India is passing through a defining political phase. We present an indepth analysis.
The wheels of history roll on
The past few months have been tumultuous, unpredictable and exciting. Major developments across the world, in South Asia, and within India, point towards a reconfiguration of the world order itself. With Prime Minister Narendra Modi’s BJP making a decisive mark on the political moment of today, we take stock of everything that matters to India, and the World. For the serious learners, at the end of this Bodhi we have provided extensive Bodhi Links for deep reading, viewing and hearing resources on various topics mentioned here.
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| The most towering political figure of the day in India, a nation of 1.35 billion |
At least ten global developments can be pointed out almost instantly, each of them capable of making a huge dent in existing order of things in India. Why? (1) We have the world’s biggest diaspora now, (2) We are integrated into the world economy more than ever, (3) We are passing through a period of definitive political change, and (4) A big part of our reality is defined by these challenges.
State of the World – 2017-18
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- 1. Trump’s arrival on the world scene
- The rise and rise of the so-called ‘non-liberal’ values and politics in the icon of capitalism, liberalism and openness – the USA – marks a decisive shift in the way the world works. If Trump stays, and stays true to his promises despite the pushback from the establishment, liberals, and the media, we can expect a massive change in the Pax Americana that the world had grown accustomed to. Bye bye Davos Man. Welcome the phase post the end of history.
[ Running Updates on Donald Trump related news ] - 2. Britain’s departure from the European Union
- In an unrelated development initially, the British decided (though two constituent units though otherwise) that it is better to be a fully sovereign nation in the world than to be represented by the European Union everywhere in a state of compromised sovereignty. Hence, bye bye Europe. Welcome Brexit. The impact it will have, and has started to have, on the free flow of labour that was a core reason for the large corporations’ love for London, is already beginning to tell.
- 3. India’s internal political resetting
- India is a different nation, unlike any other in the world. Only China can compare in size (1.3 billion humans each, approximately). But India is a brutal democracy, that can overthrow any existing regime in the most unexpected manner, something the Chinese have no clue about due to a monolithic State that neither knows freedom of speech, nor democratic traditions. The assembly election results in 2017 March have shaken up the internal politics of India. Its impact may be felt not just in the 2019 national elections for the central government (federal or quasi-federal, actually), but also beyond that. Indian defence and military approach, and Indian approach to global trade and foreign affairs may get a new thrust now. Time for a reinvigorated Modi Doctrine, perhaps?
- 4. Chinese efforts to dominate south Asia, and Asia
- The Chinese are relentless in their physical expansion through entire south Asia, building right through territory that is Indian, and illegally occupied by the Pakistani state. In pushing their own OBOR assets, they show no respect, no mercy, no accommodation for Indian sensitivities at all. If all the variables, investments, statements, stalemates etc. are taken in one long view, this makes it pretty clear that the stage is set for a grand conflict in the Indian Ocean Region – the IOR. The Chinese will not rest till they occupy it, and the Indians won’t let them. Brace for some real tough times ahead.
- 5. A huge surge in nativism and nationalism worldwide
- The golden years of a world that is borderless, or was trying to be, are finally over. At least the illusion is over. The world never truly became borderless, but at least the institutional mechanism and the Pax Americana told us to believe so. That is well and truly dead. The quintessential Davos Man is gone, evaporated in the thick, black smoke of carbon emissions that have created a perhaps irreversible chain of events in the global warming saga (something Trump thinks is a Chinese conspiracy). The end of history has ended, and a new history is born. Sorry Francis Fukuyama, you were spectacularly wrong. The waves of nativism and sparks produced from it are spreading to unexpected places – the diplomatic conflict between the Dutch and Turkey being an example that should convince people that the old system is truly over now. Immigrants are under a cloud almost everywhere – bad news for India that boasts of the biggest diaspora now!
- 6. Demands for deglobalisation
- An inevitable consequence of all this has been the demand for deglobalisation sweeping across the world now, threatening the very edifice of a unifying World Trade Organisation (WTO) which had promised a world that respects multilateral trade based on fair arbitration of disputes. Strangely, the arrival of the first ever truly global trade agreement – the TFA (Trade Facilitation Agreement) – happens in the middle of all this. We also witness now the amazing spectacle of a non-democratic nation extolling the virtues of free trade and open borders, at the WEF Davos! China wants to lead the world if American steps back. There never was a more horrifying prospect for citizens of the world that believe in free speech, openness and limits to State Power.
- 7. The modern world’s biggest currency experiment
- India demonetized 86% of its currency value in one stroke, on the 08th of November, 2016. The government expected it to lead to a decisive attack on terror-financing, counterfeiting, black money generation (stock, not flow), and corruption. However, as days passed, the narrative changed to creation of a cashless economy, then a less cash economy, and finally a digital economy. Opponents of PM Modi were spellbound, and expected this to destroy the BJP’s political fortunes at least in the largest state going to polls – Uttar Pradesh. The exact reverse happened when results started pouring in. Almost simultaneously, the RBI released its official estimate on the impact of demonetization, and stopped short of just about praising it. All trouble is transient and temporary, and any negative effects will end soon, it said.
