Ten steps to $5 trillion: Lesson from RCEP fiasco is that India must execute bold reforms to become competitive

 The Times of India | December 2019

November 4, 2019 was a sad day. Prime Minister Narendra Modi decided to walk out of the Regional Comprehensive Economic Partnership (RCEP) negotiations at the eleventh-hour, admitting that India couldn’t compete with Asia, especially China. It was a big and painful decision as this is no ordinary trade agreement. Had India joined, RCEP would have become the world’s largest free trade area comprising 16 countries, half the world’s population, 40% of global trade and 35% of world’s wealth in the fastest growing area of the world.

India should have joined RCEP. The deal on offer was a reasonably good one and many of our fears had been allayed. Our farmers had been given protection from imports of agricultural products and milk (say from New Zealand). A quarter of Chinese products had been excluded, and for the rest a long period of tariffs was allowed from 5 to 25 years. The deal offered a unique safeguard from a sudden surge of imports from China to India for 60 of the most sensitive products.

If much smaller countries in Asia – Vietnam, Thailand, the Philippines, Laos, Myanmar – can compete and have joined RCEP, why can’t India? Why does it need tariff protection, normally meant for infant industries? Why are India’s companies still infants after 72 years of Independence? No nation has become prosperous without exports; open economies have consistently outperformed closed ones. The $5 trillion target cannot be achieved without exports. The lesson from this fiasco is that India must act single-mindedly and execute bold reforms to become competitive. We can still join RCEP by March 2020. Consider this period a pause to get our house in order. It’s never too late to do the right thing. Here are ten ways to make the nation competitive.

First, get over an inferiority complex and change our old mindset of export pessimism that has limited our share of world exports to 1.7%. Pessimists fear a growing trade deficit. They forget that low cost, high quality imports are necessary to join global supply chains. Competition from imports is a school in which entrepreneurs learn to hone their skills. Ditch the bad idea of import substitution that has made a recent comeback. ‘Make in India’ should be ‘Make in India for the World’. To the voices moaning about bleak global trade prospects: Vietnam’s exports have grown 300% from 2013 to 2018 while India’s have remained stagnant. India’s share of world trade is so small – growing it will bring acche din.

Second, lower our tariffs, which are amongst the highest in the world, and have worsened in recent years through nine rounds of tariff increases in the past three years. Smart countries have a sunset clause to every tariff. Cheaper inputs from abroad will not only make our entrepreneurs more competitive but will also improve domestic productivity.

Third, national competitiveness requires collaboration across a dozen ministries and the states. It cannot be left to the ill-equipped commerce ministry. It needs a high-powered initiative under a senior Cabinet minister. Like the US trade representative, the minister should be empowered to monitor and implement reforms across ministries to enhance competitiveness. No one listens to the commerce ministry.

Fourth, a key roadblock is red tape. Keep a relentless focus on improving the ease of doing business where the country has been rewarded with significant gains in recent years. Minimise the interface of officials and citizens by transferring all paperwork online. Reduce the time it takes to enforce contracts in particular, where India’s performance is amongst the worst in the world.

Fifth, let the overvalued rupee slide, say to 80 to a dollar, which will mitigate the many cost penalties that our exporters pay. Exchange rate should not be a badge of national honour but reflect sound economic sense and competitiveness. Meanwhile, keep lowering interest rates, bringing them closer to our competitors’ levels.

Sixth, reform our rigid labour laws that protect jobs not workers. Companies have to survive in a downturn. When orders decline, you either cut workers or go bankrupt. Successful nations allow employers to ‘hire and fire’ but protect the laid off with a safety net. India should have a labour welfare fund (with contribution from employers and government) to finance transitory unemployment and re-training. We should not insist on lifetime jobs.

Seventh, acquiring an acre of land for industry is not only lengthy but also expensive. The present law, enacted during UPA-2, requires hundreds of signatures. This bureaucratic nightmare needs to be replaced by a sensible law that was, in fact, introduced during Modi 1.0 but failed to pass the Rajya Sabha. Since Modi 2.0 has better numbers, it needs to be moved urgently.

Eighth, treat farmers as business persons, not peasants. Have a predictable export-import regime for farm products – stop the present ‘switch on, switch off’ policy which harms both farmers and foreign customers. Ninth, Indian entrepreneurs bear a huge penalty versus our competitors in the cost of electricity, freight and logistics. Stop subsidising railway passengers through freight; stop subsidising electricity to farmers through industry; and bring down taxes on aviation fuel that make air cargo rates highest in the world. Tenth, keep reforming our dreadful educational system, focussing on outcomes not inputs to produce employable graduates.

There is nothing new about these ten ways to make India competitive. Fortunately, India is in the midst of an economic crisis. A crisis brings urgency to reform as the government has shown by dramatically lowering corporate tax to competitive levels. Now is the time to act. And always remember that rule-based trade and open markets are the best way to lift India’s living standards and build shared prosperity.

In search of a conservative Indian: We are drowned today by the shrill noises from Hindu nationalists and left secularists

 The Times of India | October 2019

The precipitous decline of Congress worries many Indians who believe that choice and a responsible opposition are important. Democracies elsewhere offer a choice between liberals and conservatives through a two-party system. Liberals prefer modernity while conservatives favour tradition and continuity; liberals want rapid change, conservatives prefer it to be gradual. Conservatives tend to be more nationalistic, religious and market oriented; liberals are more secular and oriented to social welfare. It isn’t easy to transpose these terms to India but it can serve a useful purpose.

In India, a single party has dominated since Independence and the opposition has rarely been constructive or effective. That single party today is BJP, having replaced Congress’s long rule. India’s two national parties reflect partially the dichotomy between liberals and conservatives. More importantly, many Indians feel left out. Some of them are deeply religious who seek continuity with tradition but they do not want a ‘Hindu Rashtra’; they prefer ‘Indian’ nationalism over ‘Hindu’ nationalism. Others are suspicious of utopias like socialism. Can conservatism give them a home?

Soon after Independence, Congress made a radical departure from traditional economic arrangements by adopting a socialist, statist agenda. Opposition to it came from the conservative Swatantra Party, which defended economic freedom against Congress’s Licence Raj. Although in 1991 Congress jettisoned socialism, it has remained a reluctant reformer. Liberals within the Congress have invariably prevailed over conservatives. Even if the dynasty were to abdicate today, it is unlikely that the party would shed its left of centre, pro-poor, liberal, secular credentials. Those who want to transform it into a modern day Swatantra Party are chasing wild dreams.

BJP can lay a stronger claim to conservatism based on its religious nationalism. Republicans in America, Tories in England and Christian Democrats in Germany also provide a home for religious and nationalist conservatives. In 2014, the mesmerising aspirational rhetoric of Narendra Modi persuaded many middle of the road Indians to vote for a reinvigorated BJP. The Chaiwalla’s victory was compared in social terms to the British conservative Disraeli’s Tory democracy. Although the new supporters of Modi were religious, they did not care for Hindutva and hoped his economic agenda would prevail.

One of them was Jaithirth Rao whose forthcoming book, The Indian Conservative, draws inspiration from a long line of conservative Indian thinking from Ram Mohan Roy (and even the Mahabharata) through Bankim Chatterjee, Vivekananda, Lajpat Rai, Rajagopalachari, BR Shenoy, and others. Like a good conservative, Rao values continuity and regards the modern Indian state as successor to the British Raj.

He appreciates the British for unifying India and leaving a legacy of Enlightenment values, enshrined in our Constitution. He offers a provocative counterfactual: what if the governors of Bombay and Madras had been independent and had reported directly to London (as Ceylon’s governor did), independent India might have been a much shrunken nation. Rao believes that the tragic Partition of India might have been avoided if Baldwin had prevailed over Churchill and India given dominion status in the 1930s.

