Jab Bharat Met India: Time For Three Big Moves

Jab Bharat Met India: Time For Three Big Moves

The continuity of Modi 2.0 belies the profound changes to come. The wisdom of the electorate has caused every second person out of over 660 million  who went to the hustings, to vote this government into power for a second term.

But now, what is needed, while the Opposition is in disarray after the thumping, almost two-thirds victory in the Lok Sabha, is a flurry of major initiatives.

The traditional political honeymoon period does not last more than a 100 days. In 2014, the early days were squandered. Bold moves were kept waiting till half way through the term, when the Opposition, such as it was, was in full flow.

And it was noisy enough to derail most of the parliamentary sessions, and  part of the legislative agenda too. Not having enough strength in the Rajya Sabha was also a  major handicap.

With a dominant Bharat flavoured team ensconced in the political leadership now, many of the erstwhile nods across the aisle and pulling of punches is expected to be done away with. Will this government soon put corrupt but high profile Congress politicians in jail as promised?

All the short term political calculations ought to be confident now. They should be based on an expected long stretch of NDA governments. The electorate has demonstrably changed. It has accepted the priorities of nationalism, security and development an d given Narendra Modi a mandate for  action. It wants to see substantial growth, and is ready for radical change to achieve it.

But this groundswell of support can only be guaranteed by a series of bold and decisive moves that puts paid to the hesitations and accommodations of the past.

At least three big moves in the first 100 days of Modi 2.0 are called for. They will also go a long way to win the important Assembly elections coming up thereafter in October.

These could be a pathbreaking  set of additions to the interim budget involving a   slashing of low yielding taxes such as the capital gains provisions, come July. 

The full budget must kickstart a faltering economy  by stimulating investment. It must put the fear of ruin into financial defaulters.

Article 35A must be revoked by presidential decree, making it possible for all Indians to live in, own land and property, invest, and vote in J&K.

This will not go down well with Nitish Kumar, who has issued his warnings against the move. But in the first 100 days, a new government walks on water and he can probably be mollified.

The third big move could be the commencement of the Ram Mandir construction in Ayodhya, using adjacent land outside the 2.77 acres that is strictly sub-judice. This would cut through the clutter, and prevent the judiciary holding the aspirations of millions to ransom any longer.

Article 370, mostly moth-eaten already, can be held over for further dilution. It can also be abrogated at a future date, when the government secures sufficient strength in the Rajya Sabha.  

The futurescape presumes not only a win in Maharashtra and Haryana, but the clawing back of Karnataka and Madhya Pradesh at a minimum. The resultant controversies generated, can be outweighed in the first flush, by the overwhelming public approval.

Let us remember, despite relentless propaganda over several decades to the contrary, that Bharat  is congenitally Saffron. It is comfortable with old myths and new aspirations. Bharat, unlike the British construct called India, does not suffer from self-conscious embarrassment. It has no emotional linkage with colonially induced shame for all things Hindu.

The BJP/NDA has found Bharat under layers of imported ideologies and the dislocations of foreign conquest. It has fine-tuned it into success, twice in a row. Bharat’s true DNA is self-assured. It has successfully integrated, assimilated and amalgamated imported influences over the centuries.

Those who point to the Green and White in the Indian flag, must see the modified writing on the wall. These advocates don’t like being told that converted Muslims and Christians are also, congenitally, Hindu.  

But, constitutionally, the Greens and Whites are indeed deserving of space and an even playing field. But this, under Modi 2.0 means parity, not privilege. Can they, in turn, work up the “Viswas”?

On the other hand, which simple arithmetic can continue to equate 80 with 12 or 2 and proceed to show bias for the lesser numbers?

But then it wasn’t arithmetic, but a species of vote bank politics that tilted the board for much of the decades since independence . Now this may no longer be feasible. Nor is the sporadic violence being resorted to in frustration.  

But what happened to the erstwhile saviours of the minorities? How did they collapse like a house of cards? Is orthodox Marxism that glossed over caste and religion, and its Fabian Socialist Nehruvian derivative, the Libleft, truly obsolete now? Or is it just hibernating through a bitter winter?

