adviser and now professor at Cornell University believes: “For a low wage economy like India, a little policy professionalism – a combination of monetary policy and micro incentives is all that is needed to grow this sector.” Unfortunately, all the government rhetoric of manufactured products, commodities and services should find their way into the world market in growing quantities has not been backed up by policy design. Economist Rathin Roy, member of the prime minister’s economic advisory council, is worried that the Indian consumption story is trailing off. He argues that India’s consumption is driven by its “top 100 million citizens” who could afford things like cars and air-conditioners. 

But the NDA II will have to contend with the challenge of providing “nutritious food, affordable clothing and housing, health and education – the leading indicators of economic growth – for the whole population,” says Roy. But it is beyond the capacity of the government to arrange subsidies and income support to ensure consumption on this massive scale. Roy says: “At least half the country’s population should earn incomes enabling them to buy things at affordable prices so that a maximum of 500 million people can be subsidised for their welfare.” Roy gives the warning that unless India is able to achieve this in the next decade, it will be headed for a “middle income trap” when it will be face to face with the reality of not being able to achieve rapid growth easily and compete with developed economies.

The country’s economic situation may be worse than the information available from government agencies. This is because official data about growth and job situation are under cloud. The institutions associated with collection, analysis and dissemination of data have been for sometime subject to political interferences. Indian data like the Chinese are now seen with suspicion by institutions and economists here and abroad. The question is asked if the official GDP data faithfully reflect the multi-year lows in growth in power generation, air traffic and passenger vehicle sales.

Moreover, according to the Centre for Monitoring Indian Economy, the unemployment rate at 8.1 per cent in April 2019 was the highest in the last two and a half years. This is in spite of Modi, an autodidact, making the promise in 2014 that his government would create 10 million jobs a year. Notwithstanding Modi’s promise to double the income of farmers by 2022, rural distress, going by their indebtedness and inability to secure officially announced minimum prices for crops, except for wheat and rice, is on the rise.

The biggest challenge for NDA II will be to fix the faltering economy. As has been seen earlier in Gujarat when Modi was chief minister (2001-14) and thereafter in NDA I rule, he is inclined to be the final arbiter in economic decision making. But a problem is there as has been pointed out by Financial Times editor Lionel Barber and Morgan Stanley head of emerging markets Ruchir Sharma. Barber writes in FT: “But it is uncertain whether he (Modi) grasps the economy’s complex challenges, or the financial system’s woes. Nor is it clear that his few advisers have the technical expertise – or courage – to explain it, to help him calibrate his kinetic policymaking.” Sharma is equally emphatic that the prime minister needs “new voices in his brain trust… more expertise in his inner circle might have helped prevent an experiment like demonetisation.” Sharma has warned that the voters will not be found forgiving if Modi makes another big mistake like demonetisation.

When private sector investment is disappointingly low, a redeeming feature is the sustained interest of multinationals, which are already here to do more. The others are arriving in India at regular intervals.  All emerging markets, including India want FDI as besides capital, it brings technology and create jobs. The Indian automobile industry is the best example of none of the major global brands wants to miss out on the promise that this market holds. Demand fall for vehicles is seen as a phenomenon that will go away in a few quarters. The latest to get into the Indian auto band wagon is Morris Garages owned by China’s largest automaker SAIC. At its Halol plant in Gujarat, MG will be making cars with 75 per cent localisation. That creates a lot of jobs. Similarly, Scandinavian furniture maker Ikea which made its debut in India in August 2018 is committed to procure at least 35 per cent of what is kept in its stores. Wal-Mart of the US completed a $16bn acquisition of India’s largest e-commerce firm Flipkart in August in the hope that the two would achieve a lot more together than each could separately.

Unfortunately FDI is still not significant in metals and mining in spite of the sector’s pressing need for foreign capital and technology. This is because at every stage leading to mining from exploration to prospecting to finally getting mining leases, investors will encounter frustratingly long bureaucratic delays. India will be a major gainer if the world’s largest producer of steel ArcelorMittal is not made to wait any longer to acquire the insolvent Essar Steel for which it has trumped all the other bidders. Insolvency & Bankruptcy Code says all resolutions must happen in nine months. But even after more than two years, ArcelorMittal has not got the ownership of the insolvent Essar Steel. Simpler rules and absence of red tape will make India an even more compelling destination for FDI.

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