- 8. Terrorism across the world and Security situation
- Selective treatment of terror organizations has created enough space for them to negotiate and ensure a continued existence. The Taliban in Afghanistan, bitterly criticized by both Afghans and Indians, talk regularly with the Chinese who want to use them to check the rise of ISIS which threatens their own Xinjiang provice through the East Turkestan Islamic Movement. The Pakistani cross-border terror operations continue, and both Russia and China refuse to accept the Indian proposal in the BRICS (Goa, 2016), to bring a strongly worded condemnation in a resolution. American withdrawal (drawdown) from Afghanistan (actually, the NATO’s ISAF) leads to a peculiar situation, as some others plan to step in to consolidate their presence. Terror attacks continue with alarming frequency in Europe, till recently a heaven for fleeing refugees, leading to a rise of “right-wing” nationalist parties all over.
- 9. The shakeup that the UN needs
- In the middle of all this, the only global political body that can make a difference, the United Nations, remains somnolent and moribund. Its strongest decision making body – the Security Council – remains purely reflective of a world order that no longer exists. Multiple groups of nations are vying for a permanent seat in the UNSC, creating even more rivalries. Serious genocides across the world resulting from conflicts (the Syrian example being a recent one) go unchecked largely due to the tussle between big powers that won’t cede ground.
- 10. Rising inequality and increasing wealth concentration
- With depressing frequency, NGOs like Oxfam inform us how a handful of individuals – truly handful – have cornered most of the wealth generated by mankind in the past 50 years. It does not speak well for the modern global economic system if only 10 or 20 people hold wealth equal to half of humanity (that’s 350,00,00,000 people). It is an indicator of the impossibility of poverty and destitution to ever end, as the fruits of prosperity are ever-more divided unequally. Thomas Piketty paints an even more depressing picture when he analyses how capital will work in the 21st century. The world was narrated a different story all through the past 100 years.
So the world has taken a sharp turn from what it was designed to be in the 20th century, and its impact will be felt by everyone in India. We now focus our attention to the Indian scene, to see in-depth what’s going on.
India – a quick list of major events in the past 25 years
Times of change, times of turbulence, times of stability. We seem to have seen it all!
- The LPG event : After a disastrous period ending in 1990, Prime Minister Narasimha Rao opened up the Indian economy to the world, forced by a depleted foreign exchange reserve position. The liberalization – globalization – privatization waves unleashed (LPG) truly transformed India in the coming years.
- Political continuity in economic policies : Private sector got its due, despite political changes happening across the states and centre, with regularity. The fears that the next government will undo the liberalization regime have regularly proved unfounded.
- A giant in the making : The Indian economy grew regularly in size, from a tiny $ 274 billion (GDP, nominal) in 1991 to a massive $ 2.6 trillion in 2017. It remains the fastest-growing economy in the world. (China's comparative figures are $ 424 billion (1991) and $ 11.3 trillion (2017))
- Democracy is alive : India managed to remain a democracy, despite its burgeoning population and relative chaos. Some institutions have held their ground firmly, most notably the Judiciary and the Election Commission, offering the medicine needed from time to time to ensure India stays its course.
- Politics of doles and redistribution : A ten year continuous period of redistributive politics by the UPA saw a major change in governance approach, with mass welfare programmes launched across the spectrum (Right to Education, Right to Food, etc.).
- I.T. comes of age : Indian industry and services sector expanded magnificently – the industry despite all the handicaps it faced in the form of archaic labour laws, and the Services Sector (mostly I.T.) because it faced no interference at all. Today, that very gem in India's crown faces serious headwinds.
- Diaspora comes of age : Indians spread across the world. The latest UN numbers show that the largest diaspora worldwide is India. Amazing!
- Arrival of Narendra Modi : Then the political direction of India changed dramatically in 2014, with the arrival of a Chief Minister on the central scene. Today’s script belongs to him, and with the recent electoral victories in the backdrop of demonetization, his stamp is set to be indelibly marked on Indian history now.
- Demonetisation : The largest currency experiment of its type was carried out by the NDA government in November 2016. Political opponents of Modi cry hoarse about killing the poor’s livelihoods. The poor, it seems from the election results, secretly enjoyed the disruption in the rich’s wealth.
- Definitive election results 2017 : The one election that could have changed the story for the 2019 Union elections, are over. And gone with it are the short-term hopes of opposition parties (BSP, Congress, SP, JD(U), TMC, AAP etc.) of either forging a creditable front against Modi’s BJP, or of denting Modi’s chances all alone.
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Three major economic and political developments
defining India today, and tomorrow!
Our politics is about how power is shared between groups. Our economy is about our resources and how they are used to generate material prosperity and long term competitive advantages for India. Our political economy is the engine for making this happen. Our social economy deals with distribution of welfare and benefits across social strata in this vast nation. And finally, our electoral politics is the engine that resets the politics and hence the political economy, every 5 years. Let us begin this amazing journey of understanding this vast issue.
We take stock of all 3 - State of Indian Politics, State of Indian Economy, State of Indian foreign policy, defence and military.
1. State of Indian politics – 2017-18
From independence onwards, for several decades, only one Party dominated the national political scene. The party that did so had successfully carried over its colonial era-freedom fighter legacy into a independent nation with a promise of change. The Indian National Congress (founded 1885) ruled most of India uninterruptedly for many years. It has an interesting history – Founded on the 28 December 1885 at the Gokuldas Tejpal Sanskrit College in Bombay, with 72 delegates in attendance, it had the British A.O.Hume as its first General Secretary, and Womesh Chandra Bonnerjee of Calcutta as the elected President. Although the Indian Association founded 1876 was the first political body of its kind, it was the INC that was to ride the wave.
