Retrofit: Can we think big?

At a crucial time in the Arun Shourie/Pradip Baijal journey in the disinvestment ministry, confabulations between Osamu Suzuki’s Suzuki Motor Corporation and the Government of India came to an abrupt standstill. The standoff was over control premium for Maruti Suzuki’s Golden Share, which would hand over control of India’s homegrown Maruti to the Japanese auto major as it would become the majority shareholder. It was tense and gruelling, and no headway was made as the government  was clear it would not relinquish control over India’s premier passenger carmaker for less than Rs 1,000 crores. But the Japanese would have none of it, they were hard-boiled negotiators too. So Mr Baijal and Co in the disinvestment ministry realised it was best to back off for the time being. To cool things off, it was decided that the Japanese delegation should be sent to Agra to see the Taj Mahal, and the thread could be picked up later. It worked like clockwork. The Japanese returned from Agra refreshed. The government came back to the table and cracked it wide open. A control premium of Rs 1,000 crores changed hands, and this became an iconic moment in the disinvestment battle.

That was the fierce doggedness that was shown in Atal Behari Vajpayee’s tenure on reforms. Between the strategic sale of sick PSUs, road-building programmes under the Golden Quadrilateral and Pradhan Mantri Gram Sadak Yojana and capital account convertibility reforms, Mr Vajpayee left a lasting legacy.
This is something the present government could learn from. Prime Minister Narendra Modi is keen to mirror standout reforms, but India has wasted two years and a bit to wait for something transformational. Plodding ahead, pursuing incrementalism and gradualism, an irate Mr Modi is obviously concerned with this intellectual bankruptcy. At a Niti Aayog meeting on July 28, a worried PM spoke of how India needed “transformational change”. The slow pace of reforms and the complete paucity of structural changes in the past two years has hurt the PM and the BJP government’s image.

Mr Modi was propelled to power on a platform of growth and development. Logic says that the right wing is good for reform. Of course, there were many other tall promises the government has failed to deliver on. But what hurts India optically is that nothing is really moving except successful administrative reforms. Deeper reforms, unfortunately, remain unpalatable. The Luddites are deeply embedded across India’s political spectrum. Once UPA-2 got 206 Lok Sabha seats in 2009, it decided to rewind to practising welfare economics and veering back to an age of socialist dogmas, by going back to its default settings. The BJP, under Mr Modi, sadly cannot reshape the narrative either. Spitballing won’t help.

The Niti Aayog has finally unveiled this government’s 15-year “Vision Document”, a planning paper that is set to be the bedrock for the future. At the same event, the PM said he had the courage to experiment and wanted the Niti Aayog to think big and pioneer innovative, out-of-the-box ideas. Emphasising the bulwark of cooperative federalism, he was obviously unhappy with the way things are going, as he sought drastic policy overhaul and reform. It is unacceptable that the BJP’s cerebral inputs have fallen way short of expectations. The PM’s running theme has been transformation over incrementalism. Yet the corresponding ideas have failed to emerge. Which makes one wonder at the width and depth of the BJP’s think tanks and allied policy mavens. At a media giant’s economic summit in January, the PM spoke about “Reform to Transform”. In November 2015.

Mr Modi told 80 top secretaries he wanted, “transformational ideas for next year’s Budget and shift the focus from output to outcome.” Now the question is: if the all-powerful PM has a bee in his bonnet about transformative ideas, and rightly so, why is this not forthcoming? Can’t the government and the party come up with killer applications that provide breakthrough benefits? I can’t believe for a moment that the BJP doesn’t have thinking horsepower. Or is someone trying to impede the PM? Niti Aayog vice-chief Arvind Panagariya wants more experts in the government, but that is not the answer to India’s woes. The Niti Aayog itself must be transformative and communicative, as I don’t think it has so far delivered on anything significant.

Time, it is said, stops for no one. In early July, Mr Panagariya said: “On strategic divestment, you will see action in the next six months I would say, meaning that the process is on, but you will see some action happening in the next six months or less.” One sincerely hopes so, for this sounds like typical bureaucratese, the bane of Indian governance. With reformers like Amitabh Kant and Ratan Watal in Niti Aayog, one expects some serious ideation. What about the rest of the government? Are there no ideas of substance which will materially change and transform? Is the well so shallow, the gene pool so restricted?

What is perhaps most galling is the singular lack of big-ticket ideas. The ecosystem is working sub-optimally, private investment lies crippled. While politicians fight for financial and economic inclusion of India’s vast swathes of poor, boosting the capacity of the state and finding new avenues to bridge the infrastructure, energy and capital deficit remains distant. Balancing finances to pump prime social welfare programmes and India’s poor infrastructure is another challenge. Revenue mobilisation remains the primary task to fund all this. Take the Rs 40,000-crore National Investment and Infrastructure Fund, that was conceived in Budget 2015 (February), but got its CEO, Sujay Bose, only on June 27 this year.

Look at the time lag for just about everything — from announcements to outcomes — how will one ever get a swift response? The journey becomes an expedition, that assumes the avatar of a voyage with no closure in sight. This is the real scourge of the Indian economy. Mr Modi was likened to Deng Xiaoping when he came to power in 2014. India awaits transformation as it has had enough of rhetoric.

The writer is a former editor, author and visiting fellow at Observer Research Foundation. He loves the space where politics and economics converge.