June 21, 2013

Because Modi Can Change the Subject

We need to stop talking about corruption and divisive votebank politics. We must start focusing on good governance and growth

I read the article, ‘Modi versus his party’ by Shekhar Gupta (National Interest, IE, June 15) with great interest and consider it necessary to bring out the right perspective on various issues with regard to the BJP, its relation with the RSS and Narendra Modi.

I find it amusing that it has become fashionable to talk about the BJP’s evolution and growth as an unwelcome development. The BJP, while rooted in history for its ideological inspiration, has willingly embraced contemporary ideals on economic issues. We have consistently marched forward and evolved as a modern and mature political party.

Manmohan Singh introduced economic reforms in 1991, but his actions were short-lived. Impactful reforms happened under Atal Bihari Vajpayee’s stewardship, when he smoothly navigated the rough waters of building consensus in a fractious polity. In 1998, he inherited a flailing economy with high fiscal and current account deficits, high inflation and poor investor confidence. It is his sustained policy action that corrected the situation and when he demitted office in 2004, he left behind a robust economy growing at over 8 per cent with low fiscal deficit, three years of consistent current account surplus and euphoric investor sentiment. Arvind Panagariya, professor of economics at Columbia University, described this to me as the “golden period of the Indian economy”.

The UPA thus inherited a fiscally strong economy with rapid expansion in government revenue, the fruit of which they reaped for the first few years. They indulged in massive corruption, yet got some electoral successes on the back of pernicious policies that wrecked the economy in the long run. While they offer lame excuses such as “global factors” and “coalition compulsions” for our current economic woes, it is their policy inaction and philosophy of jobless, consumption-led growth, coupled with a disconnect between the government and its extraneous masters in the National Advisory Council (NAC), which has led us to this state of despair.

Even though the NDA is not in power at the Centre, Vajpayee’s ideals of decisive leadership and good governance were imbibed by our state governments, ably led by Narendra Modi in Gujarat, Shivraj Singh Chouhan in Madhya Pradesh and Raman Singh in Chhattisgarh, to name a few. A young engineer from IIT, Manohar Parrikar in Goa, won with the wholehearted support of minorities and in a short period, has become a role model for development and honesty. Much against popular perception, Modi inherited a state that was only growing at 4 per cent (FY’96-’01) with negative growth in agriculture when he took over. Under his dynamic leadership, the BJP delivered over 10 per cent GDP growth for a decade, trumping the national average both for agriculture and manufacturing. The CAG report in March 2013 recognised Gujarat as the most improved state in reducing malnutrition by a massive 32 per cent, based on their study of the Integrated Child Development Scheme. The real story of Gujarat is best seen, heard and experienced when one visits Gujarat. While we miss the sage advice and leadership of Vajpayee due to his ill-health, we have no dearth of good leaders who model themselves after him.

It is the BJP-led NDA that brought about transformative reforms across sectors such as oil and gas, power, banking, insurance, pensions etc, and connected India through the telecom revolution and a massive infrastructure rollout programme. The BJP is now being unfairly criticised for not supporting the insurance and pensions reform bills. All parties, including the Congress, opposed the insurance FDI increase, since only Rs 5,950.30 crore has come in over 8 years, and insurance penetration has been miserable. Even if we were to support it, our concerns on fixing valuation norms as per international standards and mandating infusion of fresh capital have not been addressed. As far as the pensions bill is concerned, even the regulator has stated that increasing the FDI cap in pensions fund managers is irrelevant.

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