As India grew in size, complexity and regional aspirations, the centralized model of political control from Delhi by one party (and one dynasty – the Gandhis) began creaking at the seams. Until that model was restored by a dynamic BJP leader in 2014, that is! What was considered impossible in the 2000s, is a near certainty now. What was called the inevitability of coalitions and strong regional satraps in a vast and diverse nation, has been turned into a monochromatic grand vision led by ambitious schemes, aggressive election campaigns and an overt nationalistic agenda that draws in citizens by the millions as they see a hostile neighbourhood and apparent insurgencies all across.
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- What Narenda Damodardas Modi has done to Indian politics is stuff of the most horrible nightmares that the competing Parties can ever dream of. In just a few years, he has (a) changed the political narrative totally, (b) created a resurgent Party that was getting ossified, (c) launched ambitious schemes that touch every citizen’s lives (a daring move, due to the potential of misfiring), (d) created a personal brand that is capable of outshadowing every other, or even all combine,
- (e) brought personal energy and charisma to a national polity that was getting used to dreams of puny sizes, and (f) shown administrative acumen that is unparalleled, as is visible from the micro-detailing of various central government schemes, the ubiquitous “dashboards” (an excellent compilation here) being the most prominent symbol! [Remember, we have provided tones of reading / viewing / listening links at the end, in the Bodhi Links section, for serious students willing to dive really deep]
The tectonic shift in national politics started in 2013, when Narendra Modi was elected as the PM candidate for the BJP’s upcoming campaign in 2014. The UPA regime (two successive 5 year terms totaling 10 years) was beset with scams and scandals of gargantuan proportions. There were 6 “National Parties” in the 2014 Lok Sabha elections – (1) Bharatiya Janata Party or BJP - Lotus symbol, (2) Bahujan Samaj Party or BSP – Elephant symbol, (3) Communist Party of India or CPI – Ears of Corn And Sickle symbol, (4) Communist Party of India (Marxist) or CPM – Hammer, Sickle and Star symbol, (5) Indian National Congress or INC – Hand symbol, and (6) Nationalist Congress Party or NCP, Clock symbol. There were 39 State Parties also, including AIADMK (Tamilnadu), AITC (West Bengal), BJD (Orissa), DMK (Tamilnadu), JMM (Jharkhand), RJD (Bihar), RLD (UP), and SP (UP). In an all-India campaign of high decibel value, the BJP swept the polls. Uttar Pradesh, the biggest electoral battleground, single-handedly gave Modi the national command in 2014 (71 out of 80 MPs!). In 2014, out of 13.88 crore voters in UP, 8.05 crore actually voted, and of these, 3.43 crore or 42.6% voted for BJP, giving it 71 seats, taking its Lok Sabha tally to a massive single Party majority of 282 seats. Worthwhile to note that total number of electors (voters) in India was 83.40 crores (834 million), the highest anywhere in the world, ever. Since China plans to remain non-democratic for a long time, India is destined to hold this record forever!
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- The BJP was criticized (unfairly), for being a winner in the “First Past the Post System” and for not winning the hearts of the people! Final situation in Lok Sabha 2014 was : BJP – 282 seats, 17.16 crore votes earned, 31.3% of total; Congress – 44 seats, 10.69 crore votes earned, 19.5% of total; AIADMK – 37 seats, 1.81 crore votes earned, 3.2% of total.
- The reversal of fortunes was not taken kindly by the Congress, which was now reduced to a situation where they could not technically claim the position of "Leader of the Opposition" in the Lok Sabha (10% of total seats being the minimum acceptable traditional criterion). The BJP wasn't gracious enough either. A political scene where no one was willing to cede an inch of political ground was all set.
National situation in 2014 general elections
The National Democratic Alliance's tally in 2014
The United Progressive Alliance's tally in 2014
The journey of Modi government from June 2014 to November 2016 (half way mark of its 5 year reign) was marked by big administrative changes, grand schemes, “appropriation” of national icons that the Congress seemingly claims as its own, and a vision unmatched by any other. The grassroot reality may be different – India is a big nation that takes its own time, but the challenge was visible. However, it was clear that Modi was a man on a mission, and the naming of the schemes was a clear indicator of it.
So when Narendra Modi single-handedly launched – through a personal declaration on national TV – the “demonetization” of high value notes on Nov 08, 2016, it was an economic move at a scale never attempted anywhere in the world. His Party and the RBI staunchly deny the single-handed part, something that is clearly visible if experts are to be trusted. Critics berated Modi and his Finance Minister, and the RBI, for the manner in which it was executed, though the officers and the RBI kept defending their speed of remonetisation. On 10th of March 2017, the RBI came out with its official assessment of the impact of demonetization, and it assured that nothing has gone wrong in a major way at all.
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- ##inr## The story of Modi's demonetization move (DeMo)
- It was also visible how the initial story of demonetization being a tool for tackling terror and enemies of the state morphed into creating a digital India for everyone to benefit. And therein lay the hopes of all opposition parties in India, especially the vitriolic and aggressive TMC of West Bengal and the Congress (I), and also the Aam Aadmi Party, who perhaps genuinely believed it was a mistake. India is a constantly rotating polity – elections can wipe out the biggest of brands. And it was expected that the biggest state of India – Uttar Pradesh – which single-handedly gave Modi the national command in 2014 (71 out of 80 MPs!), will this time, single-handedly destroy the BJP’s chances, and with it, usher in a new reality for 2019 elections. We saw the 2014 story above. It was repeated in UP in 2017 as well, demolishing many assumptions. We have covered DeMo indepth through our ##leaf## Bodhis, our ##leaf## Bodhi Saars, and our ##eye## Bodhi Shiksha videos. The Bodhi Prabodhans (##leaf## in Premium section) are available to our subscribers and students.
