Thursday, June 13, 2019

PM Modi Better Placed to Deliver in Second Term


PM Modi Better Placed to Deliver Now

At a time when cynicism is rising over the declining governance capacities of democracies and appalling world-wide crisis of leadership, Prime Minister Narendra Modi made the most statesmanlike statements following his emphatic electoral victory in the just concluded parliamentary elections. Spelling out a vision for stronger, harmonious, cohesive and inclusive India, he was magnanimous towards his political opponents and repeatedly assured minorities of equitable and access to opportunities.

Challenges are huge and so are expectations from PM Modi in his second term. Despite impressive growth over the last few decades, democratic India has been comprehensively outperformed by a politically communist China with capitalist economy on virtually every parameter of governance. Its five times bigger GDP, stronger public infrastructure, bigger share of global markets for its goods, better access to resources and superior technological advancements were considered a proof of governance deficiencies of democracy. Its ambitious Belt and Road Initiative is yet another indicator of its far superior economic and technological prowess. PM Modi with a strong majority in Parliament and most major states is well placed to embark on structural reforms to build a stronger governance capacity to pursue the vision that he has spelled out.

India is one of the most unequal societies in the world. Oxfam rated it at 145 out of a total of 157 in its Global Equality index. History has demonstrated that unmitigated inequality has been the surest route towards disaster and decimation for even the most stable societies. No other economy of India’s size ever had such large number of billionaires – nearly 200 or more. The phenomenon is suspected to be the outcome of not only industry and enterprise but also unrestrained favouritism. There are serious structural imbalances and flaws in market economies in any case. Even the most powerful democracies lack the requisite capacity to regulate markets with their policies often coming under backdoor influence.

Deficient technical capacity of state to regulate markets beyond a certain point has been consistently highlighted over the years by economists varying from George Stigler to Jeffry Sachs in Western economies. These have often been confirmed by reports various Congressional Research Committees of the world’s most powerful democracy. One can only imagine situation in other parts of the world, where governance capacities have far more constraint.

India’s additional share of problems include the worst record of bad corporate debts among the top 10 economies which as per reserve Bank of India’s own admission early this year amounted to US $190 billion. Amnesty for wilful corporate defaulters cannot be justified nor will it discipline the industry. An ambience of fear can certainly deter legitimate corporate risks. There is a need to go beyond routine market reforms and restructure corporate governance norms to encourage leaders in this sector to partner in governance process through creation of jobs and generation of wealth through greater innovation and competitiveness.

Elections 2019 will go down as a trend setter in another aspect. For the first time in electoral history of India, national security emerged the focal point of campaign. The 1971 war or 1999 Kargil conflict may have had an impact on the outcome of polls. However, superior security strategy or war-making capacity of a political establishment never came in contention.
Modi’s bold gambit of air bombing of terror camps deep inside Pakistan emerged a major poll plank. The air strikes will certainly have a deterrent on Pakistan based terror groups but the security threat to India from the hostile neighbour is too complex to be resolved soon. Protracted proxy war in Kashmir has reached a different level with radicalisation of sections of local youth. Restraint and discipline of Indian security forces have kept the situation under control but continuation such turmoil generates its own momentum, alienating local population in the process. War theorists keep coming up with newer nomenclatures like “diffused war”, “irregular War”  or “hybrid war” etc to describe such conflicts. Nevertheless, capacity to address such conflicts efficiently is missing in security establishments of even the most powerful states.

It is well known that a specialised armed containment of insurgency is only a critical component of eventual solution, which is efficient, dynamic and acceptable governance, going well beyond the theatre of conflict. The government shall have to marshal all its capacities to not merely overhaul governance structure to make it more responsive but also use its global influence to push for de-radicalisation of Pakistani state and society. It may appear to be too far-fetched but probably it is essential for an enduring peace in Kashmir in particular and South Asia in general.

Universal access to a dependable healthcare regime is the biggest challenge that India needs to address to pursue its dream of great power status. At present, the country ranks 125 in WHO’s life expectancy index with half of the world’s wasted children being in India. The situation is extremely worrying as it erodes the dividends that one expects from a youthful population.

Ironically, healthcare is still considered an act of charity in the country, whereas it should be an integral component of national security. Universal access to healthcare in late 19th century Europe was pushed by military generals following revelations of dramatic shortcomings in the health status and education of children, adolescent and young male population, which made large sections of them unfit for recruitment to the armed forces. Healthcare and social security were pushed as ‘vehicle for securing defence capability and military strengths.’ With diversification of the concept of national security, to cover industrial, agricultural  and R&D prowess as well as dynamism of governance institutions,  we have to see how much emphasis the new government accords to this sector. 

The biggest constraint for Prime Minister Modi in pursuing his vision shall be an archaic civil service which has often been accused of turning into ‘steel-cage’ from ‘steel-frame’. Most advanced countries have moved to performance oriented, technical and specialised civil service with a tough competition as well as incentives for leadership roles and performance. India continues with a generalist civil service of 19th century vintage with little emphasis on performance and specialisation. Any meaningful change in this direction is not possible without a corresponding reform in political parties and corporate sector. The two remain perennially wary of a professional civil service with high level of integrity. Nevertheless, there cannot be better opportunity to embark on a comprehensive governance reforms in all these sectors in a manner that is least disruptive. A popular mass leader like Modi has the stature and capacity to force a public debate and build a consensus towards such reforms to chart a new direction for destiny of 1.3 billion people of India and beyond in an interdependent world.

 (Originally Published in "Asian Affairs in Focus" Vol 02, Issue 11, with minor editions) 

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