Governance and stability

Predictably, the exit polls have uniformly projected a Modi-led BJP take-over at the Centre, reviving the National Democratic Alliance (NDA), after a decade of Congress dominance heading a motley crowd of parties (UPA), with a mixed record where failures overwhelmingly blotted out earlier positives. On 16 May, the nation will know the real dimensions of the so-called ‘Modi Wave’, and where the political system stands after the mighty battle of 2014.

A sober, retrospective reappraisal of the UPA years should be revealing both for its policy commitments and accomplishments, legislative and otherwise, as well as failures in providing cohesive and effective governance. This had generally affected progress in infrastructure building and in translating policies and objectives into ground realities to foster change in the quality of life for the vast majority of people, especially the poorer sections. That is where the ruling parties are judged for professions and performance by the people delivering mandates every five years. That the Congress knew, in a situation of low growth, uncontrolled inflation and fiscal and other imbalances, it was heading for a waterloo was writ large on the faces of its leaders. The Congress President Sonia Gandhi glibly assumed that the Congress cannot be counted out yet.

That the party had become rootless in most states is by now well established as poll trends make it clear in state after state. Nor did the party sufficiently galvanise itself for a counter-challenge to the BJP leader Narendra Modi’s sustained onslaught against UPA record of ‘misrule and corruption’ to swing the electorate. In hibernation, the Congress would have to re-invent itself for its future.

The world had begun to take note of UPA’s loosening grip over governance and the economy sliding down as well as the meteoric rise of Narendra Modi, as the BJP prime ministerial choice. But the international press variously rate him as decisive but ‘autocratic’, and also ‘divisive’ with his brand of Hindu nationalism. His acceptability with readiness is viewed with no surprise in a country seen to be looking for change at any cost. Be that as it may, for the present, a return of BJP to power with stability would be in line with the two-party system of governance, as in western democracies like Britain and the United States. This pattern seemed to be taking hold at the turn of the century when the National Democratic Alliance (NDA), led by BJP with its charismatic leader, Atal Behari Vajpayee as prime minister held office between 1999 and 2004.

The NDA was succeeded by the Congress-led UPA in 2004 with Manmohan Singh as the prime minister, and his government was re-elected in 2009 with the party gaining in strength. It is in its second term (2009-2014) that UPA fell into disrepute with policy paralysis adding to economic woes and an outbreak of allegations of corruption in the allocation of natural resources. The upright economist, who had a major role in steering the economy to its high growth path, has retired from the highest office.

Both the national majors, Congress and BJP, have in recent years come to rely on electoral alliances to be able to govern, reflecting the gradual erosion of their own support base in the country as well as the rapid growth of regional parties (including state-level outfits), which cannot be ignored for providing stability at the Centre. It is, therefore, that the BJP, out of office for a decade, had to go all out in building alliances of all sorts to cross the 272 majority mark in the current elections to the 16th Lok Sabha. And in Narendra Modi heading the BJP government in Gujarat, through successful re-elections, BJP found the most dynamic among the party leaders to lead the national poll campaign.  He had also been lauded for decisiveness in fostering the development of his state, sold as a model for the country by his admirers within the party and outside. Now that the poll propaganda with reckless allegations and hate speeches has died down with the end of the voting process, the declaration of results on 16 May would enable us to get the fuller picture of party positions and the emerging possibilities in the formation of a new government. It remains to be seen whether the BJP has by itself emerged as the largest single party with or without its allies to cross the 272 mark.

If so, it will be interesting to watch what further moves the party under the leadership of Modi will make to fortify itself with an unassailable majority for decisive breakthroughs in political and economic governance. ‘Governance’ and ‘development’ have been his watchwords during the election campaign.

The markets and businessmen feel confident that Modi, given his penchant for quick decision-making, would act early to ensure revival of investment. Strengthening macro-economic stability and putting India back on growth trajectory involves several major challenges including inflation to overcome.

Modi would assemble around him trusted men to advise him and who would equally be amenable to his ways of thinking. This is necessary for him to show early results in view of high expectations of voters. On the economy, he had not spelt out policy issues in case of his taking over as prime minister but Arun Jaitley, enjoying his utmost confidence, has spoken of reviving the investment cycle and sending an early signal to investors, domestic and international, that doing business would now become easier under a BJP government headed by Modi.

Jaitley has also talked of re-working the fiscal roadmap of UPA Finance Minister Chidambaram, after bringing out the ‘true position’ of central government finances, as the latter’s fiscal corrections were mainly by drastic cuts in expenditure. Jaitley says that efforts would be to clear all pending projects within six months and solutions found  for the ‘mess’ in the coal sector.Other major issues to be tackled include fixation of energy prices and treatment of fuel subsidies, a reduction of which is a pre-requisite for fiscal consolidation but was ruled out during the campaign by Modi, and tax reforms to expand the revenue base, mainly through GST. Decisions on these would have a bearing on the revised budget for 2014-2015 that would have to be presented latest by mid-July.

Credit rating agencies have also been looking on how far the new government would proceed with the reforms agenda with expedition and also whether it widens access to FDI in infrastructure and other sectors and in retail services.IPA