The electorate did not think demonetisation was really a bad idea. The 2017 assembly elections results have cleared the fog, with a final tally that looked tilted in the BJP’s favour in a big way.
Couple all this with the success of the PM Jan Dhan Yojana which has enabled several crore unbanked families to enter the mainstream (latest studies show it is actually working), and one can realize the huge footprint that Modi’s image has cast over the length and breadth of the country.
Couple all this with the success of the PM Jan Dhan Yojana which has enabled several crore unbanked families to enter the mainstream (latest studies show it is actually working), and one can realize the huge footprint that Modi’s image has cast over the length and breadth of the country.
Take a look at all the prime ministers of independent India :
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PM Modi’s image transformation
owes as much to Congress as to Modi’s determination!
PM Modi has successfully morphed from an allegedly “Corporate-Sponsored” candidate (the Adani Ambani variety - as sections of mainstream media dubbed it) in 2014, to a perfect messiah of the poor in 2017. It is a remarkable transformation. The Congress can no longer claim Modi runs a suit-boot ki sarkar. In fact, their persistent attacks perhaps emboldened Modi to turn sharply to nurturing a pro-poor image, than anything else. That image has destroyed the Congress in Uttar Pradesh. Look back slightly more, and the “maut ka saudagar” barbs by Sonia Gandhi (referring to Gujarat riots of early 2000s, something the Congress and many Muslim leaders refused to grow out of) steeled Modi to tackle the grand old party head on. The “chaiwala” barbs by Manishankar Aiyyar led to the hugely successfully “Chai pe Charcha” by Modi. In more recent times, the “Gujarat ke gadhe” barb by Samajwadi Party’s Akhilesh Yadav (alluding to Amitabh Bachchan’s advertising for Gujarat’s wild asses) came to haunt him almost immediately as Modi picked up the admirable quality of donkeys, namely hard work and determination, in a huge public rally.
Modi’s opponents should finally learn their lesson – stop insulting him if you want him to lose his determination. Start praising him, perhaps! Ha ha.
Assembly Election Results 2017
After the shock of demonetisation, it was assumed that the Opposition will either be able to force the government to back down, and withdraw its decision, or will force them to make big concessions. True to form, nothing happened. Time passed by. And elections for state assemblies including the most critical - Uttar Pradesh - were declared by the Election Commission. The BJP's significant victory is remarkable because UP alone accounted for 403 of the total 690 seats being contested.
Not only were these five declared, there are more in the offing for 2017, including the home state of the Prime Minister (and his most trusted Party Chief - Amit Shah), and also for the posts of President and Vice-President of India.
Elections were conducted peacefully, as is the norm in India. All credit to the Election Commission's micro planning, and the democratic traditions of India.
Total seats being contested : 690 (of which UP - 403). Here are the results :
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- 1. Punjab
- Elections were held on February 04, 2017 with 78% voter turnout. All the 117 assembly constituencies saw a triangular contest between major parties (INC, AAP, SAD+BJP), and results were declared on 11 March 2017. Final Tally – Total seats : 117, Congress (I) 77, AAP 20, SAD 15, BJP 3.
- 2. Uttar Pradesh
- Elections were held between 11 February to 9 March 2017 in seven phases with 78% voter turnout. The elections were bitterly fought, with colourful vocabulary ruling the roost. Most of the 403 assembly constituencies saw a contest between major parties (BJP, SP + Congress, BSP), and result was declared on 11 March 2017. Final Tally – Total seats : 403, BJP 312, SP + Congress (I) – 47 + 7, BSP – 19, Apna Dal (Sonelal) 9.
- 3. Uttarakhand
- Elections were held on 15 February 2017 with 65% voter turnout. The elections were not too bitterly fought. Most of the 70 assembly constituencies saw a direct contest only between the BJP and the Congress (I), and results were declared on 11 March 2017. Final Tally – Total seats : 70, BJP 57, Congress (I) 11.
- 4. Goa
- Elections were held on 4 March, with 83% voter turnout. The elections were a test of the BJP’s ability to hold the state, after the charismatic leader Manohar Parrikar had shifted as Defence Minister of India, to Delhi. Most of the 40 assembly constituencies saw a contest between the Congress (I) and the BJP, with the Maharashtrawadi Gomantak Party making it difficult, Goa Forward Party and the Aam Aadmi Party making a bold bid for power. The results were declared on 11 March 2017. Final Tally – Total seats : 40, BJP 13, Congress (I) 17, MGP 3, GFP 3, AAP 0. The Governor Mridula Sinha invited the BJP (now led by Manohar Parrikar - who resigned from the Defence Minister's post) and that was instantly objected to by the Congress (I) which filed a petition in the court of Chief Justice of India J.S. Khehar to annul the Governor's "unconstitutional" decision. On 14 March, the Supreme Court refused to stay the swearng-in ceremony of Parrikar as CM, but ordered a floor test in Assembly on 16 March.
- 5. Manipur
- Elections were held on 4 March, and 8 March 2017. 15 February 2017 with 65% voter turnout. The elections were a test of the BJP’s northeast spread policy, and the incumbent Congress’s ability to hold the state. Most of the 60 assembly constituencies saw a contest between the Congress (I) and the BJP, and the Naga People’s Front and National People’s Party added some more colour. The results were declared on 11 March 2017. Final Tally – Total seats : 60, BJP 21, Congress (I) 28, Naga People’s Front 4, National People’s Party 4.
