Lok Sabha polls 2019: 5 things Modi should do after BJP's recent defeats

You cannot ignore the fact that the vote in Madhya Pradesh, Rajasthan and Chhattisgarh elections was not just against local BJP leadership in these states, but also against the Modi govt's policies

Around every powerful person, there invariably are some people who would perennially look at a silver lining to every dark cloud. So, it is hardly surprising when you hear some people pointing out that the Bharatiya Janata Party (BJP) managed “respectable” vote shares in Madhya Pradesh and Rajasthan, even as it lost Chhattisgarh in a surprisingly one-sided game. And the Chhattisgarh Assembly election could have been worse for the BJP if it was not for the Ajit Jogi-Mayawati alliance.

The vote-share defence is often given by those who believe the BJP would recover in the Lok Sabha polls, as that would be a vote on the Modi government’s record, and on his leadership. Such analyses, however, ignore the fact that the vote in the three state elections were not just against the BJP's local leadership in the states concerned, but equally against the Modi government’s policies.

Unless the Modi government tries to reach out to the electorate in the next 70 days — before the Election Commission announces its model code of conduct by the first week of March — and fixes the things that have disillusioned supporters, the decline for the BJP could be as precipitous as the one the Atal Bihari Vajpayee government had seen in 2004. Then, the BJP had won these three states in the 2003 Assembly polls, but lost the Lok Sabha polls subsequently, despite performing well in the states concerned.

Here are five things that Modi could do to prevent the fate Vajpayee had met with in 2004:

1. Address agrarian distress

Even before Modi had become the prime minister, senior BJP leader L K Advani had described him as a great event manager. Over the past 54 months of his tenure, the prime minister has displayed his skills as someone who understands optics like few others in Indian politics. However, the Congress is increasingly showing it has learnt a trick or two.

Since December 11, when the results of the Assembly polls came out, the Congress has succeeded in capturing public imagination, first with taking time in appointing its three chief ministers, then with their oath-taking ceremonies, and finally with farm loan waivers within hours of forming government in Madhya Pradesh and Chhattisgarh. The BJP governments are clearly under pressure. The Assam and Gujarat governments have now announced farm loan and power tariff waivers, respectively. Clearly, the Congress and its president Rahul Gandhi have stolen a march on the BJP.

Politically as well as for long-term betterment of Indian agriculture, Prime Minister Modi would gain little by announcing cosmetic measures, like debt waiver, in the next few months. A farm debt waiver done by the Centre now would hand Gandhi a moral win.

The PM would be better off with the government taking steps to address and strengthen the fundamentals of the agrarian sector, including more investment into streamlining supply chains and putting in place cold storages to help farmers get remunerative prices for their produce.

The Modi government could also learn from the example of Telangana, the only state that returned the incumbent government to power in the just-concluded Assembly polls to five states. The K Chandrashekar Rao-led Telangana Rashtra Samithi government implemented the ‘rythu bandhu’ farmers’ income support scheme, which ensured Rs 8,000 per acre annual income support to the state’s farmers.

The Modi government could start by launching a similar scheme countrywide for the rabi crop, which will be harvested by April, when the Lok Sabha elections will be in progress. An income support to farmers, deposited in their Jan Dhan accounts before the model code of conduct is enforced, could help the BJP arrest the angst against the Modi government.

2. Put more money in the rural economy to help the landless

Farmers are a vocal community across the country. It has the ability to force political leaderships to listen to their collective voice. However, marginal landholders, forest dwellers and the landless have largely gone unheard.

Earlier this year in March, the landless and small landholders of a region of Maharashtra walked nearly 150 km on foot from Nashik to Mumbai to make their voices heard. Demonetisation, the subsequent goods and services tax (GST), and the Centre’s tight fist on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) allocation has hurt marginal farmers and the landless the most.

Demonetisation led to a crisis of liquidity in rural areas. It also hit the informal economy. With real estate already in a slump, the marginal farmer and landless could not find sufficient work in semi-urban and urban areas in between agriculture seasons. The lack of MNREGS work also robbed them of the extra money they used to earn.

The Modi government’s response to rural crisis has been to give cooking gas cylinders, construct roads, and provide affordable housing and electricity, but none of these helps improve the issue of liquidity in rural areas. The government needs to think either in terms of universal basic income, or help a common villager, both men and women, find work near their homes to help revive rural economy.

3. Heed the experts on demonetisation and GST

Prime Minister Modi, if he fails to return for a second term to redeem his legacy, is likely to be remembered for demonetisation, just as 14th century ruler Muhammad-bin-Tughluq is remembered to this day for demonetising gold and silver coins. There is now a consensus that demonetisation, which Modi announced on November 8, 2016, was disastrous for the economy, and it failed to achieve any of its objectives, whatever they were. Similarly, the Modi government hurried with the implementation of the GST.

The Modi government sought to remedy the GST rates in the weeks leading up to the Gujarat Assembly polls in December 2017. The loss in the Hindi heartland states in the recent Assembly polls and with Lok Sabha polls less four months away, it is again preparing to take remedial measures. The PM has said 99 per cent of the goods would now be covered in or below the 18 per cent GST bracket.

One should hope the Modi government would heed the experts on economic policy making in the remainder of its current term.

4. Protect institutions

The Modi government has been criticised for eroding the autonomy of institutions such as the Reserve Bank of India and Election Commission. The electronic voting machines, or EVMs, continue to be suspect in the eye of many. The government’s handling of the crisis in the Central Bureau of Investigation has also led to accusations of heavy-handedness. The Modi government and BJP have also not been consistent in their dealings with the Supreme Court. BJP chief Amit Shah is on record criticising the Sabarimala verdict of the Supreme Court.

In the remainder of its current term, the Modi government should strive to protect the autonomy of institutions like the RBI and Election Commission. The edifice of the Indian democracy rests on strong institutions.

5. Espouse a clear trade policy and continue with fiscal discipline

The Modi government has an unblemished record when it comes to fiscal consolidation. However, with the defeats in Assembly polls, there is both the pressure and temptation to give up on fiscal discipline. However, this could be a treacherous path to traverse.

Breaching fiscal consolidation now, the Modi government would run the risk of the markets punishing it, and a possible loss of face among urban middle-class voters, who are still supportive of the government. It is clearly a difficult choice for the Modi government – damned if it does, and damned if it does not.

The Modi government’s weakest suit has been the handling of the export sector. The euro-zone crisis indeed affected Indian exports in the first couple of years of the Modi government. However, the government failed to contribute creatively to help the sector revive. On international trade policy, the Modi government has tended to imitate the Donald Trump administration without espousing a clear policy of its own on tariff restrictions on imports.