BackOpinion | Modi 2.0 scores impressively on politics if not on economics
Decisions taken in the first 100 days show that the PM prefers to make his political points upfront
PremiumIf one goes by the numbers, the performance of Modi 2.0 in its first 100 days is staggering. In presiding over the most productive Parliament session in decades, it saw 38 bills being introduced, 28 of them passed with an overwhelming majority. The Insolvency and Bankruptcy Code was tweaked to shorten the resolution period, the Aadhaar Act was amended to allow private businesses such as banks and mobile services firms to use its biometric authentication, and two Labour Code bills have been introduced to consolidate multiple laws. And yes, its first budget has been passed. On the non-legislative side, 10 public sector banks are to be merged into four to bring in efficiencies of size and scale.
On the political side, Article 370 has been reduced to a cipher and Jammu and Kashmir (J&K) bifurcated into two Union territories, the anti-terror law has been amended to let the state declare individuals as terrorists, the National Investigation Agency has been empowered to probe more kinds of crime like human trafficking, currency fraud and cyber terrorism. If this is not extraordinary for any government in its post-poll honeymoon period, what is?
The problem lies in the dismal statistics being thrown up by the economy. Lost in the din of major political moves on J&K, the real underperformance is in the sphere of economics.
Before we go there, one point needs underlining: this has been the norm with all National Democratic Alliance governments. Both under Atal Bihari Vajpayee and Narendra Modi, the bigger moves in the initial 100 days were political in nature. Vajpayee became Prime Minister in March 1998 (discounting his 13-day stint in 1996 as inconsequential), and in less than two months, we had the Pokhran-II nuclear blasts. In Modi’s first term, the biggest initiative was judicial reform. The National Judicial Appointments Commission was passed by both houses of Parliament and half the states. In his second term, Modi has again opted for the grand political statement as his signature tune, with the decision to junk Article 370 and J&K’s constitution. We now have one nation, one Constitution. Whether the courts will put a spanner in the works is still to be seen.
Clearly, the Modi government prefers to make its political points upfront, while its economic agenda comes later. Under Modi 1.0, the big economy-related legislative changes came in 2015 and 2016. The bills to auction coal and mineral mines to private parties, the bills to increase foreign shareholdings in insurance and pension funds, the bankruptcy code and the Aadhaar subsidy reforms did not come in 2014. The blockbuster change, the goods and services tax, came in 2017, well after the mid-point of Modi’s first term, and demonetization queered the pitch for economic growth.
This time, the very first decision of the Modi government was economic—to extend the PM-Kisan Samman scheme that gives farmers ₹6,000 a year to all land-owners. The earlier scheme was limited to small and marginal farmers. However, this was a mere extension of what was announced in the interim budget of February 2019 and not an agenda-setter for 2019-24.
This is not to discount the budget presented on 5 July by Nirmala Sitharaman, or the one presented by Arun Jaitley in 2014, but neither of them was anything to write home about. In fact, the inaugural budgets in both Modi terms failed to dazzle. One commentator called Jaitley’s first budget a Chidambaram budget with “saffron lipstick"; Sitharaman’s budget was widely panned for lack of anything useful to revive the economy. This was the case with Vajpayee’s budgets, too. They involved a lot of trial and error, with many measures being announced and then withdrawn. Not for nothing was his finance minister nicknamed “Rollback (Yashwant) Sinha". Jaitley and Sitharaman too have had their share of rollbacks. Jaitley had to abandon his move to tax provident fund withdrawals and Sitharaman had to withdraw a lot more after the tax surcharge on foreign portfolio investors and capital gains turned into market depressants. The angel tax is in retreat and the move to penalize shortfalls in corporate social responsibility spends is being reworked to make it a mere civil offence.
While the economic slowdown has pushed the finance minister to announce weekly policy relaxations to boost business sentiment, these can hardly be read as proactive moves. They are reactive. This is the reality of Modi 2.0. He barely gets pass marks on economic priorities, but 9/10 in political messaging.
R. Jagannathan is editorial director, ‘Swarajya’ magazine
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