In the 19th century ferment, Ram Mohan Roy wanted Indians to tap into their rich intellectual traditions, modernise and reform them. In response Bankim, the Arya Samaj, and others preferred to revive them instead. This opposition continues today. Ramachandra Guha asked a few years ago, ‘where are India’s conservative intellectuals?’ His premise, like Jaithirth Rao’s, is that conservative intellectuals could help BJP modernise its ideology; shed its divisive, majoritarian mindset; and broaden its appeal to today’s young, aspiring Indians.

Someone like Edmund Burke (father of modern conservatism) might even help bring closure to the wounds of Partition that have been reopened by the change in Kashmir’s status. Liberals, from Nehru onwards, have tried but failed to bring about a non-resentful assimilation of Kashmiris into India. Might a conservative today, someone like Rajagopalachari (the only self-styled Indian conservative) succeed? Burke, after all, did bring closure to the restless English mind over the violent French Revolution that was as startling and tragic as our bloody Partition. His message was a conservative credo: stop chasing utopias and worry about common decencies.

We do not hear voices of moderate Hindus or Muslims in contemporary Indian public life. They are drowned by the shrill sounds of Hindu nationalists and left secularists. Both have failed us. Once upon a time public figures like Gandhi, Maulana Azad, and Vivekananda spoke with credibility to the silent majority of religiously minded Indians. We could do with such persons today who will dare to ask, why do we need Hindu nationalism in a nation where 80% are Hindus?

The problem with left secularists, on the other hand, is that they were once socialists and only see the dark side of religion – intolerance, murderous wars and nationalism; they forget that religion has given meaning to humanity since civilisation’s dawn. Because secularists and Hindu nationalists speak a language alien to the aam admi, they are only able to condemn communal violence but not stop it as Gandhi could in East Bengal in 1947.

We should have no illusions today about the rise of a contemporary, conservative party like the Swatantra. Our best hope is the spread of conservative ideals within the two national parties. It could result in a softer, more inclusive BJP and a more market friendly Congress. A conservative temper would help make Indians more comfortable with the free market and governments would not have to reform by stealth. It would further communal harmony, not by weaning people away from religion but encouraging moderate religious leaders to speak up for a decent, inclusive polity. The conservative ideal of modernising tradition is certainly worth embracing in a deeply traditional society like India.

Is Milton Friedman dead? Not quite. Individual social responsibility, not corporate social responsibility, must be the mantra

 The Times of India | September 2019

Capitalism has been on the defensive ever since the global financial crisis of 2007-08. Young people in the West have been turning away from the market system because of widening inequality, revulsion against high CEO salaries, and deepening distrust of business. By 2016, half of America between 18 and 29 years of age rejected capitalism in a Harvard study (with one-third supporting socialism.) Two years later, a Gallup poll in 2018 confirmed these findings when only 45% in the same age group expressed a positive opinion of capitalism. The election of President Donald Trump and the Brexit vote echoed this trend.

The fear that capitalism might be failing forced 180 CEOs of the largest corporations in America to unveil last month a new statement of purpose. It replaces the present doctrine of profit and shareholder primacy, which was famously articulated by Nobel prize winning economist Milton Friedman in 1970: “There is one and only one social responsibility of business – to use its resources to engage in activities designed to increase its profits so long as it … engages in open and free competition without deception or fraud.” Friedman’s comment was so influential that it was written into law. The new statement of purpose wants a company to balance the interests of shareholders with those of customers, employees, suppliers, communities, the environment and be accountable for its social impact.

Of course, a corporation should promote the interests of all stakeholders, but how do you then make it accountable with so many goals? Every institution in society needs accountability. Democracy, for example, is superior to other systems because rulers are accountable to citizens, who can vote them out periodically. Similarly, profit informs a company if it is healthy and efficiently employing its resources. It is accountable to shareholders for its profits through a board of directors, who can fire the CEO. The problem is how to measure performance with multiple fuzzy goals and then who is it accountable to?

The second problem is that the statement may be hollow. A company’s profits already reflect the interests of all its stakeholders. A company is only successful if it “creates value for its customers”; it would not exist if people did not prefer its products to its competitors. Second, a company’s results depend on its ability to hire and retain the best employees. A young MBA today wants to work for a company that not only pays well and develops her skills, but shares her values, for example, in caring for the environment. Third, a good company knows if it squeezes its supplier too hard on price, it will receive a sub-standard component, which will damage its own product. So, “dealing fairly with suppliers” is also an empty flourish. Finally, in “supporting the community and protecting the environment” a company builds a reputation, which translates into higher sales, motivated employees and improved profits.

Is the statement of purpose then merely a self-serving exercise by CEOs, a publicity stunt as its critics say, or will companies now become proactive on the environment; engage in less tax avoidance; place greater focus on long-term health of society? Will companies stop selling soft drinks and candy that promote obesity, and painkillers that have led to the opoid crisis? Does corporate responsibility mean the lose-lose policy of stopping US companies offshoring jobs to India? Dharma is subtle, says Bhishma in the Mahabharata.

The new goals of the American corporation will have consequences in India. Although two decades have passed since the reforms of 1991, capitalism is still trying to find a comfortable home. Indians still believe that the market mostly helps the rich. They do not distinguish between being pro-market and pro-business. Being pro-market is to believe in competition, which helps keep prices low, raises the quality of products, and serves everyone. Being pro-business is to allow politicians to distort the market through excessive intervention, resulting in ‘crony capitalism’. The result of this confusion is the timidity of reform, excessive number of dysfunctional public sector companies, and a nation that is not performing to potential.

The ambivalence towards profit, i fear, will also make young Indian managers in the private sector not value the work they do. They will forget how their products improve peoples’ lives; how companies create millions of jobs; how taxes on corporate profits allow the government to run schools and hospitals. This may lead to low self-esteem and low motivation at work. A poor investor already feels cheated by the CSR law which ‘steals’ 2% of her profits for non-profit making activity. This is certainly not a formula for creating competitive Indian companies to win in the global economy. It is not how to transform India from a poor into a middle-class country.

It is good to search your soul. All of us want to be noble and do some good in the world. This is why Bill Gates is a hero. Everyone applauded Gates when he declared at Davos in 2008 that capitalism should have a twin mission: “Making profits and improving lives of those who don’t fully benefit from market forces.” But people took the wrong message. Gates expressed two different ideas. He did not mean that Microsoft ought to improve the lives of the poor. He meant that those who receive dividends from Microsoft’s after-tax profits ought to engage in philanthropy and help the poor. In other words, philanthropy is an individual social responsibility (ISR), not corporate social responsibility (CSR). Friedman was also right: a company should focus on profit; while making a profit, it serves the interests of all its stakeholders and does enormous good for society. Philanthropy is a wonderful thing but it is an individual’s responsibility. Hence, ISR not CSR should be our mantra.

Contra Hindutva, Kashmiriyat: How consent works in a world of invented nations and fictional nationalisms

 The Times of India | August 2019

The recent change in the political status of Kashmir has deeply wounded the Kashmiris. There is anger, fear, alienation and loss of self-respect. Many have addressed the hurt to Kashmiriyat from a legal or historical perspective. But what is needed is a deeper appreciation of the fact that national and regional identities are imagined creations. Both Hindutva and Kashmiriyat are invented. The only real ‘consent of the people’ is the desire of a person to live in a country. This means that India must become a desirable place to live, not only for Kashmiris, but for all Indians.

India is a union of many identities and some have asked if the injury to Kashmiri identity is different from the pain, say, of the proud people of Andhra who lost half their state a few years ago? Others have argued that Kashmir is a border state with a history that makes it unique. But there are other border provinces, such as Punjab, where people lost their homes and lives during Partition. Their pain was even more poignant and heart-breaking. Later, Punjab was further divided into Haryana and Himachal. Were the people of Punjab or Andhra asked about these changes?