Are those family owned regional political parties that abuse socialist tenets to bamboozle their adherents finally on the slippery slope to oblivion?  They will have their enormous ill-gotten wealth stolen from their followers to console themselves in retirement. But what becomes of their flock?

The voting public, including 12.2% of the Muslims, more aware now than ever before, have shifted away, this time probably for good. Only a massive dislocation, unimaginable at present, could turn the tables.

The electorate is now responding, not to the grievances of poverty, or the call of ideology, but simple new promises more to their liking.

These are about the benefits, not of freebies and handouts, but lasting economic progress. The voter knows there is a long road ahead to accomplishment. Still, given the honesty of purpose of a rare leader like Narendra Modi, they are willing to be supportive and patient.  

A reduction in corruption all around, and its non-existence at the top where the maximum power resides, is a brand new feeling. It has never been experienced before in India. Indeed, corruption was seen as a universal way of life.

Today, when Modi talks of the Indian economy overtaking that of Britain this year to make India No. 5 in the world, and a $5 trillion economy by 2023, the young voter knows that the whole country is going to gain from this. And that is not all- India will become the 3^rd biggest economy globally by 2030, only behind America and China.

This exalted vision beats the povertarianism and the corrupt growth for a few favoured people under previous regimes.  There is surety of purpose even as lives have not changed substantially yet. But there is no hesitation. No looking back  in anger.

(1, 104 words)

June 11, 2019

Gautam Mukherjee

Which Way Now?

Which Way Now?

From communal untouchability to an aspiration for Sabka Vishwas  is quite a dramatic journey.

Now that practically one in two people vote for the BJP/NDA, it is not unreasonable to want to not only retain this huge constituency of over 300 million voters, but mop up as much of the rest as possible.

Even before the swearing in ceremony on 30^th May, reports have started appearing that BJP wants to win 333 seats in 2024, up from the astounding  solo majority of 303 in 2019. That means retaining the cross caste and creed vote it has received, and then some.

The intent is to garner these additional 30 seats from the South of India, beyond and besides Karnataka.

And perhaps, from the Muslims, spread across the nation, once thought of as a bridge too far.

In the meantime, the Muslims have stopped being a monolithic vote bank for any party.  This includes the Congress, which shares this minority vote with the Yadav/Dalit/Muslim combines of the SP, BSP, the RJD, amongst others.

And who can blame the community for trying its luck elsewhere? It is a cliché that Muslims are remembered by the politicos only at election time. This has been largely true of other voting sections too, but it is getting increasingly difficult as the more aware voting public has started to demand accountability.

Muslims, ghettoized and deliberately frightened against the saffron parties, remain amongst the most neglected, poor and uneducated people in this country.  

However, 12.2% of the Muslims have voted for the BJP in 2019 , up from 9% in 2014. The slight rise means that at least one in ten Muslims have now voted for the BJP.

It is thought this is because of the BJP efforts on the triple talaq bill, appreciated by many Muslim women. And also the reaching of benefits like electricity, cooking gas, direct subsidies paid into newly created bank accounts.  The even-handedness of this welfare work combined with millions of rural toilets, at least 100 days of paid work, internet connectivity, and a rural road development network has  been well received.

Why didn’t the UPA, professedly on the side of the minorities, do anything similar for them? Perhaps it was a failure of the imagination or a lack of energy  in a notoriously corrupt  order.

The BJP/NDA of 2014-2019, by way of contrast, has done many economic and tangible things for the poor of all religions, castes and communities. And the poor have responded with their votes, cutting across traditional fractures and fissures, as the SP, BSP and RJD have learned at their cost.

It is the traditional stance of a victor with a landslide in democratic elections, to be magnanimous in order to heal the wounds of electioneering.

The early pronouncements of Prime Minister Narendra Modi are true to this convention. They strive to establish the right atmospherics for the new government to come.    

Modi 2.0 begins with a near two-thirds majority in the Lok Sabha, not seen since 1971, soon after Prime Minister Indira Gandhi helped in the birthing of Bangladesh. And by 2021, the NDA will have a majority in the Rajya Sabha as well.

