Fortune Is A Fickle Friend

Fortune Is A Fickle Friend

Ideals are peaceful, history is violent-Fury (2014)

Aphorisms, I suspect, are the writer’s handiest tools. Their pithy wisdom provide ready hooks to expand an argument or narrative upon. This government too, with its acronyms and slogans, started off lucky, but where are the delightful surprises for the rest of us?

At its goading, India too is experiencing an ideological shift, but it needs to be given biting teeth to join the party. And the shadows, even at 21 months, are lengthening.

The socialists and communists, the political parties associated, their influential supporters, the rank and file, are in a fury of dissent. To build lost heft, they are joining forces with anyone handy, trying to leverage victimhood - amongst castes, tribals, minorities, secessionists, anarchists, even Islamic terrorists.

But at an economic level, progress, even though it has been slowed by vote bank politics, cannot be stopped entirely. The forwards and kickers have been waiting in the wings, ever since the benefits of 1991 began to appear.

The rewards of liberalisation and competition, introduced by stealth, and in the teeth of a balance-of-payments crisis, nevertheless took the shine off old school socialism. They delivered consistent, near double-digit growth, and on the promises and addictions of capitalism - infrastructure, consumerism, technology, aspiration, money, mobility.

But then, since the next logical step did not come about, neither did the double-digit roar. Instead, socialism picked itself off the floor and made a come-back. This time it didn’t scream against competition, private enterprise and foreign investment. Instead, it set itself up as the moral arbiter, demanding to know what was the use of GDP growth without jobs?  

It ignored the millions raised above the poverty line, the rise in life expectancy and per capita income, the PPP parities, the urbanisation, the job mobility, the talk of a rising tide raising all boats.   

This neo-socialism, because the Marxist/Leninist/Stalinist/Maoist/Castro brand was dead or dying globally, did however have a point. Things were not moving nearly fast enough to cope with the needs of over a billion people.

And so, by default, the leftist intellectual discourse of all the lost decades was reinstated. Business and industry returned to being the dirty words they once were, sneered at for not counting amongst the voters, alongside others, like profit and greed.

Still, it was too late to turn the clock back. Prime minister PV Narasimha Rao, then finance minister Manmohan Singh, and the World Bank, had done too good a job of it. All that was possible afterwards was to put speed-breakers in its way.

But later, the socialists decided to exploit the growth they could not wreck. The larger economy, up from less than half a billion to $ 2 trillion, could afford more welfarism, and perhaps yield grateful votes in perpetuity.

And though this calculation went awry, welfarism is now firmly embedded. It cannot be reversed without dire consequences, whatever be the bill for development.

When Modi emerged from Gujarat onto the national stage in 2013/14, the voter thought the time had come at last to see economic pyrotechnics. It thought, he would promptly shift gear, put on speed, and aim for the brass ring.

But 21 months later, there is a sense of frustration. What happened? Why does Modi as prime minister not seem to be the same man who won the first majority in 30 years?

Where are the big-bang second-generation structural reforms that seemed imminent? Why is no attempt made to deal firmly with the disruption of parliament? Why does this government resemble the last one in so many of its policies, and yet not fight back when it is accused of communalism and stamping on personal freedoms? Why is it growing bigger instead of downsizing?

The 1991 liberalisations have endured for 25 years precisely because they were too much of a departure for any subsequent government to reverse. Almost none of it involved new laws, only liberal union budgets and executive action.

But, in 2016, the Indian habit of building amendments and corollaries, has reintroduced elements of the infamous licence-permit raj. The socialists, minority obscurants, and caste inheritors of reservations and quotas, instead of  the development politics of Modi, still rule the roost.  

Even for this government at the centre, and the BJP ruled states, development is pursued defensively, like a guilty secret. The accusations of crony-capitalism, favouring business and industry over farmers and the poor have hit home. As well they might, in the vacuum created by not doing very much.

But the economic roar we want cannot come about like this. It needs freedom to innovate and grow, unfettered by state supervision. The state must encourage and facilitate, as it once did in China and Japan.

There needs to be low taxes, cheap and abundant utilities, a modern infrastructure and connectivity, a convertible currency, free movements of capital, expanded banking and financial markets, freedom to hire and fire at will, land on demand, a judiciary that works efficiently and hands down judgements within a reasonable time, a security environment that is reliable, and many other hallmarks of a competitive business environment.

Whatever bits of these things have been introduced, are still calibrated, rather than free and unlimited.  Corruption and delays remain endemic.

A true open sesame to unleash potential resides only in an Aboriginal dreamtime. But, still, the opportunity to make it all happen, is staring this government in the face.

For: Mail Today

(899 words)

February 21^st, 2016

Gautam Mukherjee