Some liberals believe that a plebiscite is the only real form of consent and Kashmiris should be given a choice to secede on the principle of self-determination. If this is true, are we not morally bound to have a referendum in Andhra Pradesh? Thinking back to 1947, should we not have applied this principle to the citizens of 565 princely states who occupied 40% of India’s territory when the British left? Kashmir was only one of these. BR Ambedkar felt that India was a nation of 3,000 jatis. Should there have been 3,000 referendums? Moreover, shouldn’t Indians under the Raj have also been given a choice – to be ruled by the British or by Indians? If enough Indians had wanted the British to stay on, there might never have been a free India. A referendum can become a path to befuddlement as Britain has discovered after Brexit.

The idea of a nation-state based on common descent, language, and shared culture is a recent invention. Although born in the Treaty of Westphalia (1648), the idea did not spread until the 19th century. At the fall of Napoleon in 1815, Europe still consisted mostly of empires and kingdoms. After that, Europeans deliberately went about crafting nation-states. Since natural unity was usually absent, their leaders ‘manufactured’ it and sold it to the people through mythologised versions of history in school textbooks. Hindu nationalists are trying to do the same today.

Repelled by the horror of World War I caused by ugly nationalisms, the world was drawn in the 1920s to the moral idea of national self-determination. Leaders of the freedom movement in India also realised that their claim to self-rule would depend on proving that their country was a nation. It was important because many colonial rulers of the British Raj believed that India was merely a ‘geographic expression’ (in the words of Winston Churchill). Mahatma Gandhi, thus, became our chief mythmaker.

Today, Kashmir’s integration into India invites the same question: What is a nation-state? Inventors of the idea would say, it is a sentiment, a fellow feeling that unites Indians, giving a sense of oneness. The problem is that this positive feeling often turns negative – an antipathy towards those who are different. Kashmiri Muslims might protest they don’t have a fellow feeling for Hindus, and this was the argument for creating Pakistan. The answer is that most nations contain many religions; even Muslims live as a minority in many countries. Religion is thus not a sound basis for nationhood. This logic can also be extended to race and language in a multicultural world.

Another source of fellow feeling might be the possession of common memories of celebrations and sufferings. The problem with historic memories is that they can also divide. Memories of invasions, of temples destroyed are a source of anguish for one person and heroism for another. Mahmud of Ghazni, who sacked Somnath, is a villain in Hindu eyes and hero among Muslims. So, this criterion also fails and forgetting history is often better for nation building.

Since all criteria of identity fail for a nation-state, we must face the inconvenient truth that a nation is an ‘imagined community’ as Benedict Anderson has taught us. Identity has nothing to do with it. All modern states and regional identities are artificial constructs where most citizens are strangers who will never meet. There is no natural glue that unites the people of India or of any nation, or of Kashmir, Bengal or Andhra. Hindu nationalists and Kashmiri separatists need to understand this. Both Hindutva and Kashmiriyat are fictions. India was invented on January 26, 1950, on the premise that everyone who resides in its territory will have maximum equal freedom and there will be no second class citizens.

After the dust settles, the unhappy manner of integrating Kashmir into the Indian Union will matter less. A successful, non-resentful assimilation of Kashmiris will eventually depend on how desirable India is in the eyes of the ordinary Kashmiri. The job of the Indian state is crucial to this end: to create predictability through good governance, ensure everyone is equal before the law, give people choice to change their rulers, provide opportunity for education and health, and craft conditions for prosperity. This is the main reason why anyone will choose to live in India. It is the only real ‘consent’ in a world where nations are invented and nationalism is fictional.

गरीबी हटाओ की नहीं, अमीरी लाओ की जरूरत

दैनिक भास्कर | 25 जुलाई 2019

कुछ दिनों पहले रविवार की रात एक टीवी शो
में एंकर ने प्रधानमंत्री नरेन्द्र मोदी के 5
लाख करोड़ डॉलर के जीडीपी के लक्ष्य का तिरस्कारपूर्व
बार-बार उल्लेख किया। यह शो हमारे शहरों के दयनीय
पर्यावरण पर था और एंकर का आशय आर्थिक प्रगति
को बुरा बताने का नहीं था, लेकिन ऐसा ही सुनाई दे रहा
था। जब इस ओर एंकर का ध्यान आकर्षित किया गया
तो बचाव में उन्होंने कहा कि भारत की आर्थिक वृद्धि तो
होनी चाहिए पर पर्यावरण की जिम्मेदारी के साथ। इससे
कोई असहमत नहीं हो सकता पर दर्शकों में आर्थिक
वृद्धि के फायदों को लेकर अनिश्चतता पैदा हो गई होगी।

कई लोगों ने बजट में पेश नीतियों व आंकड़ों को
देखते हुए इस साहसी लक्ष्य पर संदेह व्यक्त किया है।
मोदी ने अपने आलोचकों को 'पेशेवर निराशावादी'
बताया है। किसी लक्ष्य की आकांक्षा रखने को मैं राष्ट्र
के लिए बहुत ही अच्छी बात मानता हूं। जाहिर है कि
मोदी 2.0 सरकार नई मानसिकता से चल रही है। यह
खैरात बांटने की 'गरीबी हटाओ' मानसिकता से हटकर
खुशनुमा बदलाव है। राहुल गांधी ने जब मोदी 1.0 पर
सूट-बूट की सरकार होने का तंज कसा था तो वह 'गरीबी
हटाओ' से ग्रस्त हो गई थी और इसके कारण हाल के
आम चुनाव में इस मामले में नीचे गिरने की होड़ ही मच
गई थी। इस लक्ष्य ने आर्थिक वृद्धि की मानसिकता को
बहाल किया है, इसीलिए मोदी 2014 में चुने गए थे।
चीन में देंग शियाओ पिंग की मिसाल रखते हुए मैं तो
मोदी 2.0 के लिए 'न सिर्फ गरीबी हटाओ बल्कि अमीरी
लाओ' के नारे का सुझाव दूंगा। 'सूट-बूट' के प्रति
सुधारवादी प्रधानमंत्री का सही उत्तर यह होना चाहिए,
'हां, मैं हर भारतीय से चाहता हूं कि वह मध्यवर्गीय
सूट बूट की जीवनशैली की आकांक्षा रखे'। जीडीपी
का मतलब है ग्रॉस डेवलपमेंट प्रोडक्ट (सकल घरेलू
उत्पाद)। यह मोटेतौर पर किसी अर्थव्यवस्था की कुल
संपदा दर्शाता है। इसे औद्योगिक युग में अर्थशास्त्रियों ने
ईजाद किया था और इसकी अपनी सीमाएं हैं। आज कई
लोग पर्यावरण हानि के लिए आर्थिक वृद्धि को दोष देते
हैं। वे चाहते हैं कि सरकार धन का पीछा छोड़ लोगों
की परवाह करना शुरू करे। लेकिन, यथार्थ तो यही है
कि जीडीपी नीति-निर्माताओं के लिए श्रेष्ठतम गाइड है।
हाल के वर्षों में आर्थिक वृद्धि ने दुनियाभर में एक अरब
से ज्यादा लोगों को घोर गरीबी से उबारा है।