The results in the largest state of Uttar Pradesh, which had a major role in taking the individual tally of the BJP to 303, broke through the caste calculations of the Opposition. It granted 62 out of the 82 seats to the BJP state run by Chief Minister Yogi Adityanath.

Speaking to the NDA MPs in the Central Hall of Parliament, Modi framed the coming five year term with reference to the period 1942 to 1947.

It was a time, he said, when everyone in the country, Hindu , Muslim, Christian, Sikh, Jain, did their bit, however minor, to bring about national independence. The atmosphere was super-charged with a sense of patriotism.  

Modi wanted to invoke that same spirit of nation-building and cooperation in the period 2019 to 2024. He used one of his favoured acronyms - NARA- normally meaning Slogan, but in this instance, also National Aspiration cum Regional Aspiration.

The other related thing he said in the Central Hall is that the minorities have been cheated and scare-mongered for too long. This naturally implies that Modi 2.0 is going to set this right.

The social media has been quick to jeer at this, even as the mainstream reported it with a question mark.  But, the BJP, particularly the duo of Modi and Shah are well known for setting themselves lofty and early targets.

People who support the Opposition, too stunned at first to say much, just don’t believe the prime minister. They are joined by quite a few BJP supporters turned sceptics.  

Perhaps Modi is aiming this inclusive intent at foreign observers and potential investors, some of whom are worried about possible communal strife in the not too distant future.

Nevertheless, it afforded the well-spoken two-seater AIMIM head and MP Assauddin Owaisi from Hyderabad, a ready-made opportunity. He got on television immediately to list the many things Modi must do. But perhaps the well-spoken multi term parliamentarian, lawyer and businessman is somewhat behind the curve. Modi 2.0 is difficult to pressure from inside or out. It has the will of the people firmly on its side.

The Hindutva fringe has reacted to the prime minister’s message with a modicum of intolerance. They have roughed up Muslims suspected of illegally slaughtering, transporting and selling beef. In other incidents, they have knocked off skull caps, split lips, and forced some Muslims to recite Jai Shri Ram.

Is the Vishwas call-out going to be derailed by Muslim skepticism or Hindu belligerence?

Very unlikely, because cynicism has little political future. Scaremongering by invoking the excesses of Nazi Germany is also old hat now. The Libleft, wavering between outrage, hysteria, and soft Hindutva itself, will have to think up something new. It has hurt itself badly in electoral terms. It must think on how to undo the damage done by the counter-polarization it has caused by  its  intemperate and  juvenile hatred. As Hillary Clinton found out in the American presidential race with Donald Trump- the “Deplorables” can deliver a mighty electoral kick.

From the point of view of the BJP, now proved to be adept at the social engineering engendered by its Sabka Saath Sabka Vikaas plank, another 10% of the Muslim vote for itself might put paid to the Opposition. Particularly, an Opposition, largely out of power, even in the States.

The Congress held states of Karnataka, Chattisgarh, Rajasthan, Madhya Pradesh are tottering and could fall on their own. In any case, BJP might well wrest them away in short order, along with Delhi from the AAP, and West Bengal from the TMC. Telangana, Orissa, and Andhra Pradesh, are practically outside support allies of the NDA. It doesn’t leave much out of the saffron net. There are just Punjab, Kerala and Tamil Nadu amongst the other notable states that may remain with the Opposition.

In addition, there is a leadership crisis with Rahul Gandhi’s presidency, which sees no easy resolution. The Opposition, largely dependent on caste, community and religious considerations is not holding water. It is also hamstrung by its non-performing family private limited architecture.

The Muslims might  well begin to see their best bet is to ally with the strength of the BJP/NDA, and trust in the prime minister’s professed intentions. The prime minister, on his part, seems to be aware of this. So while the economy, jobs, other long standing promises, foreign affairs, defence, health, education, and a hundred other priorities get the new government’s attention, the Muslims are not going to  be forgotten this time.

(1, 272 words)

For: SIRFNEWS

May 29^th, 2019

Gautam Mukherjee

Number 1084 Revisited: A Bengal Story

No.1084 Revisited: A Bengal Story

Govind Nihalani’s fashionably depressing 1998 film on the Naxalite movement starred Jaya Bachchan as the benighted mother of corpse number 1084.  