- 6. Gujarat
- Expected to be held in November 2017, the Gujarat Assembly Elections 2017 will be an acid test for Modi and Shah combination, Gujarat being their home state. It is clear they will leave no stone unturned in retaining the state. Both the Congress and AAP will see this as the last big opportunity to upset the apple cart for Modi and Shah, before the general elections 2019.
- 7. Himachal Pradesh
- Expected to be held in December 2017.
- President's and Vice President's Elections
- Two major elections for constitutionally important posts – the President of India and the Vice President – will be held before 25 July 2017, the day when incumbent President Pranab Mukherjee's term and incumbent Vice President Hamid Ansari's term ends. The UP elections will give a tremendous boost to the Rajya Sabha majority in BJP’s favour, thereby ensuring that a Presidential candidate of the BJP’s liking is installed.
State wise performance of Political Parties
Goa
The Goa episode turned ugly, with the Congress (I) raising issues of constitutionality and claiming that the Governor's decision is unconstitutional, as Congress (I) was the biggest party and should have been invited first to form the government, not the BJP (and allies). The matter got listed in the court of the CJI Justice J.S. Khehar despite the Holi vacation of Supreme Court.
Manipur
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Punjab
The resurgence of regional satraps in Congress was visible when Capt. Amrinder Singh (not Rahul Gandhi's first choice initially) won the day for the Party. Cricketer-Politician Navjot Singh Siddhu joined the team ditching the BJP.
Uttarakhand
and the most crucial - Uttar Pradesh!
In a super-charged election campaign, all Parties unleashed barbs at each other. The mettle of Amit Shah was proven again as his unmatched grassroot calculations, political alignments and strategising won the BJP its second humongous victory in the biggest state in less than 3 years. The caste calculations will continue baffling experts and opponents alike for a long time to come.
Impact of 2017 Assembly Election Results
A historical backdrop first : (1) Rajiv Gandhi's Congress (I) won 83 out of 85 seats in 1984 Lok Sabha elections, with a 51% vote share. In the assembly elections, it won 269 out of 425 seats, with a 39.25% vote share. (2) In 1991 Lok Sabha elections, the BJP won 51 seats with 32.8% vote share, in 1996 it again won 52 seats with 33.4% vote share, and in 1998 it won 57 seats with 36.4%. But it was not the leading party in Assembly Elections while being so for Lok Sabha.
Modi's BJP won 312 seats with a vote share of 39.7% in 2017 assembly elections. And it had already won 71 out of 80 seats in 2014 Lok Sabha elections, with a 42.3% vote share!
The direct, immediate impact of the 2017 election results will be
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- 1. A literal carte-blanche to the Union Government’s policy approach
- Since 2014, an uncomfortable opposition, reduced to a minority in the Lok Sabha (lower house of Indian Parliament – the Sansad) had made life tough for the ruling dispensation and PM Modi, by tackling legislations in the Rajya Sabha (upper house) where the BJP is weak. This had not only slowed major reforms (including some controversial ones), but had stymied the pace of actionable policy decisions. The “Achche Din” (good days) promised by PM Modi during the 2014 campaign had practically come unstuck, due to opposition’s recalcitrance on major decisions. To bypass the same, either the route of ordinances was used, or Money Bills were introduced (the Aadhar case) to get things done. The 2017 victories – including the landslide one in UP – have given PM Modi the ultimate boost and free hand now, with all claims to the moral high ground post-demonetisation usurped by the opposition parties now biting dust. The people have spoken, and how!
- 2. Deep economic reforms now a distinct possibility
- Prime Minister Modi is an action man. He is a reformer, and one who gets things done. Unfortunately, some of the deep reforms that the Indian economy needed were never implemented in the first half of his term. The March 2017 boost now opens up the possibility, and in the next few months, the government can take big decisions on long pending issues. India needs to boost jobs creation, and Labour Laws are due for an overhaul. Being sensitive political territory infested with vested interests in the organized sector, Modi and BJP were hesistant. They are not likely to be so now. The Make In India flagship, a brainchild of Mr Modi and the DIPP’s Amitabh Kant – did not fructify as they would have loved to see. More structural and systemic reforms are needed before it truly gets going.
- 3. Banking sector’s nemesis – the NPAs – may get resolved
- The Economic Survey of India is an official policy document prepared by the Chief Economic Advisor to the Government, and carries prescriptions for some of the deep ills of the economy. A sample of courage was visible in the UDAY scheme – Ujjwal Discom Assurance Yojana – a scheme where the nearly bankrupt state electricity distribution companies were reformed, through a bold debt-takeover and bond-issuance programme. That was slippery political territory indeed. Since 2015, the non performing assets (NPAs) of the public sector banks in India (PSBs) had been garnering quite some attention, and the Surveys had indicated the possibility of the creation of a Bad Bank (named PARA – Public Sector Assets Rehabilitation Agency). But this is the most slippery of political territories, as PSBs will have to finally “settle” long outstanding debts which they have gotten into the habit of kicking down the road in the name of Restructured Corporate Debts. Only a massive political mandate can get things done now. Who better than PM Modi, with a squeaky clean personal reputation (the Birla bribery allegations – through some ‘papers’ purportedly caught in an I.T. raid did not cut any ice with the Supreme Court in a PIL hearing) and a huge mandate now. The Bad Bank may happen, and with it the NPAs may be a thing of the past. Or will the government wait for the 2019 elections?