केवल आर्थिक वृद्धि से ही किसी समाज में जॉब
पैदा होते हैं। सरकार को टैक्स मिलता है ताकि वह शिक्षा
(जो अवसर व समानता लाती है) और हेल्थकेयर
(जिससे पोषण सुधरता है, बाल मृत्युदर घटती है और
लोग दीर्घायु होते हैं) पर खर्च कर सके। मसलन, भारत
में आर्थिक वृद्धि ने ग्रामीण घरों में सब्सिडी वाली रसोई
गैस पहुंचाई ताकि वे घर में कंडे व लकड़ी जलाने से
होने वाले प्रदूषण से बच सकें। 1990 में प्रदूषण का
यह भीषण रूप दुनियाभर में 8 फीसदी मौतों के लिए
जिम्मेदार था। वृद्धि और समृद्धि आने से यह आंकड़ा
करीब आधा हो गया है। जब गरीब राष्ट्र विकसित होने
लगते हैं तो बाहर का प्रदूषण तेजी से बढ़ता है पर
समृद्धि आने के साथ प्रदूषण घटने लगता है और उसके
पास इसे काबू में रखने के संसाधन भी होते हैं। अचरज
नहीं कि प्रतिव्यक्ति ऊंची जीडीपी वाले राष्ट्र मानव
विकास व प्रसन्नता के सूचकांकों पर ऊंचाई पर होते हैं।

वित्तमंत्री ने अपने बजट भाषण में आर्थिक वृद्धि को
जॉब से अधिक निकटता से जोड़ने का मौका गंवा दिया।
मसलन, उन्हें एक मोटा अनुमान रखना था कि अगले
पांच वर्षों में बुनियादी ढांचे पर 105 लाख करोड़ रुपए
खर्च करने से कितने जॉब निर्मित होंगे। चूंकि आवास
अर्थव्यवस्था में सबसे अधिक श्रम आधारित है तो उन्हें
बताना चाहिए था कि '2022 तक सबको आवास' के
लक्ष्य के तहत कितने जॉब पैदा होंगे। 5 लाख करोड़
डॉलर का लक्ष्य हासिल करने में सफलता साहसी सुधार
लागू करने के साथ मानसिकता में बदलाव पर निर्भर
होगी। 1950 के दशक से विरासत में मिला निर्यात को
लेकर निराशावाद अब भी मौजूद है और वैश्विक निर्यात
में भारत का हिस्सा मामूली 1.7 फीसदी बना हुआ है।
निर्यात के बिना कोई देश मध्यवर्गीय नहीं बन सकता। हमें
दुर्भाग्यजनक संरक्षणवाद को खत्म करना चाहिए, जिससे
देश 2014 से ग्रसित है। हमें अपना नारा बदलकर 'मेक
इन इंडिया फॉर द वर्ल्ड' कर लेना चाहिए। केवल निर्यात
के माध्यम से ही हमारे महत्वाकांक्षी युवाओं के लिए ऊंची
नौकरियां व अच्छेदिन आएंगे। दूसरी बात, वृद्धि और
जॉब निजी निवेश के जरिये ही आएंगे। बड़े निवेशकों को
भारत का माहौल प्रतिकूल लगता है। बजट ने इसे और
बढ़ाया है और शेयर बाजार के धराशायी होने का एक
कारण यह भी हो सकता है। तीसरी बात, हालांकि भारत
कृषि उपज का प्रमुख निर्यातक बन गया है पर यह अब भी
अपने किसानों से गरीब देहातियों की तरह व्यवहार करता
है। किसानों को वितरण (एपीएमसी, अत्यावश्यक वस्तु
अधिनियम आदि को खत्म करें), उत्पादन (अनुबंध पर
आधारित खेती को प्रोत्साहन दें), कोल्ड चेन्स (मल्टी
ब्रैंड रिटेल को अनुमति दें) की आज़ादी और एक स्थिर
निर्यात नीति चाहिए। सुधार पर अमल ही काफी नहीं है,
मोदी को उन्हें लोगों के गले भी उतारना होगा। शुरुआत
अपनी पार्टी, आरएसएस और संबंधित भगवा संगठनों
से करें और उसके बाद शेष देश। मार्गरेट थैचर का यह
वक्तव्य प्रसिद्ध है कि वे अपना 20 फीसदी वक्त सुधार
लागू करने में लगाती हैं और 80 फीसदी वक्त उन्हें
स्वीकार्य बनाने में लगाती हैं। नरसिंह राव, वाजपेयी और
मनमोहन सिंह जैसे पूर्ववर्ती सुधारक इसमें नाकाम रहें।
जबर्दस्त जनादेश प्राप्त मोदी को अपनी कुछ राजनीतिक
पूंजी इस पर खर्च करनी चाहिए। अब वक्त आ गया है
कि भारत चुपके से सुधार लाना बंद करे। लोकतंत्र में
जीतने वाले का हनीमून आमतौर पर 100 दिन चलता
है। इकोनॉमी के लक्ष्य के आलोचकों को सर्वोत्तम जवाब
यही होगा कि उक्त अवधि में कुछ नतीजे दिखा दिए
जाएं। मसलन, पहले कार्यकाल से भू व श्रम सुधार बिल
बाहर निकाले, उनमें सुधार लाएं और उन्हें इस लक्ष्य से
स्वीकार्य बनाएं कि इस बार वह राज्यसभा से पारित हो
जाएं। वित्तमंत्री को सार्वजनिक उपक्रमों (एयर इंडिया के
अलावा) की बिक्री की समयबद्ध योजना सामने रखकर
अपने साहसी विनिवेश लक्ष्य पर तेजी से अमल करना
चाहिए। इस तरह के कदमों से जीडीपी लक्ष्य के प्रति
लोगों का भरोसा पैदा होगा। हर तिमाही में राष्ट्र के सामने
प्रगति की रिपोर्ट प्रस्तुत करने से मोदी 2.0 के विज़न में
लोगों का भरोसा और मजबूत होगा।

Bold vision of Modi 2.0: Moving from ‘garibi hatao’ to ‘amiri lao’ depends on embedding audacious new mindsets

Times of India | July 16, 2019

On Sunday night the anchor of a TV show sneeringly and repeatedly referred to Prime Minister Narendra Modi's $5 trillion GDP target. The show was on the poor state of our cities and the well-meaning anchor didn't mean to demonise economic growth even though it came out sounding that way. When this was pointed out to her, she replied in her defence that India should grow but with responsibility to the environment. No one could disagree with that but the viewer was left unsure about the virtues of growth.

Ever since the $5 trillion goal was announced last week, it has set off a healthy debate with Modi calling his critics "professional pessimists". It is a good thing for a nation to aspire to a target. It also suggests that Modi 2.0 has a new mindset – a happy change from the "garibi hatao" mindset of giveaways that afflicted Modi 1.0 after Rahul Gandhi's jibe about a "suit-boot sarkar", which led to an unhappy race to the bottom during the recent general election. The ambitious target restores the growth mindset that got Modi elected in the first place in 2014.

The pursuit of higher GDP is easy to malign – it was invented during the industrial age and has its limitations. Many blame growth for harming the environment. They want governments to stop chasing money and start caring about the people. But it is also understandable why GDP remains the best guide for policy makers. In recent years growth has lifted more than a billion people around the world out of crushing poverty.

Only through growth does a society create jobs. Only growth provides taxes to the government to spend on education (that brings opportunity and equity) and healthcare (that improves nutrition, decreases child mortality and allows people to live longer.) In India, growth provided the means to bring subsidised gas to rural households to counter indoor air pollution from burning dung and wood for cooking. In 1990, this insidious form of pollution caused more than 8% of all deaths in the world; with growth and prosperity, this figure is down to nearly half today. Even outdoor pollution rises sharply when a poor nation begins to develop but declines as the nation prospers and has the resources to control it. It's not surprising that nations with high per capita GDP enjoy the highest ranks on the indices of human development and happiness.

It was not appropriate in her Budget speech to extoll the virtues of GDP growth, but the finance minister could have explained how achieving her bold target was crucial to creating jobs for the millions who voted for BJP. I would go further and make a new slogan for Modi 2.0, following Deng's example in China – "Not only garibi hatao, but amiri lao." This would capture the hopes and aspirations of the young. Instead of turning defensive about suit-boot, the right answer from a reformist prime minister should be, "Yes, I want every Indian to aspire to the comforts of a suit-boot lifestyle."

