Quo vadis, Modi 2.0?

“A week is a long time in politics,” Harold Wilson is supposed to have quipped on his way to victory in the 1965 British Parliamentary election, the first Labour triumph in 14 years.  If seven days are too long, seven months must surely be an aeon, or so it would seem to the rather beleaguered Narendra Modi government at the start of 2020, after its famous victory last May (a Joseph Lee 1974 cartoon titled ‘Victory …with strings’ showing Mr Wilson as Julius Caesar and fettered with ropes labelled unemployment, business confidence, opposition politics, Scots-Welsh nationalism, among others, would seem especially apropos for Mr Modi now).

Opposition parties, the media (both local and especially the global) and the commentariat have declared open season on the government and rightly so.  Its inept handling of the vexing issues of the day — Kashmir, citizenship Act and registrations, seemingly spontaneous protests by not just young students but also by older citizens — is the least of the grounds for the opprobrium.  More fundamental concerns with basic values and observing democratic norms not just in letter but in spirit as well should trouble even otherwise thinking supporters of the present dispensation — and they have.

Some of the criticism is sheer hyperbole, calling the present turmoil India’s second struggle for Independence.  That was supposed to be in 1975-77, against the Emergency.  But even those who believe politics is the art of the possible and not a Sunday school lesson in morality cannot ignore the fact that the government’s management of the economy is less than satisfactory.  The sounds of economic thunder may have appeared distant when first heard a year or so ago, but now they are within the audible range of even those wearing ideological ear buds.  

Some obfuscation prevails even in current economic commentary.  A recent column by William Pesek headlining India as having the worst economy in 42 years has gained much traction.  The writer rightly says that the nominal rate of growth of 7.5 per cent is the lowest since 1978.  Another pundit avers that the 14.5 per cent rate of growth needed to reach a $5 trillion economy (reckoned in real terms), is impossible to achieve.  But surely the correct concern should be with the real rate of growth for the current year (which at 5 per cent is nothing to write home about) or the real rate of growth needed to reach the $5 trillion goal in five years (which is still a near-impossible 9-plus per cent).

But let us concede that issues such as rates of growth and budgetary deficit are too arcane for the aam aurat, and her perception is really what matters at the ballot box.  Mr Modi might think that just as he successfully rode the demonetisation storm to unprecedented electoral success not just in Uttar Pradesh but all over India as well, he might overcome the current disquiet by appealing to nationalistic and xenophobic sentiments.  This is evident from the twin thrust he and his second-in-command Amit Shah appear to be following.  One takes the high road of persuasion while the other takes the low one of threats.

But surely the otherwise astute duo must realise that just as armies cannot be expected to march on empty stomachs, voters cannot be expected to re-elect regimes that hurt their pocketbooks.  The unintended collateral effect of notebandi was a long spell of low prices of essentials, especially food, which greatly cushioned the blow.  Now we have a lurking iceberg only the tip of which is beginning to surface.  In the last two months, prices of some necessities have gone up alarmingly, as confirmed by the recent retail inflation data.  Arhar dal has gone from Rs 70 to Rs 85 or more a kilo, sugar from Rs 33 to Rs 39 and the cheapest edible oil from Rs 80 to over Rs 90.  But we talk of only the onion prices and breathe a sigh of relief that they are coming down sharply.

We have not really understood what caused the onion inflation.  This column had pointed out that while onions typically follow a seasonal cycle of low and high prices, “a breakdown of competitive markets is the root cause of vegflation” (“The onion enigma,” October 8, 2019).  This current spike was both much higher (up to Rs 110 per kg) and of a longer duration (September to December).  To understand how that came about, plot political events (elections in Maharashtra, poaching of opposition leading lights, Enforcement Directorate enquiries against opposition leaders, among others) against prevailing onion prices.  It should not be too difficult to join the dots and come to the conclusion that otherwise vanquished political formations are still capable of erecting significant economic roadblocks.

Mukul Kesavan has observed perceptively “Narendra Modi is not a time server… [H]e serves a cause larger than himself... to successfully redefine citizenship … [and] approach the election of 2024 at the head of a putatively Hindu nation” (“The foundation is laid,” Business Standard, December 29, 2019).  But he cannot get there if his government ignores atte dal ka bhav.  Their road map cannot forget the fact that the Nav Nirman movement which was the spark that brought down the Emergency regime sprung from students agitated about their mess bills.

The writer is an economist