It was based on Mahasweta Devi’s Jnanpith Award winning book (1974), released soon after after Congress and Siddhartha Shankar Roy had taken over. But it was in the backdrop of Communist ascendancy from 1967. The Left Front assumed power in West Bengal, in 1977.

Hajar Chaurashir Ma described the murderous class-war, compared to which above-ground Communist rule seemed moderate. Did the Left Front redistribute the agricultural land from the much maligned zamindar to the small farmer?

Yes, but in the interests of labour-intensive farming, it left out the productivity of mechanization and innovative practices. Result: continued poverty with a new set of mai-baaps. And an economy based on rural cadre-based goonda enforcers chanelling state deficit-financed handouts for compliance, and block votes.

However, at the time, playing to the persistent illusions of a Liberal-Left universe, the book and film endorsed the Naxalite message of overthrowing the established order. All for the sake of justice, equality, dignity, in a utopia to come.

And, of course, the self-same Naxalite movement has not died. It has morphed into today’s Maoism, replete with its China supported guerrillas. It has urban cheerleaders in Leftist universities. Writer Arundati Roy described them gushingly as “Gandhians with Guns” in a cover essay in The Outlook.

The Naxalite/Maoists still operate from jungle hideouts, and conduct pitched battles of attrition with the Indian state.

The Naxalite, for all his bloodthirstiness, has to a remarkable extent captured the Bengali imagination. Since the mid-sixties, the intelligent Bengali brain has been fevered, like that of a 19^th century consumptive, with fitful dreams of revolution, behind glittering, bespectacled eyes.

That this revolution has been betrayed continuously, seems of little consequence to him. It has been sold-out, not so much by the hated “bourgeoisie”, though the parlous Indian middle-class, through the decades of socialist India, was hardly fit for the moniker. No, the whole sorry business was betrayed by his own lack of betterment, his pedestrian penury.

Nevertheless, with a stubborn loyalty, generations of Bengalis have allowed themselves to be willingly swallowed up by resounding ideas from Marx and Mao. These were imbibed on doorsteps and parks and the tiny tea shops of their youth. The ideas  echoed in their heads even as nothing changed for the better, and their physical environment decayed around them.

When these impractical, mostly unsuccessful, but otherwise decent folk became old, the arguments wore thin. Now, they sometimes shook their heads in doubt and anger. But it was difficult to denounce a life-long infatuation gone wrong.

It is a grand prejudice after all.  The result: if not outright poverty then something like it. The goal never changed. Yet, like in George Orwell’s Animal Farm, there were those who were evidently more equal than others.

There is something in the Bengali temperament, that, in common with the Punjabis, dreams of justice. Theirs is, of course, the other state scarred by Partition.

Both people are capable, if their blood is aroused, of doing themselves more harm than good. Did it begin with resistance against the Moghuls in undivided Punjab? Did it segue into terror attacks against the British Raj in the 19^th and early 20^th centuries? Certainly after Jalianwala Bagh, something definitely happened.

In undivided Bengal, it was revolutionary bomb-making and pistol work against the Raj too. This, even as a section were accomplished, rich, subtly debauched,  collaborators.  

Then the first partition came in the shape of Curzon’s action of 1905. Next the Capital was moved away to Delhi, in 1911. And then, both Punjab and Bengal got it in the neck in the Partition of 1947, courtesy Mountbatten, Jinnah and Nehru.

The Bengali, given to excitability, grandiloquence and melancholia at the best of times, gradually developed a victimhood psychosis.

This was not helped by the national sidelining of its heroes by Nehru- Netaji Subhash Chandra Bose and Dr. Syama Prasad Mookerjee, amongst them.

Then, with the onslaught of the Naxalites, their brutal suppression that killed off the flower of Calcutta youth, and prolonged Left Rule, its industry fled.

To date, old Calcutta hands from all over the country and some foreigners too, prefer living and thriving in Mamata Didi’s Kolkata. But,  some of them, originally Marwari  trader-industrialist Bengalis, relocated their factories to Gujarat at the first signs of trade union trouble.