Success in achieving the $5 trillion target depends on implementing bold reforms and a change in other mindsets as well. Export pessimism, inherited from the 1950s, still persists and India's share in global exports remains a measly 1.7%. No country became middle class without exports. We must reverse the unfortunate protectionism that has afflicted the nation since 2014 and change our slogan to "Make in India for the World". Only through exports will come the high productivity jobs and acche din for our aspiring youth.

Second, growth and jobs will only come through private investment. Investor sentiment is weak and the biggest investors find India's environment turning hostile. The Budget has exacerbated this and it may be one reason for the stock market crash. Third, although it has become a major exporter of farm produce, India continues to treat its farmers like poor peasants. Farmers need freedom of distribution (scrap APMCs, Essential Commodities Act, etc), production (encourage contract farming), cold chains (liberalise multi-brand retail), and a stable policy on exports. Bleeding subsidies for fertilisers and PDS must be replaced by direct benefit transfers.

It is not enough to implement reforms, Modi needs to sell them. To begin with, sell them to his party, to RSS and allied saffron units. And then to the rest of the country. Margaret Thatcher used to say famously that she spent 20% of her time doing reforms and 80% selling them. The previous reformers – Narasimha Rao, Vajpayee, and Manmohan Singh – failed in this task. With his overwhelming mandate Modi should expend some of his political capital in this task. It is high time India stopped reforming by stealth.

In democracies the winner's honeymoon usually lasts a hundred days. The best answer to critics who are sceptical about the $5 trillion goal is to show tangible results during this period. For example, pull out the land and labour reform bills from the Modi 1.0 closet; improve them, and begin to "sell" these reforms in anticipation of getting them through the Rajya Sabha this time around. The FM on her part should quickly follow up on her bold disinvestment target by announcing a time bound plan for the strategic sale of other public sector companies (apart from Air India). Actions such as these will gain the peoples' trust in the ambitious $5 trillion number. And follow up with quarterly progress reports to the nation to reinforce confidence in Modi 2.0's bold vision.

हमें चाहिए असरदार राज और ताकतवर समाज

दैनिक भास्कर | जून 14, 2019

नरेन्द्र मोदी के फिर चुने जाने के बाद धीरे-धीरेबढ़ती तानाशाही का भय फिर जताया जारहा है लेकिन, मुझे उलटी ही चिंता है। मुझे शक्तिशालीसे नहीं बल्कि कमजोर व बेअसर राज्य-व्यवस्था(राज) से डर लगता है। कमजोर राज्य-व्यवस्था मेंकमजोर संस्थान होते हैं, खासतौर पर कानून का कमजोरराज होता है, जिसे न्याय देने में दर्जनों साल लग जातेहैं और अदालतों में 3.3 करोड़ प्रकरण निलंबित रहतेहैं। यह कमजोरों को शक्तिशाली के खिलाफ संरक्षणनहीं देती और विधायिका के हर तीन में से एक सदस्यके आपराधिक रिकॉर्ड को बर्दाश्त कर लेती है। कमजोरराज्य-व्यवस्था लोगों के मन में निश्चिंतता के बजायअनिश्चितता पैदा करती है और पुलिसकर्मियों, मंत्रियोंऔर जजों को खरीदे जाने की अनदेखी करती है। यहकार्यपालिका को तेजी से कार्रवाई करने से रोकती है औरसुधारों को घोंघे की रफ्तार से लागू करती है।

मोदी ने पिछले पांच वर्षों में यह सबक लिया होगाकि भारतीय प्रधानमंत्री की शक्ति की सीमा है। उदारवादीलोकतांत्रिक राज्य-व्यवस्था तीन स्तंभों पर आधारित होतीहै-प्रभावी कार्यपालिका, कानून का राज और जवाबदेही।हम तीसरे स्तंभ की बहुत चर्चा करते हैं, जबकि असलीमुद्दा पहले का है। चूंकि देश हमेशा चुनावी मोड में रहताहै तो इसकी समस्या जवाबदेही की नहीं है। समस्या राज्यव्यवस्था के काम करवाने की योग्यता की है। भारतीयप्रधानमंत्री इसलिए भी कमजोर है, क्योंकि असली शक्तितो राज्यों के मुख्यमंत्रियों में निहित है, जो भारत केअसली शासक हैं। विडंबना है कि मुख्यमंत्री के रूप मेंनरेन्द्र मोदी के प्रदर्शन के कारण उन्हें 2014 में चुना गयाथा और हमने मान लिया था कि वे प्रधानमंत्री बनने केबाद वही जादू दिखाएंगे लेकिन, ऐसा हुआ नहीं।

2014 में नरेन्द्र मोदी ने लोगों से कहा कि वे उन्हेंभारत को पूरी तरह बदलने के लिए दस साल दें। यहमौका उन्हें मिल गया है। वह बदलाव आर्थिक सुधारों सेनहीं, बल्कि शासन संबंधी सुधारों से शुरू होना चाहिए।मोदी ब्रिटेन की पूर्व प्रधानमंत्री मार्गरेट थैचर से प्रेरणा लेसकते हैं। उन्होंने शासन संबंधी कठिन सुधारों को दूसरेकार्यकाल के लिए रखा। भारत में राज्य-व्यवस्था कीक्षमता बढ़ाना आसान नहीं है, क्योंकि चीन के विपरीतभारत ऐतिहासिक रूप से एक कमजोर राज्य-व्यवस्थावाला देश रहा है। हमारा इतिहास स्वतंत्र राज्यों का है,जबकि चीन का इतिहास एकल साम्राज्यों का है। भारतके चार साम्राज्य -मौर्य, गुप्त, मुगल और ब्रिटिश- चीनके सबसे कमजोर साम्राज्य से भी कमजोर थे।

हमारी पहली वफादारी समाज के प्रति है- हमारापरिवार, हमारी जाति, हमारा गांव। चाहे राज्य-व्यवस्थाज्यादातर कमजोर रही पर भारत में हमेशा शक्तिशालीसमाज रहा है। इसलिए दमन शासन ने नहीं किया, यहसमाज की ओर से हुआ मसलन जैसा ब्राह्मणों ने कियाऔर हमें दमन से बचाने के लिए बुद्ध जैसे संन्यासी औरसंतों की एक सतत धारा की जरूरत पड़ी। चूंकि सत्ताऐतिहासिक रूप से बिखरी हुई थी तो भारत 70 सालपहले संघीय लोकतंत्र और चीन केवल तानाशाही राष्ट्रही बन सकता था। इतिहास से मिला सबक है कि हमेंमजबूत राज्य-व्यवस्था चाहिए और राज्य-व्यवस्था कोजवाबदेह बनाने के लिए ताकवर समाज चाहिए।

विडंबना है कि आज चीन की सरकार भारत कीसरकार से ज्यादा लोकप्रिय है, क्योंकि इसने असाधारणप्रदर्शन किया है। न सिर्फ इसने गरीबी मिटा दी है, देश कोमध्यवर्गीय बना दिया बल्कि यह लगातार दिन-प्रतिदिनके शासन में सुधार करती जा रही है। कुल-मिलाकरचीन ने आम आदमी को बेहतर शिक्षा व स्वास्थ्य दियाऔर उनका कल्याण किया। तानाशाही व्यवस्था इसकीसफलता का रहस्य नहीं है बल्कि रहस्य यह है कि इसनेराज्य की क्षमता पर फोकस रखा। जहां चुनावों ने भारतीयलोगों को अधिक स्वतंत्रता दी है (और यह बहुत बड़ीउपलब्धि है), चीन की सरकार ने बेहतर शासन के जरियेदिन-प्रतिदिन की निश्चिंत ज़िंदगी दी है। कहने का मतलबयह नहीं कि भारतीयों को अपनी व्यवस्था चीनियों सेबदल लेनी चाहिए (उन्हें भी ऐसा नहीं करना चाहिए)।किंतु यदि आप भारतीय व चीनी आम आदमी की जगहखुद को रखकर देखें तो आपको भारतीय लोकतंत्र द्वाराचुनी गई ज्यादातर सरकारों से हताशा होगी।

