A silent PM-in-waiting

Mr Modi can no longer avoid speaking on macroeconomic issues

The just-concluded Assembly elections in five states reinforced a general belief that the Congress will likely be shown the door by the electorate when the next parliamentary election is held in 2014. It is, however, not entirely clear which new coalition will replace it. The markets clearly believe it will be the National Democratic Alliance, led by the Bharatiya Janata Party under Narendra Modi - they have reached historic highs on that thought. But do they have any real reason to be cock-a-hoop? After all, what does the country know about Mr Modi's beliefs in respect of the host of problems that the economy is facing? Also, what does one know about his prospective core economic team? Barring the much vaunted "Gujarat model of development" - which is really more about administrative efficiency in the delivery of services than any particular economic philosophy - Mr Modi has done little to make his views known. But while his micro focus is all very well at the state level, at the national level he needs to articulate his views on macroeconomic policy. So far he has not done so. It may well be possible that he turns out to be an unreconstructed socialist. To dispel such apprehensions, and since he is now free of campaign speeches for at least two months, he needs to speak his mind on macroeconomic policy.

There are several critical areas that need to be addressed. The first is the fiscal problem caused by the subsidies that have exploded during the United Progressive Alliance's 10 years and, as a subset, the welfare programmes that are dear to Congress President Sonia Gandhi. Will Mr Modi roll them back? Let him say so, if so. The second is his approach to industrial policy - the public sector, in particular, in which lakhs of crores are locked up. The third is labour policy, in which there have been virtually no changes over the last 60 years. Mr Modi's approach to the labour unions in the financial sector will be eagerly awaited because of the stranglehold that the Left unions currently enjoy there. Then there is the whole gamut of issues surrounding foreign direct investment: given his Rashtriya Swayamsevak Sangh background, how liberal or illiberal - or xenophobic - will Mr Modi be on this? What are his views on the degree of openness? India is now highly integrated with the global economy. Will Mr Modi reverse this trend or enhance it? Finally, there is the entire range of issues arising from the environment laws: will Mr Modi amend them so that investment can start flowing again or is he comfortable with the present regime?

His careful silence on these issues will no longer do. He must make his views known soon. Much the same thing is true of the men and women he will choose to manage the economy. If, as he seems inclined to do, he wants to run the 2014 campaign like a presidential one, he must adopt that model in its entirety - and that involves transparency in letting stakeholders know who is shaping his thinking and what they are telling him.