Others, grand Raj names like Metalbox, just died. British owned tea majors sold out to the Marwaris.  Only cigarette major ITC stayed on, refusing to shift its HQ, even in 2019.

Its grand white building on Chowringhee, its posh flats, the annual general meetings announcing fat profits, its denizens hobnobbing at Tollygunge Club, still impart a whiff of the old imperial Calcutta.

Just when it seemed nothing could ever change, the Left Front was thrown out of power after 34 years, lock stock and barrel.

Curiously, its replacement, the Trinamool Congress, seemed, if anything, to be a more extreme version, despite professing reasonably vanilla Centre-Left credentials.

It was extreme in all except name, and its preference for the colour blue- in a cerulean shade. It was granted an election symbol of three nursery book flowers, (Jora Ghas Phul). This replaced the Left’s hammer and sickle, often accompanied by Mao’s profile and translations out of his Red Book, on all the wall campaigns in West Bengal.

Almost another decade has gone by since 2011, when Trinamool first came to power. It won 184 seats out of the 294 seat legislature at the head of a 227 seat alliance with others, including Congress.

But, like the BJP is about to now, Trinamool, that originally broke away from Congress, won 19 Lok Sabha seats in 2009 for the first time.

As the political climate changes, what can we expect in future?

It has been a long if unfulfilling partnership with the Communists by any name, lasting nearly half a century. The people were reluctant to dissolve such a long partnership, but when Mamata Banerjee put the rights of the Moharram Processions ahead of the Durga Puja Bisarjan, it was the first of the last straws.

Today, people are remembering, prompted by a Jai Shri Ram shouting and Ram Navavi procession organizing BJP, that it was Bengal that was the original home of the Hindu Mahasabha.

And that Dr. Syama Prasad Mookerjee was its leading light. That Mookerjee went on to establish the Jan Sangh that became today’s BJP, before dying early, at the age of just 53 in Kashmir, gives the forward  march of the BJP in West Bengal a special fervor.

It is likely, after it wins about half of the Lok Sabha seats in 2019, that the BJP will win the next Assembly election too. It has its strategic heart set on not only capturing the state, but securing most of its 42 seats to parliament as well in due course.

For the people, it may well usher in a renaissance the likes of which have not been since the British Raj centred itself in Calcutta with Job Charnock.

West Bengal will receive massive investment under BJP rule as the metropolis and entrepot for the East and North East of India. The net effect is going to be like the lifting of an ancient curse, a Sleeping Beauty come to life,liberty, and prosperity, after a lost fifty years. The BJP will move to never be parted from this hard won, spiritually inspiring, key state again.

The Communist excesses, and dangerously subversive Islamic ways of the past will be checked. Transformations will be wrought just as in Tripura and Assam. The National Register of Citizens will be strictly applied.

West Bengal will become the hub of India’s Act East Strategy, and its linkages with Bangladesh, Myanmar, Thailand and who knows, even China.  

This is a new dawn that promises to lead to a long season of glorious days.

(1,295 words)

For: Sirfnews

May 20^th, 2019

Gautam Mukherjee

Build It And They Will Come

Build It And They Will Come

We are now just days away from the results of the 2019 general elections.  Narendra Modi is widely expected to win a second term. But the Indian economy is slowing down. Even a virtue like low inflation over the last nine months is suggestive, not of health, but recession.

The biggest idea in economics since the days of the city state is that government can enable and stimulate growth via its policies. But increasingly, in a globalised world, external forces, such as the ongoing trade war between the US and China, do have their effect. 

Nevertheless, building the strength of a nation’s economy is of paramount importance, and the time has come to think out of the box.

The world is at a tipping point. Broad-based economic power is slipping away from the West. All of it is experiencing low growth or recession. Save the potential of its over-arching technological leadership, there is little left to leverage. This is because of excess capacity, relatively low population bases, and saturation of demand.

India and China, the most populous nations on earth, are still growing. China, not always on the same page strategically, has recently mooted a cartel with India to negotiate better terms with the oil producing nations.  