चीन ने अपनी नौकरशाही को ज्यादा प्रेरित व प्रभावीबनाकर शासन की क्षमता बढ़ाई। इसका मतलब हैअधिकारियों के प्रदर्शन पर निकट से निगाह रखना औरउन्हें पुरस्कृत करना है। चीनी नौकरशाही में पदोन्नतिवरिष्ठता से नहीं बल्कि नागरिकों को बेहतर सेवाएं देनेके आधार पर होती है। इससे चीनी नौकरशाह, नियमों सेबंधे भारतीय अधिकारियों के विपरीत अधिक व्यावहारिकरवैया अपनाने को प्रेरित होते हैं। भारतीय नौकरशाहीदशकों से पीड़ित रही है, क्योंकि किसी राजनेता में उनअत्यंत जरूरी सुधार लागू करने का कौशल नहीं था,जिस पर पचास साल पहले सहमति बनी थी। कर वसूलीका एक ईमानदार और पारदर्शी तंत्र, अधिक कर वसूलकर सकेगा। यही बात राज्य-व्यवस्था के तीन अंगों –न्यायपालिका, पुलिस व संसद में सुधारों पर लागू होती है।

क्या नरेन्द्र मोदी ऐसे प्रभावी नेता साबित होंगे, जोनिहित स्वार्थी तत्वों का सामना करके राज्य-व्यवस्था कीक्षमता बढ़ाने का साहस दिखाएंगे? उन्हें गुजरात व केंद्रदोनों स्तरों पर काफी अनुभव प्राप्त है। वे निहित स्वार्थीतत्वों से टकराने के जोखिम भी जानते हैं। शुरुआत स्पष्टदिखते आसान सुधारों से हो सकती है। यानी पहले तोमौजूदा कानून लागू करें, फिर नए कानून बनाएं। नीति कारिश्ता 'क्या' से नहीं बल्कि 'कैसे' से होता है। हर कोईजानता है कि 'क्या' किया जाना चाहिए पर सवाल तो यहहै कि इसे 'कैसे' किया जाए। भारत में बहुत सारे 'कानून'हैं पर चीन में 'व्यवस्था' है। आप को दोनों की जरूरतहै- 'कानून और व्यवस्था' (लॉ एंड ऑर्डर)।

हालांकि, केंद्रीयकृत शासन भारत के लिए ठीकनहीं है पर भारत का प्रधानमंत्री इतना मजबूत होताहै कि वह केंद्र व राज्य, दोनों स्तरों पर शासन कीक्षमता बढ़ा सकता है। प्रधानमंत्री मोदी को लोगों काजबर्दस्त समर्थन मिला है, जो शासन में सुधार के लिएसुनहरा मौका है। सरकारी संस्थानों में सुधार, आर्थिकसुधारों से कहीं अधिक कठिन होगा लेकिन, फिर उसकेफायदे भी कहीं ज्यादा होंगे। यदि मोदी सफल होते हैं तोइतिहास में उन्हें न सिर्फ महान नेता के रूप में बल्किइस बात के लिए भी जाना जाएगा कि उन्होंने 'न्यूनतमसरकार,अधिकतम शासन' का अपना वादा पूरा किया।

Strong state, strong society: The reforms India needs Prime Minister Narendra Modi to courageously undertake

The Times of India | May 31, 2019

With the re-election of Prime Minister Narendra Modi, fears are again being expressed of creeping authoritarianism in India. But i worry about the opposite problem. I do not fear a strong state but a weak and ineffective one. A weak state has frail institutions, especially a feeble rule of law that takes a dozen years to give justice and has 3.3 crore cases pending in the courts. A weak state does not protect the weak against the strong. A weak state creates uncertainty rather than predictability in peoples' minds and allows policemen, ministers and judges to be bought. It also prevents quick action by the executive and slows reforms to a snail's pace because of warped incentives within the bureaucracy.

One lesson that Modi should have learnt in the past five years is about the limits of the Indian prime minister's power. A liberal democratic state rests on three pillars: an effective executive, the rule of law and accountability. We obsess over the third pillar when the real issue is the first. With the nation always in election mode, India's problem is not accountability, it is about the ability of the state to get things done.

The Indian prime minister is weak also because real power resides with state chief ministers, who are the real rulers of India. Ironically, it was Modi's performance as chief minister that got him elected in 2014, and we assumed that he would carry that magic when he became prime minister. It didn't happen. Although Indira Gandhi came close to becoming a dictator, she too discovered the limits of her power.

Illustration: Ajit Ninan

In 2014, Modi asked the Indian people to give him 10 years to transform India. Well, here is his chance. That transformation must begin not with economic reform but with reform of governance. Modi can take inspiration from Margaret Thatcher, who saved up the more difficult reforms – the reforms of the state – for her second term. It will not be easy to enhance state capacity because India has historically been a weak state unlike China. Our history is that of independent kingdoms while China's is a history of unitary empires. The four empires of India – Maurya, Gupta, Mughal and British – were weaker than the weakest Chinese empire.

Our first loyalty is to society – our family, our jati, our village. Although the state was mostly weak, India always had a strong society. Hence, oppression did not come from the state but from society – from the Brahmins, for example, and it needed a constant stream of renouncers and saints, like the Buddha, to protect us from oppression. Because power was dispersed historically, India could only have become a federal democracy 70 years ago and China could only have become an authoritarian state. The lesson from history is that we need a strong state to get things done and we need a strong society to make the state accountable.

China's government today is ironically more popular than India's because it has delivered outstanding performance. Not only has it wiped out poverty, making a poor country middle class, but it has relentlessly improved day to day governance. In the end, China has delivered better education, health and welfare to aam admi. The secret of its success is not authoritarianism but the fact that it has focussed on state capacity. While elections have given the Indian people more freedom (and this is a great achievement) the Chinese state has given its people a more predictable day to day life through better governance. This is not to suggest that Indians will exchange their system for the Chinese (nor should they) but if you try and put yourself in the shoes of the Indian and the Chinese aam admi, you must feel disappointed with our democracy.

China has succeeded in enhancing the capacity of its state by making its bureaucracy more motivated and effective. This means closely monitoring and rewarding the performance of officials. Promotions in the Chinese bureaucracy are not based on seniority but upon superior delivery of services to citizens. These incentives in turn motivate Chinese bureaucrats to be more pragmatic – unlike rule bound Indian officials – and they search for and re-apply the best practices that deliver on the ground.

India's bureaucracy has suffered for decades because no political leader has had the guts to implement the crying reforms that everyone has agreed upon for 50 years. An honest and transparent tax collecting machinery will collect more taxes in the end. The same thing applies to reforms in the three other parts of the state – the judiciary, the police and the Parliament – where countless reform commissions have endorsed the same blueprints for change.

Will Modi be the strong leader who has the courage to take on vested interests and enhance the capacity of the Indian state? He certainly has plenty of experience, both in Gujarat and in the Centre, and he also knows the pitfalls in taking on vested interests. The way to begin is to catch low hanging fruit. This means to first implement existing laws; then only create new laws. When it comes to policy, it is not about the 'what' but about the 'how'. Everyone knows what is to be done; the real question is, how to do it. India has plenty of laws but China has order. You need both 'law and order', as the American TV serial says.

