More questions on saaf niyat

In the last dispatch of Clay Square, I had said that in the days ahead I will look at the Narendra Modi-led government’s tenure from the prism of its own self-congratulatory slogan: “Saaf niyat, sahi vikas”. Last time (‘Saaf niyat, not really Mr Modi’, June 22, 2018), I had written about Mr Modi’s duplicity when it came to attacking corruption in India’s public life. The truth is, his government has, at least till now, done everything to protect the opaque manner in which political parties are funded in India. To be sure, funding of political party using unaudited money is the central reason why there is no incentive in our political economy to curb corruption. As such, he does not have, in my view, the moral high ground to tell the rest of the country about corruption. That is not to suggest, or indeed deny, that he ever occupied such an exalted stature. Regardless of what laws could have been passed or not, Mr Modi could have, in line with his carefully curated image of a fakir and an auliya that he projects repeatedly, decided to at least make his party, the Bharatiya Janata Party (BJP), come clean on its finances. Another similar action, which does not require that mirage called a Rajya Sabha majority, is to announce that the BJP will come under the purview of Right to Information Act. Of course, many readers might think it is downright bizarre to demand such action from the prime minister in today’s world. Perhaps, it is bizarre. But not any more than the same lot listening sheepishly to holier-than-thou sermons from the same politicians. It also shows, quite sadly, how bereft of idealism India’s public life is. Indeed, how delusional as well.

Ideally, I would have liked to move on to issues such as the state of education or health care in India and how policies have impacted these critical sectors. Or indeed, on the crucial matter of economic growth itself. But, in the weeks since the last dispatch, the government has gone to town claiming some more achievements of questionable intent (or niyat). These include the announcement of Sashakt (a new government scheme purportedly for dealing with the enormous mountain of non-performing assets in the banking system) and the amendments to the Prevention of Corruption Act (which was sold to the public as a move aimed at protecting honest public officials from harassment). There are other examples of suspect intent such as the sham of trying to put in place a new law to curb mob lynchings, which have become the order of the day, but let’s focus on just these two for today. 

It appears that Sashakt, which actually means “empowered”, ironically enough has been floated with the sole intent of disempowering the one true reform undertaken by the Modi government — that is, the Insolvency and Bankruptcy Code. If one looks at the specifics of Sashakt, it becomes clear that the government has no real answers to the questions that the critics have asked — such as, where is the money in the market to fund the proposed alternative investment funds or indeed, why at all must we have Sashakt when we have the IBC framework? One of the key arguments forwarded was that the IBC regime is getting overly burdened. But, if so, shouldn’t the answer be making the IBC more sashakt (empowered) instead of trying every lousy trick to hold off projects being sent to the IBC docks for dismantling. The more likely truth is that the IBC process is not leading to high enough recoveries and this is becoming hugely costly for the government in political terms. The best result for Sashakt would be if it manages to avoid companies being subjected to the IBC process. Perversely enough, this will happen now with the help of the same public sector banks and the same bankers who made the initial mistake of extending the loans that turned bad. The worst aspect of Sashakt is not the minutiae, but the murky intent with which it has been introduced.

The second change — the amendments to the PCA — too has been undertaken with equally perverse intent. The central change is also the most repugnant one as it provides all public officials with another layer of protection from even an enquiry by an anti-corruption agency, including the Central Bureau of Investigation. According to the new law, no government official can be investigated without the prior approval of the Centre or state government. If one thinks through real-life scenarios, such a “protection” will place ordinary public officials even more directly under the thumb of their political masters. Corrupt politicians can now better protect their enforcers while using the same ability — that is, to allow investigations — against honest and unyielding officials. It is not hard to imagine that in the real world, this provision will actually protect the corrupt and further harass the honest. Real reform would have been to make anti-corruption agencies more independent of political interference while improving their accountability. But that wasn’t the intent. Sadly.