- 4. The Modi Doctrine gets a boost
- Prime Minister Modi launched his personal version of a foreign policy rejuvenation, through intense and hectic schedules across the world’s capitals, building long-frozen or broken bridges with leaders of the world. The result was the framing of the “Modi Doctrine”, a personal rebuilding of the positive image that India now enjoys in the eyes of the world powers. This has resulted, the government and the MEA claim, in positive domestic developments also, as foreign investment flows have been very high after 2014. A tight intermeshing of global and domestic concerns are bearing fruit. The Modi Doctrine will now get a push, and in a world defined by the unpredictability of President Trump, the decisive election mandate has come at the right time. Imagine Modi and BJP losing the UP elections badly – things would have been so difficult for the government.
- 5. A long term vision that spans till 2022, and beyond
- The one attribute we just cannot ignore in the Prime Minister is his penchant for long term ambitious goals. At the BJP headquarters on 12 March to celebrate the victories, he highlighted his personal vision for 2022 – when independent India will be 75 years old! Not only does that hold serious political meaning for all opposition parties (is he taking the 2019 results a given, now?) but it shows that the earlier style of ultra-ambitious action plans like “making India clean by 2019 – Mahatma Gandhi’s 150th birth anniversary” through the Swachch Bharat Abhiyaan will only strengthen in the days to come. Regional leaders are wary of ever major scheme branded with the “PM” tag, and fear it is an intrusion in a federal fabric. It will take all the might of the opposition parties to forge a face that can take on the PM in 2019 election campaigns – the BJP has assiduously started to own (‘appropriated’, if the opposition is to be trusted) many national icons like Dr.B.R.Ambedkar, Mahatma Gandhi and Sardar Patel. Smarly enough, the BJP (NDA) didn’t dump the Aadhar Card scheme of the UIDAI (brainchild of Nandan Nilekani, a Congress candidate in 2014 elections who is a billionaire IT czar as well), something that’s coming in really handy now with the demonetization and digital economy dream taking off.
Here's how PM Modi acknowledged the massive victory.
When we mark 75 years of freedom in 2022, we should have made an India that will make Gandhi Ji, Sardar Patel & Dr. Babasaheb Ambedkar proud— Narendra Modi (@narendramodi) March 12, 2017
A new India is emerging, which is being powered by the strength & skills of 125 crore Indians. This India stands for development.— Narendra Modi (@narendramodi) March 12, 2017
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2. State of the Indian economy – 2017-18
The Union Budget presented each year, and the Economic Surveys that come with it, are brilliantly drafted documents. The Survey points towards the shortcomings of the economy, benchmarked globally, and the Budget in a way offers remedies for the same. These trends are visible in the Indian economy as on date. The Union Government, alongwith the State governments, will need to work together to not only raise the per capita incomes of Indians, but also improve the ease of doing business thereby promoting entrepreneurship.
Remember, we have provided tones of reading / viewing / listening links at the end, in the Bodhi Links section, for serious students willing to dive really deep.
- Trend 1. Fastest growing economy of the world
- Against all odds, and despite demonetization, we have retained the tag. Multiple global analyses and predictions agree on that. Since China is battling its own “readjusting from investment driven to consumption based growth” problem, India seems poised to remain at the top of the table for some time. The RBI report on demonetization confirms this, as do the figures released by the Central Statistics Office (CSO). [Remember, we have provided tones of reading / viewing / listening links at the end, in the Bodhi Links section, for serious students willing to dive really deep]
- Trend 2. Jobless growth hampering creation of formal sector jobs
- The jobs engine of India has sputtered, and is on deathbed as of now. The rate of formal sector, full time, well paid jobs is nearly zero. This is not of the government’s making, but a combination of devastating forces swamping the corporate world – increasing automation leading to redundant workmen, deglobalisation dangers scaring corporates into hording cash than investing into projects, red tapism of the bureaucracy holding up projects (yes, it surely does!), the modest success of large ideas like Make In India, etc. More jobs was a promise that BJP rode on in 2014. That has not started happening yet.
- Trend 3. Demographic dividend not fully realized
- A related, if more intense, problem is the huge mass of young Indians who are not receiving education and training of the scale or the quality needed to make a mark. The large spread of the informal economy in India (with more than 80% of employed engaged in it) indicates that we will take many decades before the per capita incomes truly break through the ceiling of lower-middle levels, and our people begin experiencing true prosperity. What’s worth wondering is why did decades of welfare programmes since the 1950s failed to show their full impact. Why is it that the “poor and the needy” have become such a convenient vote-bank for so many political leaders.
- Trend 4. Exports and Imports engines sputtering
- A combination of complex factors has led to a steady deterioration in the exports volumes of India, as also the imports volumes. While commodities-driven imports is something we would be happy to see plunging (at least in cost terms) due to plunging world commodity prices (like crude oil), but that hides the fact that falling prices reflect poor global demand, which affects our own exports directly. Getting our exports engine ticking big time is a challenge as of now. That is coupled with the Trumpian threats of an insular American, anti-immigrant threats, and visa curbs. That can seriously harm Indian interests. Whether the election mandate proves to be a boon (emboldening the government to take big decisions) or a bane (if results don’t show up really quickly) remains to be seen.
- Trend 5. Financial inclusion seems to be working
- The demonetization process was criticized by almost all experts, except the BJP’s own thinktank. The global experts (IMF, World Bank, The Economist etc.) wondered if they are unable to realize the true intent behind it. But that’s all in the past now. “Remonetisation is complete” was announced by a senior bureaucrat in February 2017 itself. The RBI report on 10-March 2017 put the final lid on the DeMo debate by declaring only transient harm to the economy, but long term gains from digitalization and formalization of the informal sector. If we take both Demonetisation and Jan Dhan Yojana account together, then a clear picture emerges – many more on the financial fringes of India are perhaps now in the mainstream.