Reforming institutions will be much tougher than economic reform but the rewards will also be greater. If he succeeds, Modi will go down in history as the one who fulfilled his promise of 'minimum government, maximum governance'. India has done well when it has bet on its people; it is about time to bet on its government.

The Modi Mirage

Foreign Affairs | April 11, 2019

Why I Fell Out of Love With India's Reformist Prime Minister

India in 2014 was a troubled and discontented nation. Inflation was in the double digits, growth was declining, and corruption was rampant. Sick of the drift and paralysis in the government of Prime Minister Manmohan Singh, many Indians longed for a leader who would get the nation out of the mess. The situation was not unlike Britain's in the late 1970s. Britain found Margaret Thatcher; India found Narendra Modi.

The sudden ascent of the tough and stocky 63-year-old as a serious contender for the nation's highest office caught everyone by surprise. As chief minister of the state of Gujarat, Modi had built a vibrant economy and reduced corruption. His campaign speeches, with their single-minded focus on vikas (development) were fresh and mesmerizing. But people were also wary. Modi was considered dictatorial and anti-Muslim. Above all, he carried the stain of Hindu-Muslim riots in 2002, when his state government looked the other way as nearly a thousand people, most of them Muslims, were killed over several days.

I, too, worried about electing a politician like Modi. Yet I also believed that the Indian government was not doing enough to capitalize on its extremely young population, about half of which is under the age of 25. If those millions of working-age women and men could be lifted from underemployment in the informal sector to well-paying jobs, the gains in overall prosperity would far outweigh the burden of supporting the old and the very young. Economists call this the "demographic dividend," which is known to spur GDP growth in developing countries. If managed well, India's economy had the potential to lift millions from poverty and send the country on a path to middle-income status. But within a dozen years, the window of opportunity would close as India's youth began to age. Among the candidates in the 2014 elections, Modi seemed to be the only one to grasp this, making him the country's best hope for reaping the demographic dividend. The alternative was Rahul Gandhi—a scion of the political dynasty that had governed the country for the better part of six decades—and he did not even come close.

I contemplated a dilemma. Should India risk its precious commitment to secularism and pluralism for the sake of prosperity, jobs, and fighting corruption? I agonized for months and then did something unusual. I decided, for the first time in my life, to vote for the right-wing, Hindu nationalist Bhartiya Janata Party (BJP)—and I did so because Modi was its leader. I was among the first Indian liberals to endorse him publicly, in my Sunday column in the Times of India and in six other Indian papers.

There was no denying that Modi was a sectarian and authoritarian figure. But I knew that India's democratic institutions were strong enough to prevail over those tendencies. Nothing would absolve Modi of his responsibility for the 2002 riots. But neither would anything lessen the moral imperative to fight widespread poverty with sound economic policy. A vote for the BJP was, in my mind, a calculated risk. Millions of Indians agreed, and Modi swept the polls.

To voters used to being treated like victims, Modi's uplifting image and rhetoric were a welcome change. The Indian National Congress of Rahul Gandhi cast its constituents as defenseless casualties of global capitalism; a slate of caste-based parties promised justice for those harmed by India's rigid social hierarchies. But Modi—the son of a chaiwallah, one of India's ubiquitous tea-sellers—embodied the promise of social mobility across the boundaries of caste and class. That his English was labored at best only burnished his credentials as a man of the people. His landslide victory credited the dignity of shopkeepers and invited India's Anglophile elite to re-examine its Brahmanical prejudices.

Modi extended the BJP's appeal to India's rapidly growing middle class, which had enjoyed the fruits of economic liberalization in the 1990s. But in so doing, he created a divided party, with an economically liberal wing and a culturally conservative wing. Many in the former did not subscribe to the BJP's cultural agenda of Hindutva, the belief that India should be a nation of and for the Hindus. Even if these voters had supported Modi's agenda of economic reform, his party's majoritarian politics left a feeling of discomfort that was hard to shake.

TAKING STOCK

Five years on, I am disillusioned. Modi has delivered only partially on his economic promises, and he has unconscionably polarized the country. With a GDP growth rate of roughly seven percent, India's is the fastest-growing major economy, but this growth has not brought the promised jobs. Nor has Modi leveraged his outright majority in the lower house of parliament (rare in Indian politics) to execute the far-reaching reforms that would have made India more competitive. He could, for example, have reformed the distribution of farm commodities and thus helped prevent the recent collapse in food prices, which has destroyed countless farmers' livelihoods. He could have used India's slow-burning banking crisis to privatize the worst-performing public-sector banks, which are going the way of Air India, the state airline that has been mismanaged into near bankruptcy. No other democracy has 70 percent of its financial assets locked in public-sector banks, where the temptation is high to issue loans based on political ties. Modi could also have focused more on exports. Instead, he has been gradualist like his predecessors, broadly operating within the old consensus of excessive public ownership and state control.

To be sure, Modi has delivered on two major promises: inflation has come down from double digits to between two and three percent. Corruption has not vanished, but it has declined, with the country moving up seven spots in Transparency International's Corruptions Perceptions Index since 2014. Several of Modi's reforms have been game-changers. Although poorly implemented, the landmark Goods and Services Tax has replaced a messy patchwork of state-level taxes, finally turning all of India into a single market. By some estimates, its introduction may increase annual GDP growth by as much as 2 percent in the long term. A new bankruptcy code will ensure that the country's assets are more productively employed, as dying companies can now be taken over by new owners. Because 300 million Indians now have bank accounts, and more than a billion have cell phones and unique biometric identity cards, mobile banking has taken off. The government can therefore gradually switch from leaky subsidies to direct cash transfers. Similarly, transactions between citizens and the state are moving online, leading India to move up over 50 spots in the World Bank's Ease of Doing Business Index since 2014. Modi has begun the job of making India function better.

Modi has broadly operated within the old consensus of excessive public ownership and state control.

Other moves were smaller but important nonetheless. India began auctioning natural resources online in a transparent manner, liberalized rules for foreign investment, deregulated energy prices, and allowed the self-attestation of legal documents (which freed citizens from running around to get their documents attested by government officials or corrupt notaries). Much-needed legislation for labour reform and land acquisition got stuck, however, because the BJP did not have a majority in the upper house.

And Modi's boldest move turned out to be a blunder. On November 8, 2016, he proclaimed that 500-rupee and 1,000-rupee notes would no longer be legal tender—a sudden announcement that rendered worthless almost 87 percent of the currency in circulation. The measure, an attempt to rein in corruption and the informal economy, touched the life of every Indian with crushing effect. For months, people stood in line outside banks to change their notes. The liquidity crisis destroyed the livelihoods of millions of people. Two years later, most economists believe that demonetization is one of the worst ways to tackle corruption and the untaxed economy. Reducing institutional opportunities for bribery and embezzlement is far more productive.

Some of the most robust government institutions have weakened: official data on jobs, for example, can no longer be trusted. Meanwhile, fears about Modi's majoritarian politics have come partially true. Although bloody riots like those in Gujarat in 2002 have not recurred, diverse India's prized social cohesion is under threat, and religious minorities feel insecure. The BJP's obsession with Hindu nationalism has legitimated bans on beef production in the populous Hindi-speaking northern states and emboldened vigilantes who attack anyone suspected of mistreating cows.

MISSED OPPORTUNITIES

At the heart of Modi's failure is the weak capacity of the Indian state. Modi relied excessively on the civil service to formulate complex reforms, rather than bringing in outside experts. Civil servants are often inclined to protect the status quo instead of executing new initiatives—especially in a country where seniority, not results, still gets people promoted.