India, with its self-image and identity itself in transit, is clearly not doing enough to exploit its opportunities.  Its preference for gradualism may now be counter-productive. It is not paying heed to the possibility of a “middle income trap” even as more and more signs of it are beginning to appear. The trap is tentacular. Once in, it is not easy to get out of, as South Africa and Brazil are finding out.

Present demand for goods and services from a not large enough middle class, is slowing. How then are we going to get to near double-digits for years?

As consumer fatigue sets in, new business entrants are projecting profitability only over the long term, while old players are looking at shrinking sales and margins.

The need to accelerate the rate of capital formation and return on investment,  private money put into a wide swathe of industries and services, and increased domestic consumption, is acute.

This entails policies that bring millions of new people into the educated and relatively affluent middle class from the financially restricted lower middles. It must also lift the remaining population out of extreme poverty.

How can this push towards a developed economy be accomplished? The government must channel massive investment into better nutrition, education and health infrastructure. A small socialist economy that was indifferent to growth, inflation, and large deficit financing, had to change drastically at the point of near bankruptcy in 1991.

The Modi government today knows the pitfalls of being one-sided about expenditure without paying attention to income. In Modi 2.0 it should move urgently to balance growth and the fiscal health with welfarism.

But this must mean more than the somewhat impersonal state funded massive infrastructure building that has propped up the growth rates in Modi 1.0.

The other aspects, from myriad services that account for over 50% of the economy, to manufacturing, agriculture, exports, real estate, the stock markets, the banks, have all done quite badly.

So if we have contained inflation and met fiscal and current account targets, we have done so with a lop-sided economy, which some have unfairly labeled “jobless”.

Emphasizing dynamic growth strategies is doubly difficult in India because the entire “ecosystem” that must implement it has long had a Soviet influenced Marxist bias.

They may typically plump for labour intensive activity, that may have to be replaced instead with multiple clusters of high technology enterprise employing modest numbers of people.  

Do nothing new however and the problems will worsen. Subsidies and doles won’t stave off the crisis to come. Such welfarism is proving impossible to sustain even in the developed but no-growth West, and in once oil rich Arabia. This despite their small to tiny populations.

We must remember the financial inertia that threw the USSR into the vortex of history. The collapse, when it comes, can be sudden.

India, unlike China, has never been export-led. Today China wants to invest in manufacturing in India along with others, who wish to relocate. But we need to stay attractive.

What can we do? Do we need a Ministry For Investment headed by a technocrat as Andy Mukherjee, the Bloomberg Columnist, has suggested?  Mukherjee, also concerned about the economic attrition of late, has not pointed towards a Sovereign Fund. Instead, he advocates free ingress of Japanese and American capital, as in sell-it-instead of-trying-to-save-it. This, in the face of a number of spectacular collapses ranging from Anil Ambani’s Reliance Group to IL&FS and Jet Airways.

Is Rathin Roy, the erudite Prime Minister’s Economic Advisory Council member right, in blowing the war conch on the looming middle income trap? Is the ever widening gap between the few rich and the many poor growing unbridgeable?

Can Niti Aayog identify inclusive high growth areas, if the Finance Ministry is bogged down with concerns on revenue generation and the expenditure it must undertake?

Build it and they will come, is paraphrased from the 1989 Kevin Kostner baseball movie Field of Dreams. But it is perhaps epitomized by massive state-funded infrastructure projects. Infrastructure, often the best suit of right-wing, nationalist governments, can count the BJP amongst its adherents.

From the Vajpayee administration’s Golden Quadrilateral and nuclear weaponisation, to Modi 1.0’s emphasis on the connectivity and empowerment provided by highways, tunnels, bridges, ports, new railway lines, electricity, cooking gas, rural roads, banking and medical insurance for all, Aadhar, direct subsidies; it is a long list.

Unfinished work for Modi 2.0, includes multiple freight corridors, bullet trains, the Sagarmala programme, linking of rivers, mega cleaning the Ganga, more tunnels, all-weather high altitude train lines, redirecting the Indus Treaty waters.