Here are some tweets indicating aspects of the government's schemes and legislations.
Passage of the Maternity Benefit Amendment Bill in the Lok Sabha is a landmark moment in our efforts towards women-led development.— Narendra Modi (@narendramodi) March 10, 2017
It is good to see Swachh Bharat Mission receive tremendous momentum & wide scale participation from all sections of society. #MyCleanIndia— Narendra Modi (@narendramodi) March 8, 2017
Take a look at the comparison of Indian and Chinese economies :
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3. State of Indian foreign policy, defence & military
India faces some major challenges on its defence, military and foreign policy fronts, not the least of them being appointment of a full-time permanent Defence Minister!
Here is a quick recap of the Indian approach to these, in the past seven decades.
[ click open to read ]
- [accordion]
- The non aligned route
- In the 1950s, India adopted the non-aligned route to world politics. We decide neither to ally with the West (capitalist), nor with the Communist Soviet bloc. We were part of a global NAM – the Non Aligned Movement. It was also called a South South Cooperation movement, as most members were developing nations.
- Onset of globalisation
- By the 1980s, towards the end of the Cold War (US versus Soviet Union, 1950 to 1991), it became clear that the global economic system was getting redefined. America-led globalization of trade in goods and services was becoming increasingly bigger, and India too became a part of it, by formally dumping the socialist agenda and accepting the LPG wave (liberalization – privatization – globalization) in 1991.
- China’s resurgence
- China had made a sharp turn from being a closed economy till 1979, to declaring its intentions to “get rich and prosperous”. Charismatic leader Deng Xiaoping led China into that difficult phase of reforms, and today, after four decades of transformation, China is challenging the American economic hegemony by willing to lead the world if US decides to step out of the leadership shoes (President Xi Jinping, Davos, WEF meet, 2017).
- India’s resurgence
- India quickly adapted, or tried to adapt, to a rapidly changing world after 1991. Our economy was opened to investments in goods and services, and everyone came rushing in. Though not always successful, global brands and companies gained a foothold in India. Our general prosperity levels started rising.
- India’s neighbourhood tangles
- China’s territorial ambitions expanded as its economy grew more powerful. Its “all-weather friendship” with India’s arch enemy Pakistan has frustrated multiple attempts by Indian leadership to build bridges and calm nerves. A large part of our diplomatic and foreign policy bandwidth is consumed in the unending friction with this neighbour.
- Our I.T. superstars
- The Indian information technology sector grew by leaps and bounds through the 1990s, becoming firmly set on the global firmament by late 2000s. Our IT firms became multinationals, routinely clocking billions of dollars in net profits! And credit to that goes to little or no interference from the governments. With that, grew the Indian diaspora’s size in the world, becoming the largest in the world with more than 2.25 crore people who are either NRIs or PIOs (UN figures, 2015-16). This built a strong soft power base for India.
Despite Indian economy’s size growing rapidly, China kept growing much faster and became 4 to 5 times bigger in nominal terms. Huge export revenues helped the Chinese build a massive foreign exchange reserve (more than $ 3 trillion) which is now being put to use in a pan-Asia network of infrastructural assets under the banner of One Belt, One Road project, that clearly has strong geopolitical ambitions. India objects to many aspects of it regularly.
The problem of terror kept growing through the years, with direct attacks on Indian metros (Mumbai, 2008) and Army camps (in border areas) leading to a steady deterioration in India-Pakistan relations.
Faced with the twin challenge from both China and Pakistan, India has steadily invested in building up a nuclear-missile arsenal and technology backbone, and has recently created indigenous missile defence shield capabilities also. This is all towards building a credible deterrence against the anticipated mischief by neighbours.
Post 2014, the new government initiated an energetic, positive and new approach to foreign affairs, now called the “Modi Doctrine”.
But clearly, there are 7 unmet challenges, and unfulfilled promises, that India is striving to tackle.
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The 7 unmet challenges of India's foreign policy
- India’s permanent membership in the Security Council of the UN – Without this, the gloriously outdated geopolitical structure of the UN will continue to rankle the Indian establishment. India with its massive economy, and 1.35 billion people, deserves the permanent seat more than anyone else.
- Terrorism and the duplicitous stand of world powers – India has been a historical victim of terrorism. We are unfortunately ranked in top 10, in the Global Terrorism Index 2016 listing. Years of active efforts at creating conditions supportive of peace are regularly thwarted by cross-border terror attacks. Due to democratic traditions, India is unable to take a strong stand like the Russians or the Chinese (Xinjiang, 2017).
- Evolving multilateral challenge in the BRICS and SCO – China wants to expand the BRICS to a BRICS Plus. India fears that it will lead to many of China’s sympathizers and friends making it, thereby diluting the impact India has in the grouping as of now. At the same time, the Indian membership of Shanghai Cooperation Organisation can make things better for India in central Asia.
- The fragile fabric of the WTO, and India’s agricultural issues – India has been a positive-minded member of the GATT since its founding, and the WTO since 01-01-1995 (China joined much later). We have also ratified the first ever global TFA – Trade Facilitation Agreement, which was finally implemented in 2017. However, a lot of concerns of India regarding agriculture subsidies and the WTO rules remain unresolved.
- Regional cooperation and evolving situation – The undisputed control over the Indian Ocean Region (IOR) remains Indian strategy’s trump card. There are persistent efforts by others to dilute those, and the next few years will witness a lot of action. India is also trying to create an alternative to the now practically defunct SAARC.