Consider Modi's Make in India program, a push to make the country more competitive in global markets. Indian civil servants lacked the competence to oversee such an effort. Moreover, since Jawaharlal Nehru was prime minister in the 1950s, Indian civil servants have looked upon exports with skepticism. Yet if India could grow its abysmal 1.7 percent share of global trade to 2.5 percent, the jobs now leaving China could come to India, rather than to Vietnam, Bangladesh, and Indonesia.

Moreover, Modi announced too many programs at once and tried to execute them all himself. He centralized decision-making in the prime minister's office—something he had done successfully as chief minister of Gujarat. But India, with its federal structure, is not Gujarat. A chief minister may be all-powerful in a given state, but a prime minister has to learn to implement programs by motivating and cajoling regional leaders across the country. To make matters worse, Modi seems to have been continuously in an election mode for the past five years. Constant campaigning diverts the executive's attention from executing reforms that often bring short-term pain for long-term gain. To be fair, Modi was aware of this problem— he championed introducing simultaneous state elections across the country, but the idea lacked support among other parties.

Modi is ultimately not a liberal reformer. He is a pragmatic modernizer, like Singapore's Lee Kwan Yew. His stance owes in part to external constraints: to this day, capitalism has not found a comfortable home in India. Many citizens believe that market-oriented reforms make the rich richer and the poor poorer. Despite the huge benefits of increased competition since 1991, many Indians cannot distinguish between being pro-market and pro-business. India has not had a leader like China's Deng Xiaoping or the United Kingdom's Margaret Thatcher, capable of selling the competitive market to the people. As a result, every Indian government has reformed by stealth, and Modi has been no different.

THE UNHAPPY CENTER

Over the next five weeks, 900 million voters will be eligible to vote and election fever will once again seize the country. Probably because Modi has failed to create jobs, the BJP's rhetoric has turned from economics to identity politics and security issues. When a Pakistan-based terrorist group killed some 40 Indian paramilitary troops in Kashmir on February 14, the government took the unprecedented step of retaliating with an air strike inside Pakistan, purportedly against a terrorist camp. The incident, and the subsequent battle of Indian and Pakistani jet fighter planes, burnished Modi's military credentials. The whole episode fits in well with his nationalist rhetoric, which brands as unpatriotic anyone who criticizes the government, especially on its military counterterrorism operations in Kashmir.

My own dreams for Modi have faded. Had he reformed vigorously and begun to deliver the promised jobs, I would have applauded him for giving India a shot at the demographic dividend. I might even have forgiven his distasteful ethno-nationalist politics. But Modi remains the most popular leader on the Indian political scene. It seems unlikely that the Congress Party under Rahul Gandhi, with its chaotic coalition of regional allies, will unite behind a positive vision and create an effective vehicle for reform. Instead, the country is polarized between those who love Modi and those who hate him. A middle-of-the-road person such as myself finds that he has no one to vote for. Many Indians are here with me, in the unhappy center.

A Hindu’s Reflections on Desire and the Human Condition

the Globalist | December 25, 2018

"Our existence is but a brief crack of light between two eternities of darkness," wrote Vladimir Nabokov in the opening lines of his memoir, Speak Memory.

Nabokov believed that human beings are more afraid of the abyss after death and viewed the one before birth more calmly.

Whereas the fearful unknown of the dark voids drove my Hindu father to mystical religion, I was drawn to the bright side. There I found kama or "desire" in Sanskrit.

Unlike animals, human beings are not governed by instinct alone. Instinctual desire travels from our senses to our imagination, from where it creates a fantasy around a specific individual.

These fantasies become the source of intense "pleasure," and this happens to be the other meaning of kama. Ever fearful of too much devotion to erotic love, most societies are worried about this charming human inclination, and instituted monogamy via the institution of marriage.

This was done for the sake of social harmony. Fancying a neighbour's wife or husband can be an intoxicating temptation. Reaching for it can bring pain and tragedy, destroying families and peace.

Kama can be a desire for anything, but like the English word "desire," it refers generally to erotic desire.

A desire to act

Kama is also the desire to act. It drove Shakespeare to sit down one morning and write dazzling Othello, who turned out, alas, to be one of the unhappiest victims of kama.

Since my ancient Hindu ancestors realized that kama is the source of action, of creation and of procreation, they elevated it not only to a god, but also one of the goals of the human life. They thought of it as a cosmic force that animates all of life.

Kama's history is the struggle between kama optimists and pessimists. While kama optimists zero in on strategies from the Kamasutra for entering the "web of desire," as William Blake called it, kama pessimists are concerned about kama's darker, sinister side.

They dwell on how it creates, but also destroys. That it may inspire love alright, but this drive can become uncontrollable, obsessive and violent.

One can spend a lifetime to discover how to enjoy desire but not too much how to strike a civilized balance between over-indulgence and repression.

Wanting what you don't have

Plato wisely observed that desire is a lack of something that one does not possess. Lovers long to unite in order to fill this deficiency. But how can something that is missing, or perishes once attained, be a goal of life.

Kamagita, a "song of desire," embedded deep inside the Mahabharata, the ancient Indian epic, reminds us that when we control one desire, another pops up.

For example, in those who choose to give up desire for wealth and give away their money, a new craving emerges — a desire for reputation. Conversely, those who choose to renounce the world and become an ascetic are often driven by a desire for heaven or for moksha, "liberation" from the human condition.

More than 2,500 years ago in the forests of north India, some curious fellows, while conducting mental experiments, called the Upanishads were struck by the unsatisfactory nature of kama.

To them, finding an answer was very important, and it was also central to the Buddha's project. The ancient yogis sought ways to quiet this endless, futile striving, and their goal became chitta vriti nirodha, "to still the fluctuations in the mind," in the words of Patanjali.

Acting without desire

The answer of the Bhagavad Gita to this riddle of kama is to learn to act without desire. But how is this possible when, according to the earliest Upanishad, "man is desire"?

You are what your deep, driving desire is. As you desire is, so is your will As your will is, so is your deed. As your deed is, so is your destiny.

The Bhagavad Gita is aware that a person cannot stop desiring, nor does it want him to lose the will to act. It proposed the idea of "desireless action," which means to renounce the personal rewards of one's own actions – in short, act so that you don't care who gets the credit.

I have read this refrain dozens of times, but I remain sceptical that a person can give up his fundamental, egoistic desire and still remain human.

A lurking pessimism

In India, we tend to blame the Victorians for the prudishness of the Indian middle class. But we must acknowledge that, lurking deep in the Indian psyche, is deep pessimism about kama's prospects.

This is what led the great ascetic god, Shiva, to burn the god of love in frustration when the latter disturbed his thousand-year meditation. Hence, desire exists ananga, "bodiless," in the human mind.

During my Christian missionary school education here in India, I was taught to equate desire with "original sin." But the ganja smoking priest from our neighbourhood temple told me stories of playful, mischievous gods, who created the world for the fun of it.

And one of them, Krishna, danced with 40,000 women for an entire Brahma night that lasted 4.5 billion human years. From him I learned that our civilization is the only one that elevated kama to an aim of life and left behind a legacy of erotic Sanskrit love poetry, the Kamasutra and the erotic sculptures at Khajuraho.

Even the devotional love of god took a romantic turn in Gitagovinda, where Radha, a married woman, longs to unite with her divine, adulterous lover.

I am at an age when I mostly relive memories, some intimate, others wistful, and still others so distressing that I am left in a sweat.
Desiring to desire

Much like the next person, I desire to desire. The human rhythm is that we live for a while and then we die. It matters to us in ways that it does not to other creatures.

What is this mattering? We want our lives to have meaning. Well, kama too is a gesture in the direction of a meaningful life.

If nothing else, it is a compensatory move. After all, we are constantly reminded about dharma, "our duty to others." Repressed as we are, the thought escapes us that kama is also a duty—a "duty to ourselves."

Ultimately, kama is needed to realize our capacity for living a flourishing life.