Apart from “Left Liberal, Secular Establishment” that detests Prime Minister Narendra Modi with a ferocity that seems childish, if not disturbing, it is free market fundamentalists who are the most unhappy with him at the moment. The fond hopes they nurtured in 2014 have been crushed beyond repair. Their lament: Modi was supposed to do with economic policy making in India what Margaret Thatcher did in the UK and Ronald Reagan did in the United States. Both had elevated Capitalism to the status of a religion; just as Marxists had done with Communism. Free market fundamentalists had orgasmic visions when Modi kept declaring in campaign speeches in 2014 that he really believed in “Maximum Governance, Minimum Government” and kept insisting that it was not the business of the government to be in business. He often made references to his roots in Gujarat where entrepreneurship is often a way of life.
Two years down the road, it is as clear as a smog free sky at a hill station that Modi is actually more of a manager than an entrepreneur. Bold, sweeping reforms are not his cup of tea, if you will. Ok, he did make an attempt early during his tenure in 2014 to be bold and radical by trying to muscle through a new Land Acquisition Act. So fierce was the opposition and so pathetic the attempts by his majority government and its parliamentarians to sell the idea to the average Indian that Modi had to publicly eat humble crow and backtrack. But if you think that fiasco turned him Way from bold reforms, you are mistaken and you have not studied his tenure as chief minister of Gujarat for 13 years. Frankly, Modi, like most Indians seems to believe more in “jugaad” and the art of tinkering rather than the process and forces of “creative destruction”.
This author had written two years ago about Modi: “But those who have followed the life and times of Modi as a leader and administrator, the fact is that he will never be hostage to any model. In fact, if you stop looking at the now famous Gujarat Model without prejudiced eyes, you will realize that it is neither pro markets, nor pro state. For example, Gujarat has become a magnet for private investors for the rapid and transparent manner in which decisions are taken and for high quality infrastructure largely built with public money.. So you could say that Modi is partial towards the private sector. But then, despite pressure from pro market lobbies, Modi has refused to privatize any state owned companies in Gujarat. The bigger surprise, all the state owned companies that were once lost cases like PSUs in most other states are now profitable and vibrant.
Modi has repeated that as Prime Minister. Look at his best performing ministers: Suresh Prabhu, Piyush Goyal and Nitin Gadkari. All handle infrastructure and all ensure that the state has a role to play even as they encourage and welcome private sector investments. Look at how good a manager Modi is. In 2014, public sector Coal India was facing an existential crisis and India was mocked at around the world for importing 250 million tons of coal a year despite having massive reserves (The coal scam did play a role in this). Coal India has been turned around with a big jump in domestic output and imports have fallen. Similarly, it looks like Perennially bleeding public sector behemoths like BSNL and Air India have been turned around. Thatcher and Reagan would have privatized all of them. Not Modi. The only problem with this managerial approach is that if an incompetent manager replaces Modi, things would be back to square one in a hurry.
Many Modi fans swoon over his signature schemes like Make in India, Digital India, Skill India, Smart Cities, Start Up India, Swachh Bharat, Pahal, Jan Dhan Yojana and Mudra Bank, to name the more popular ones. But look closer and harder and you will find that the previous UPA regime has been attempting the same things. But since Modi is a manager far superior than his UPA rivals, his efforts are showing results. Look at the cornerstone of his reform edifice: it is a program called Aadhar launched by Nandan Nilekani during the UPA regime. The difference is, Modi is doing a far better job of implementing it as a manager.
This piece is not meant to debate numbers; many other articles in this package on two years of Modi will be doing that. This is more a common sense peep into the economics of Modi.