- America, Russia, Japan, China and India – India is happy to maintain relations with both America and Russia, and the new Trump approach to “friendliness of US towards Russia” can benefit India enormously. However, a lot is uncertain as of now. The Modi Doctrine has to evolve in light of these constantly shifting sands. Japan, threatened by an ever-expanding China, is drawing closer to both India and US, making China nervous and aggressive. [ Running Updates on Donald Trump related news ]
- World trade situation – All of these factors ultimately impinge on world trade situation. While the 1950-1990 period had two clear camps competing for influence, the post 1990 phase is neither unipolar nor truly multi-polar. That does not make things easy for anyone. India’s growth needs required an open world, that can offer its goods and manpower opportunities to succeed.
The political message that the Assembly Elections of 2017 have sent should be seen in the context of overall global scenario. India remains a nation full of promise, teeming youth power, and abundant unfulfilled potential. With the right mix of politics and economics, India can be star of the world economy, bringing prosperity to its own 1.35 billion (and growing). Only positive politics can deliver, something that will be built on listening to what an aspirational India (the poor included) really wants.
[##fire## For India, the wheel has come full circle in 25 years. Click to read]
There are multiple allegations constantly levelled against Narendra Modi by his opponents. A partial list:
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Allegations against PM Modi
There are multiple allegations constantly levelled against Narendra Modi by his opponents. A partial list:
- He is a pro-corporate Prime Minister, and runs a suit-boot ki sarkar. (this is a typical Congress punchline)
- He is destroying the federal structure of Indian polity by concentrating more power in the PMO (this is a typical criticism by regional parties like the TMC)
- He is insensitive towards minorities and those who oppose his perspective (allegation leveled by the Azadi brigade of JNU and some other ultra-liberal lobbies)
- He has not ensured a democratic distribution of tickets during elections to members of other religions, as the BJP did not give tickets to any non-Hindu candidate in 2017 UP elections (a fact used during the elections by all opposition parties)
- He is under the influence of the RSS, which has started changing the dynamics of governance of India (an allegation by many education and social sector workers)
- His approach in foreign policy is not consistent, and overtly dependent on only his personal energy, and he has even sidelined the External Affairs Minister (an allegation by almost all opposition parties)
- He takes radical decisions single-handedly without adequate advice from experts (refer the demonetization decision) (an allegation that was repeated continuously after Nov 08, 2016)
- His victories are making him feel he is invincible, but actually he is failing at winning hearts (many of the Twitterati post results declaration)
- He is preaching a lot without practicing. He is just a dream merchant (an assorted mix of critics)
- He (and BJP) wants to grab power at any cost, and the Goa example 2017 is cited as a prime example.
Here are some tweets symbolising the various shades of criticism Modi faces regularly.
नरेंद्र मोदी, सैनिक विरोधी। मोदी जी ख़ुद सैनिकों को ढंग का खाना तक नहीं देते, हम मृत सैनिक के परिवार को कुछ दे रहे हैं तो क्यों रोक रहे हैं? https://t.co/PHHSCBQ6OT— Arvind Kejriwal (@ArvindKejriwal) March 9, 2017
Nothing done to recover lakhs of crores of unpaid loans from defaulting corporates, but now, will extract profits from hardworking Indians. pic.twitter.com/R8juadFZro— Sitaram Yechury (@SitaramYechury) March 9, 2017
Government is over-anxious to control personal data of all Indians. It refuses to comply with the Supreme Court's directives. #NotCompulsory pic.twitter.com/Cf5eDqWykr— Sitaram Yechury (@SitaramYechury) March 6, 2017
We need to 1) ban corporate funding 2) impose ceiling on expenses by parties; not only on candidates. 3) move to proportional representation— Sitaram Yechury (@SitaramYechury) February 27, 2017
Against the tyranny of fear we stand with our students.For every voice raised in anger, intolerance &ignorance there will be a Gurmehar Kaur— Office of RG (@OfficeOfRG) February 27, 2017
Congratulations to winners in different States. Congratulations to the voters for making their choice. To the losers, don't lose heart 1/2— Mamata Banerjee (@MamataOfficial) March 11, 2017
In the name of Aadhaar, privacy is being lost and there is extortion. Why is this Govt so negative? As a nation, we must condemn this 3/3— Mamata Banerjee (@MamataOfficial) March 4, 2017
DeMo-ReMo derailed the nation. Visionless, missionless, directionless. Today three months #DeMonetisation 5/5— Mamata Banerjee (@MamataOfficial) February 8, 2017
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Continued on Page 7
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Various statements by Trump in 2016 on Modi and Hindus
I am a big fan of Hindu. I am a big fan of India.
If I am elected President, the Indian and Hindu community will have a true friend in the White House. That I can guarantee you.
Narendra Modi is a great man. I applaud him. He has energetically reformed India’s bureaucracy.
Generations of Indians and Hindu Americans have enriched our country (America).
You can’t allow policies that allows businesses (from India, Japan, Vietnam, China, Mexico) to rip businesses from American like candy from a baby.
In light of the challenges being faced by Indian I.T. firms and Indian community in the US (racial attacks), it will be PM Modi's acid test to build bridges with the Trump administration and gain concessions for India. Failure to do so will dent his government's prestige as much as love and support from the Indian American community helped build it.
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Deeper Resources for Serious Readers
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Indian Politics and Governance
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Defence, Military, Terrorism
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A vast collection of Hindi editorials
Can Rahul Gandhi beat Narendra Modi?
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