Kanika Datta: Mendicancy as a policy option

In June 2012, then Prime Minister Manmohan Singh urged a gathering of economic bureaucrats to reverse the climate of pessimism - then popularly termed "policy paralysis" - and revive the "animal spirits" in the economy. In January 2016, Prime Minister Narendra Modi told Indian and foreign investors attending the second Make in India jamboree in Mumbai, "My advice to you is to make India your centre if you want this century to be your century. I invite everyone sitting here, and also those not here, to be a part of India's unfolding story. This is the best time ever to be in India."

In the four years between the two statements, it is clear that such animal spirits as the Indian economy may have been harbouring remain in urgent need of resuscitation. This state of affairs is not for want of trying on Mr Modi's part. But as the exhortatory nature of his Make in India appeal unwittingly underlines, there's a critical difference now; the transparent and hapless paralysis of the earlier government has been replaced by a culture of animated mendicancy within a policy framework.

It starts with the "tatkal ticket," as my colleague Jayant Das described it, Mr Modi quickly availed of after his thumping election victory to travel the world and exhort investors - foreign, non-resident, anyone - to put their money in the putative Shangri La that is India. This exercise has been followed by a multitude of content-lite branded programmes and tireless advocacy of the fabulous progress being achieved by the ruling dispensation, never mind what the real data tells you.

Yet prime ministerial communication to trade and industry remains petulant and admonitory. In September last year, he told a gathering of leading industrialists, bankers and analysts, "When I hear Indian companies are investing abroad and not in their own country, I am really disappointed… if you don't take risks and invest, then will you take a management consultant's job at a monthly salary of Rs 2 lakh."

The implication is that it's really the Indian and global business fraternity's fault for wilfully passing up this amazing opportunity called India. In his Mumbai speech, Mr Modi itemised the things his government is doing to create this haven - largely declarations of intent and works-in-progress. Some of this is solid stuff. But the tone of his engagement with the business and investment community at large has created the unintended effect of turning India, one of the few economies to be growing at all, into the status of a supplicant and an increasingly desperate one at that.

As the head of a federal government in a diverse country, Mr Modi may not have recognised the limits of his promises to investors (he did get one jolting reminder when Vodafone received a tax notice days after he publicly assured an end to the retrospective tax regime). Much of the initiative lies with the states and this is where the prime minister may want to focus to foster the kind of change that will make India a magnet for investments.

Ironically, it is Mr Modi who created the conditions to work with the states for an all-round improved business climate. Having swiftly and wisely jettisoned the durbar-style National Development Council meetings of all chief ministers under the erstwhile Planning Commission, he could have shaped the institutional capabilities of the newly-formed Niti Aayog to engage the states in a comprehensive plan for transforming the investment climate at the very least (it is an acronym for the National Institute for Transforming India, after all).

For instance, the assessment of state implementation of business reforms done in collaboration with the World Bank, an excellent innovation, could have formed the basis for closer cooperation. Instead, it appears to have degenerated into an exercise in pointless competitive politics among the states.

On the eve of the Union Budget, the novel and amusing element is the increasingly feverish nature of this high-level mendicancy. The prime minister and finance minister are exhorting investors to invest at every opportunity they get; the business community has been engaged in its annual exercise of exhorting the prime minister and finance minister to perform various feats to transform the economy; the rich and middle class are silently begging for tax breaks as it does each Budget. Only the poor, in whose name much of this is supplication is done, doesn't know and couldn't care less.