Mak­ing sense of Modi’s counter-in­tu­itive eco­nomics

Governance Now - - BOOK REVIEW - Ajay Singh

Dhi­raj nay­yar’s book, Modi and Mar­kets: Ar­gu­ments for Trans­for­ma­tion (pub­lished in oc­to­ber by West­land) came a bit too early. The ti­tle would have made for se­duc­tive read­ing had it co­in­cided with rbi deputy gov­er­nor Vi­ral acharya’s rant against the gov­ern­ment in which he cau­tioned, “govern­ments that do not re­spect the cen­tral bank’s in­de­pen­dence will sooner or later in­cur the wrath of fi­nan­cial mar­kets.”

un­for­tu­nately nay­yar, a jour­nal­ist­turned econ­o­mist, could not in­cor­po­rate this theme into his book, which is a col­lec­tion of his ar­ti­cles pub­lished in var­i­ous pub­li­ca­tions. Though nay­yar is a trained econ­o­mist, the book is de­void of aca­demic jar­gon and reads in an easy flow­ing man­ner, com­pre­hen­si­ble to those who are not ini­ti­ated into even el­e­men­tary eco­nomics. But the ac­ces­si­bil­ity of the text has not di­luted the se­ri­ous­ness of the con­tent.

right from the word go, it ap­pears quite clear that nay­yar favours what is called “Modi­nomics” with­out be­ing un­crit­i­cal. He ex­am­ines poli­cies ini­ti­ated by prime min­is­ter naren­dra Modi through his own un­der­stand­ing of eco­nomics and quite crit­i­cally and ex­plains them thread­bare in a lu­cid and in­ter­est­ing man­ner. For in­stance, the sec­ond chap­ter, ‘The real im­por­tance of Modi’s rise: a cm as PM’, elu­ci­dates the ad­van­tages Modi had on ac­count of serv­ing 13 years as the chief min­is­ter of an eco­nom­i­cally pros­per­ous state like gu­jarat. in the next chap­ter, he claims that the par­a­digm of gov­er­nance that Modi pur­sued was rad­i­cally dif­fer­ent from that of pre­vi­ous regimes.

nay­yar’s words need to be taken se­ri­ously as he has also served the nda gov­ern­ment in the ca­pac­ity of head of eco­nomics, fi­nance and com­merce at the niti aayog, the pol­icy plan­ning body which is now en­trusted with the task of en­cour­ag­ing de­vel­op­ment through ‘co­op­er­a­tive fed­er­al­ism’. Ever since the plan­ning com­mis­sion was wound up, the niti aayog has de­vised var­i­ous schemes to ini­ti­ate com­pe­ti­tion among states and even dis­tricts to grow faster. The au­thor is quite up­front about his prognosis when he says, “The Modi model is a de­li­cious prospect for in­dia’s democ­racy, fed­er­al­ism and gov­er­nance. That will re­main Modi’s real legacy.”

nay­yar un­hesi­tat­ingly sees hope for in­dia in the BJP’S pol­i­tics when he ar­gues his case in yet an­other chap­ter, ‘For Moral Cap­i­tal­ism’. His eru­di­tion as an econ­o­mist comes through as he deals with the topic by re­fer­ring to nehru­vian fas­ci­na­tion for Fabian so­cial­ism and the soviet model of com­mand and con­trol econ­omy and the in­abil­ity of PV narasimha rao to do a deng Xiaop­ing in open­ing up in­dia. at the same time, he also con­tex­tu­alises deen­dayal upad­hyaya’s in­te­gral hu­man­ism in the on­go­ing eco­nomic de­bate and says,

Nay­yar points out that over 700 mil­lion In­di­ans could be called “neo-rich”, that is, they are nei­ther rich nor poor. They be­long to a class which is con­stantly as­pir­ing to break the eco­nomic ceil­ing to scale up the lad­der. In Nay­yar’s un­der­stand­ing, any politi­cian who can read the mood of this class would hold the key to power.

“Modi has an in­tel­lec­tual an­chor in his (deen­dayal upad­hayay’s) quest.” This de­scrip­tion of Modi, though it may fall foul of many within the sangh Pari­var, is nev­er­the­less an ac­knowl­edge­ment of his ad­her­ence to an eco­nomic path suited to in­dia and also not di­vorced of the party’s ide­ol­ogy.

un­like his peers in aca­demics and even in fi­nan­cial jour­nal­ism who run down the Modi gov­ern­ment’s de­mon­eti­sa­tion move and gst roll-out, nay­yar sees them as “rad­i­cal re­forms” in­tended to ben­e­fit the econ­omy in the long run. at the same time, he is con­scious of Keynes’ fa­mous say­ing: “in the long run we are all dead.” Pol­i­tics is all about short term while the na­tion-build­ing is a long-term goal. Here he finds an amal­gam of both the traits in the mak­ing of Modi which he sees au­gur­ing well for the na­tion. For in­stance, he refers to Modi’s “un­pop­ulist mea­sures” in his role as the chief min­is­ter but also notes that they were not un­pop­u­lar in po­lit­i­cal terms. in essence, Modi can take un­pop­ulist de­ci­sions and yet score po­lit­i­cal vic­tory.

in yet an­other place in the book, Nay­yar refers to a “third In­dia” – other than Bharat and In­dia – which is of­ten cat­e­gorised as Poor vs rich in po­lit­i­cal con­text. He points out that over 700 mil­lion in­di­ans could be called “neo-rich” who are nei­ther rich nor poor. They be­long to a class which is con­stantly as­pir­ing to break the eco­nomic ceil­ing to scale up the lad­der. in nay­yar’s un­der­stand­ing, any politi­cian who could read the mood of this class would hold the key to power. and Modi is ap­par­ently more qual­i­fied than Rahul Gandhi, Arvind Ke­jri­wal and oth­ers, to un­der­stand the pulse of this class be­cause of his own so­cial and eco­nomic back­ground. com­ing from a back­ground of ab­ject poverty, Modi’s per­sona find much more ac­cep­tance in this class as com­pared to the oth­ers. at the same time, this class which has moved ahead with the time is not fas­ci­nated by worn-out so­cial­ist slo­gans of glo­ri­fy­ing poverty for pol­i­tics’ sake.

The best part of the book is that the ar­ti­cles in it are so lu­cid and read­able that it would not be easy to put it down once you start read­ing it. in a com­plex sub­ject like po­lit­i­cal econ­omy, the book car­ries on in a story-telling man­ner. There is no doubt that some read­ers may draw their own con­clu­sions about the book be­ing an out­right eu­logy on Modi’s poli­cies, but that’s not true as nay­yar is also crit­i­cal of the gov­ern­ment’s pre­var­i­ca­tion on cer­tain eco­nomic re­forms and con­ser­va­tive Hindu po­lit­i­cal agenda.

How­ever, the first read­ing of the book clearly re­veals that the Modi gov­ern­ment’s un­der­stand­ing of the mar­ket is cer­tainly not in­fe­rior to Vi­ral acharya’s whose cau­tion has ac­quired more of an un­der­tone of pol­i­tics than eco­nomics. i wish nay­yar could have in­cluded this as­pect in his book.

Modi and Mar­kets: Ar­gu­ments for Trans­for­ma­tion By Dhi­raj Nay­yar West­land, 232 pages

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.