For reforms, create a coalition of the willing
Instead of big bang measures announced from Delhi, PM Modi should use his stature to create a coalition of likeminded states to pursue economic reforms
On contentious matters of economic policy, the Narendra Modi government has demonstrated a penchant for pursuing a shock-and-awe approach. In 2015, the government attempted to push through a controversial bill that diluted the most stringent provisions of the previous government’s flagship land acquisition law. In 2016, the prime minister (PM) announced a draconian demonetisation measure, with just a few hours of notice. And more recently, the government has pushed through — with minimal consultation and deference to parliamentary procedure — three bills liberalising agricultural markets.
On each occasion, the planned dhamaka (big bang) has led to an unfortunate tamasha (spectacle). While the government succeeded in winning the Lok Sabha’s assent on the land bill, it failed to muster the requisite numbers in the Rajya Sabha, forcing it to beat a hasty retreat. Demonetisation triggered a massive economic disruption and, though the government stayed the course, it failed to secure its principal objective of rooting out black money. Now, the fierce opposition to the farm bills has caught the ruling alliance on the back foot. The government has offered to stay the bill’s enactment for 18 months, but negotiations with the protesting farmers persist with no resolution in sight.
One common driver of these shock-and-awe policies — and the PM’S governance style more generally — is the increasing concentration of power in the hands of the Prime Minister’s Office. This vertical approach to national policymaking shuts out input not only from the Opposition but also stalwart rank-and-file Bharatiya Janata Party (BJP) officeholders and National Democratic Alliance (NDA) allies. Debate and deliberation are often sacrificed for the sake of speed and scale.
Yet, this strategy often ends up costing the ruling party. In an effort to override the fragmented, every-state-for-itself nature of India’s economic governance, the party high command has failed to pre-emptively defuse— or even anticipate — the kind of backlash that the farm bills provoked. Excess centralisation has too often delivered ineffectual policy.
Fortunately, for contentious economic reform, there is an alternative path. Imagine, for a moment, if PM Modi deployed his considerable stature, charisma, and political savvy to forge a common minimum programme for a coalition of the willing, comprised of Bjp-ruled states (the same idea could extend even further to include NDA allies, of course).
This programme could include commitments to reform outmoded labour laws, ease impediments to land acquisition, revise laws governing Agricultural Produce Market Committees (APMCS), and reform inefficient power sectors. A common minimum programme for BJP states could also spell out changes to ease-of-doing-business regulations and roll back the most intrusive tentacles of the Inspector Raj.
Under such a coordinated approach, Bjpruled states would lead by example and let investors vote with their feet. If reforms kicked off a virtuous cycle in a critical mass of large states stretching from Gujarat to Uttar Pradesh, states that dithered would come under pressure to act.
Forging a common programme for BJP states is not the same as letting allied states tinker with policy. When the Centre gave up on pushing nationwide land reform, it signalled it would use its authority under Article 254(2) of the Constitution to allow states to refashion their own land laws even if they contravened federal ones. This, however, is a halfmeasure — rather than galvanising states to act in unison, it merely permits ad hoc changes.
Conditions are ripe for a more coordinated approach. Since assuming power at the Centre in 2014, the BJP’S fortunes at the state level have improved considerably. Today the party occupies chief ministerial positions in a plurality of states, accounting for 40% of India’s population and 36% of the nation’s Gross Domestic Product (GDP). Of course, there may be pushback from within the BJP’S ranks.
But PM Modi possesses considerable leverage here. In states controlled by the BJP, each and every chief minister owes his position to Modi’s patronage. At the state level, Modi faces no credible alternative power centres within his own party.
This then throws up a question. Why has the government persisted with a highly centralised approach? At least three factors appear to be at work.
First, the BJP 2.0 appears enthralled with the idea of One Nation, One India. The Goods and Services Tax, simultaneous elections, new farm laws — all of these have been defended as necessary steps on the road to One India. This economic thrust aligns well with the government’s political modus operandi. This brand of politics relies on strict uniformity, an erasure of federal differences, Hindu unity, and an all-powerful executive. This helps reinforce what political scientist Neelanjan Sircar refers to as the “politics of vishwas”.
Second, there are also strategic considerations at play. Collaborating with state governments or opening legislation up to parliamentary debate requires more time, effort, and risk of failure than executive decree. After all, there is a reason that issues such as market reforms have long been seen as intractable. The Modi government may simply prefer the speed and certainty of policy by fiat.
Third, there is the issue of credit-claiming.
Much of Modi’s success in projecting an image of delivering for the aam aadmi (common man) has stemmed from sweeping welfare initiatives such as rural electrification, toilet construction, and the distribution of LPG cylinders that can be clearly tied to Brand Modi.
A common minimum programme places the party, instead of the PM, upfront. And if states ruled by non-bjp forces mimic the BJP’S approach, Modi’s rivals could assume credit for the changes he initiated.
But shock-and-awe won’t work forever. Centralisation gives the illusion of control, but usually serves to exacerbate underlying social and political cleavages, and rarely achieves durable change. A common minimum programme for BJP states, in contrast, offers a middle path between One India and patchwork India.
There is an obvious allure to pursuing a big bang approach that can be implemented in a top-down manner. It would seem to place opponents on the defensive, avoid pesky political compromises, and signal audacity to the electorate. Unfortunately, this is a best-case scenario and, as the record reflects, even the best-laid plans can go awry.
Facing no existential threat until 2024, it is not too late for the government to change course. Ultimately, the question is how PM Modi understands his own strategic imperative. If he believes that he can get by on the perception of success — taking the tough, bold calls that might ultimately backfire — then crafting a coalition of like-minded states will be seen as more trouble than it’s worth.
But this approach relies on an illusion that will only grow more difficult to sustain -- the deception that sheer vigour can substitute for progress. The BJP, then, will have to gamble that voters don’t notice that Made-indelhi diktats often don’t survive their first contact with reality.