Modi 2.0 intends to spend $1.44 trillion on infrastructure, a fourth of the $4.5 trillion estimated necessary by 2040.

But what else can we do? The rural scenario is certainly a flashpoint of discontent and misery. The FMCG sector in the country must be incentivized with loans and tax holidays to set up dozens of agri-based joint ventures and cooperatives to modernize and value-add to farm produce.

It is unsustainable to support 60% of the population in rural India without sufficient localized activity. Farming, especially as it becomes highly mechanized, does not need more than 10% of the population.

The loss making PSU sector, the bulk of it, must be sold off piece- meal via asset sales. Nobody will want to absorb its losses and much of what it makes is out-of-date.  

Surplus land with the railways, port authorities, defence establishments, and yes PSUs, needs to be, likewise, sold off. “Land use” particulars and permissions must be changed to release its commercial value, often running into the thousands of crores.

The public sector banks, a disgrace of corruption and mismanagement, must be privatized, so that the government can cease bailing them out year after year.

Doesn’t speculation need to make a come-back to release those “animal spirits”? The languishing real-estate sector can well run without cash, but then the capital gains taxation must go.

For transactions in crores, the temptation to dodge at least a proportion of the taxes is just too much. Not to capture all that cash into the official economy is foolish. Modi 2.0 must curb its propensity to use the stick on the relatively small man in the absence of carrots. If it must punish, it would be instructive if it manages to jail some of the corrupt rich and powerful on a priority basis.

Real estate, sadly ignored in Modi 1.0, is a massive employer and user of goods and services. The new “smart cities” in small towns are a low-cost housing work in progress, and do not fit as a substitute.

Similarly, the taxation on equity and debt markets, including short and long term capital gains taxes must be abolished. Limits on overall foreign capital invested in the Debt Market need to go, even as a cap can be retained on individual instruments.

This government has done a great deal to bring indirect taxation into a unified framework via GST. But droves of capable millionaires have quit the country, “ease of doing business” notwithstanding.

The next government must make sure that the tax base grows and flourishes by attending to the carrot.

(1,399 words)

For: The Sunday Guardian

May 15^th, 2019

Gautam Mukherjee

General Elections 2019 At The Crossroads:My Way Or The Highway

General Elections 2019  At The Crossroads: My Way Or The Highway

This is a deeply polarized general election. Democracy, born in a city state, probably never imagined it would, one day, attain such elephantine proportions.

Let us note that the only other country with a comparable population, is run by a dictatorship, ostensibly, of the proletariat, but it has voted President Xi Jinping leader for life.

Which of the two is a better engine of growth and more stable in the long run is something to ponder.

If adherents of the three broad political camps in 2019 had anything in common before April, they will have shed most of it during the bitterness of this campaign. What will remain at the end of May are sets of numbers and the implications of their configuration.

The renewed battle thereafter will be taken into the portals of parliament, into the state assemblies around the country, and inevitably, once more on to the streets.

Can we call this change or chaos? Is its working a profligacy of the spirit or a melding together of a national identity - a work in perpetual progress?

Going forward, will it be Modi’s “New India”, or Nehru’s old “Idea of India” that will prevail? These terms have grown to become much more than political slogans. They represent something of an uncompromising binary attended by high emotion.  

This is an election being conducted for 900 million eligible voters. Over two thirds of the electorate have been voting, statistics show, across the length and breadth of the country, in seven phases. The entire exercise is conducted by the expert Election Commission (EC). It is the biggest democratic election on earth.

The admirable continuity of free-and-fair elections at various levels, from the Panchayat to the Municipality, from the State to the Nation, over seven decades, is a hallmark of the Indian experience.

But this general election may well be different. It is as if this country has reached the proverbial Crossroads.

Depending on the path the voters choose now, the future could be very different from the past. Or it could involve a tame U turn into the  earlier values, shaking off the last five years as if it were an aberration. That is provided, of course, that a non NDA government can survive any length of time.

With just two tranches of the polling remaining, the contenders and opponents have taken positions so divergent they could well be from different planets.

There is the ruling NDA, with its ideological similarities and advantage of incumbency, alongside its weaknesses, also coming from the deficits of that same incumbency.

