The transformation of Narendra Modi
Anilesh S Mahajan December 31, 2015As the sun sets of the last day of 2015, the country is witnessing the transformation of Prime Minister Narendra Modi. He is pushing for more consensus building, talking to opposition leaders at tea, offering water to protesting leaders, attending their birthday parties, and obviously he is moving away from the reputation of being an adamant politician. Between these images lies the fortune of India, when very critical reforms agendas require better floor management techniques of PM Modi.
The year started with the PM's image of a ruthless leader, who loaded eight ordinances, including one related to the controversial land acquisition, and with the opposition accused the NDA government of bypassing the Parliament. The PM and his colleagues reduced their interaction with media, and the in past year he lost two crucial state assembly elections, in Delhi and Bihar, and lost one Lok Sabha by-election. The ruthless PM was backed by a constituency that was keen for reforms to set in, and was fed up with the issue of corruption in erstwhile governments.
The infrastructure sector, including roads, railways and power, is showing some movement. Some of the stuck projects started moving. But most of the capital expenditure was happening from the government's coffers. It could be more spending from railways, or orders coming in from PSUs such as NTPC, Coal India, SAIL and some defence. The private players are still sitting on the fence, looking for some more reforms to set in.
The year also saw PM Modi keeping silent on various issues, including on issues where the country's character of tolerance was questioned. The orchestration of this appeared more political, but Modi should have taken this opportunity to turn the tables on those behind this. More than the PM's words, his actions should speak that he wants to take along minorities. He speaks in a different language to his ministers and party men. The time has come for the PM to use his iron fist on those motor mouths. The rumour mills are abuzz that the PM might remove several of them from his ministry, and send out the message loud and clear before the next round of assembly elections, especially in Assam, UP and Punjab.
His floor management and image building measures might cost the party a chance of spreading wings in Punjab. BJP's alliance partner Akali Dal is facing huge anti-incumbency in the state, which is going for polls in 2017. This means gains for the new AAP and Congress. Most poll pundits believe that if Akalis and BJP break their alliance, BJP could bag the anti-incumbency votes in the state. But the national leadership in Delhi believes that because of a politically disastrous 2015 (in Bihar and Delhi), the break-up appears a distant dream.
Business wise, next year could bring in good news. Most international banks expect the capital expenditure cycle to gain momentum in fiscal 2016/17. But for that the Parliament needs to function. Understanding this, the PM Modi is transforming himself by talking to the opposition leaders, who are taking the confrontation route. In due course, seven out of eight amendments became law, and the Centre had to withdraw the Land Acquisition Bill. The opposition parties turned the game in the Rajya Sabha. Opposition parties (except TMC) were decimated in the general elections, but they still have numbers in upper house.
PM Modi and his colleagues in the NDA used the Parliament to counter attack, and transformed various amendments as money bills. This also came with a famous satire by the finance minister, Arun Jaitley questioned if "in-directly elected" members should block the reforms initiated by the directly elected members of Parliament. In the past one year, the PM would regret that he could not roll out the Goods and Services Tax (GST) because he could not bring on board "obstructionist" and "confronting" Indian National Congress on board. The principal opposition leaders openly said that even if the trinity of Gods - Brahma, Vishnu and Shiva - descend on earth, "GST can't come in near future". This is a constitutional amendment, and is stuck in upper house. This bill will require two-thirds majority to become a law. The lower house has already cleared this bill.
The winter session of the Parliament was wasted in these confrontations, when the Congress leadership of Sonia and Rahul Gandhi were called to the Delhi's district court in a fraud case filed by Subramaniam Swamy. Congress called it political vendetta. However, when in February the house will reassemble, most of us would hope that the critical GST bill would get passed and transform the country's taxation. But if PM Modi has to achieve this, he will have to be more flexible and accommodating.