And, in the opposing corner of the ring, there is the loosely- tied  Gatbandhan, mostly made up of regional parties, having to reluctantly throw in their lot with the Congress for the sake of their joint numbers.

It won’t be the first time for such a formation, bristling with internal contradictions, roughly glued together, by a need to seize power.

And then there is the seemingly neutral and equidistant remainder, a would be Federal Front, and those that nod at the idea, but stay on their own side of the picket fence, away from all the rest.

This too is a sizeable chunk, waiting till after the elections, to formalise, if not to see which way to jump after assessing what they can get out of it for themselves, their voters, their states.

The assessments on probabilities of the outcome are also widely divergent.

Those that lean towards Modi, the BJP and the NDA indicate that Modi 2.0 is imminent. Those opposed, in the Congress, and their compatriots in the regional parties, have an entirely different tally.

Some have a belief that neither side will obtain the numbers to a majority of 272 plus out of 543, and that everything will depend on post-poll negotiations.

The Satta Bazaar projections every day, in the absence of Exit Polls, prohibited by the EC till the last round of voting, give the elections and a majority to the NDA.

But the election results will only come on May 23^rd , or later, depending on how much time it takes the EC to tally over 10 million VVPATs .

Should Prime Minister Narendra Modi secure a second term in office it will  probably represent the Gatbandhan’s worst existential fears.

While this may not be entirely justified, that is, to fear extinction, the willingness to effect changes into a more Saffron avatar will become urgent.

It will have to reflect in the Gatbandhan’s future conduct and policies, more so if the NDA victory is decisive. Otherwise, there is the risk of falling to the margins of the political map for years to come.

The NDA will, in a second consecutive term, assert its ideas, and the Opposition would do well not to take too contrary a position. This is because the public mood would have changed too.

Besides, almost all the leaders of the Gatbandhan, as it happens, have various corruption charges against them. These tend to flare up if they make trouble for the government when they themselves are out of power.

However, the NDA on its part will also need to contend with a block of a 100 MPs  that will likely oppose most of its policies.

Even with an NDA majority, it is the other section of a 100 plus MPs that are not allied to the Gatbandhan that could help the government achieve a broader consensus on important issues. This will be important for substantial change, though the NDA will be hoping for cracks and fissures in the Gatbandhan’s unity to exploit.

On the other hand, should the “Congress plus plus”  end up forming the next government, it will certainly roll back the clock on the NDA’s ideas. But this, only to the extent that such a formation survives.

In the past such conglomerate governments have been seen to last months rather than years, with the first Janata Dal administration under Prime Minister Morarji Desai being the only one that managed to hold out for a couple of years.

The public will soon tell us what it wants but in addition to the ideological direction that will be reset either way, there is urgent need to stimulate  jobs, income, and consumption in the economy.

These are flagging with two important areas of speculative interest- the stock and debt markets and the real estate market neglected throughout Modi’s first term.

It may be the government’s position that it wants to curb speculation but that is not how the stock and real estate markets work.

In the former, particularly the debt market, needs to be unshackled so that there is trading, and deepened, with a view to attract more foreign capital. This, while the due diligence process in mutual fund debt instruments management needs to be bolstered. The Indian rating agencies too have fallen down on the job as the number of debacles in highly rated instruments from groups like the Anil Ambani led Reliance, Indiabulls, IL&FS, Yes Bank, and almost all the PSU banks show.

The real estate market has suffered from government neglect even though it has accounted for 12% of GDP in a good year. A law like REGA will certainly help the consumer protect itself from builder excesses, but do little to stimulate growth. Similarly, settling the quantum of GST issues may be good for taxation but what does it do to stimulate the sector?

Some economists are cautioning against policies that are leading India towards a “middle income trap”. This, could, in potential, finish India’s ambitions of sustaining high growth.

We have always relied on the size of our domestic economy and the demand it represents.  But vital slow-downs in consumption, such as much lower car sales, need to be reversed once the new government takes office.

For: Sirfnews

(1,295 words)

May 9^th, 2019

Gautam Mukherjee