NEW DELHI – According to Prime Minister Narendra Modi’s supporters, his overwhelming victory in India’s general elections was a sweeping repudiation of everything for which the previous United Progressive Alliance (UPA) government, led by the Indian National Congress, stood. Will Modi live up to voters’ expectations?
There has certainly been a lot of hype. Modi, it was claimed during the election campaign, would reverse the UPA’s “poor governance” and “policy paralysis,” introducing a radically new approach, based on his corporatist “Gujarat development model.” In doing so, he would transform India, liberating it from the UPA’s exhausted and ineffective policies and thus improving the lives of millions. “Achhe din aane wale hain” – “the good days are coming” – his supporters declared upon his victory.
In particular, the Modi public-relations machine proclaimed an end to the sops and compromises that supposedly characterized the UPA coalition. Modi pledged to make the tough decisions that the UPA could not, weaning Indians from the statist culture of “doles” and subsidies, while pursuing bold policies aimed at spurring economic growth and job creation. Indians today, he averred, want jobs, not handouts.
It took just a few weeks for the hollowness of these claims to become apparent. A commonly cited example of the outgoing government’s alleged economic mismanagement was its sugar-price policy. Powerful sugarcane cooperatives, led by major UPA supporters, supposedly drove the government to fix extravagant prices and write off sugar farmers’ bad debts, leading to over-production.
Instead of eliminating this system, as expected, Modi’s government has augmented subsidies for sugar exports to support higher output, raised import duties on sugar to discourage foreign competition, and increased the percentage of sugar-based ethanol that must be blended with petrol. His motivation is not difficult to discern: his Bharatiya Janata Party (BJP) hopes that such concessions will help it to wrest control of Maharashtra, India’s main sugar-producing state, from the UPA in the upcoming state assembly election.
This goal explains another policy reversal as well. The UPA’s critics long claimed that unsustainably low, state-dictated passenger fares and freight charges for rail services – which could not cover the cost of maintenance to ensure the safety of trains and tracks, much less enable expansion and improvement of service – reflected the government’s inability to make tough decisions.
It is true that coalition politics prevented decisive action, with a railway minister being summarily dismissed by his own party leader – whom the UPA was politically unable to confront – after attempting to raise fares. But, in the pre-election interim budget, the UPA government finally bit the bullet, proposing a 14.2% increase in rail fares and a 6.5% hike in freight rates. Per India’s code of political conduct, the budget changes were deferred until after the election.
Soon after taking office, the Modi government announced its intention to implement the price increases, though officials made sure to emphasize that they were merely following through on an existing mandate. Then, faced with public resistance, they moderated the planned hikes, particularly of the significantly discounted monthly pass currently available to suburban commuters – an important segment of the electorate in Mumbai, Maharashtra’s capital.
Modi had previously derided the UPA’s populist railway ministers for distorted policies that punished businesses, declaring during his election campaign that India’s railways should be run more like China’s, with increased government investment, including for bullet trains. Yet, no sooner had he been sworn in than he acquiesced in precisely the kind of political compromise to which he and the BJP – which won a parliamentary majority, and thus does not depend on coalition partners for its government’s survival – was supposed to be immune.
Modi’s government has adopted an even weaker stance on another unpopular but necessary decision: fuel-price increases. In order to align Indian fuel prices more closely with world market prices, thereby enabling domestic oil and gas producers to finance exploration and extraction, the UPA government had announced that natural-gas prices would be doubled from April 1. But, as with railway fares, the final decision was left up to Modi. And, instead of doing what was needed – even while blaming his predecessors – Modi postponed the decision until September.
This hypocrisy has characterized virtually every policy decision that the BJP government has taken so far. Despite the BJP’s strident criticism of the United States-India Civil Nuclear Cooperation deal – the UPA administration’s signature foreign-policy triumph – Modi’s government has just ratified an India-specific “additional protocol,” granting the International Atomic Energy Agency access to India’s civilian nuclear sites.
Moreover, the BJP had opposed interaction with Pakistani Prime Minister Nawaz Sharif, pending satisfactory progress on the prosecution and punishment of the perpetrators of the 2008 Mumbai attacks, which killed 164 people and injured more than 300. Yet Sharif was an honored guest at Modi’s inauguration, exchanging gifts with India’s newly affable leader.
The Modi government has also adopted the UPA-proposed Goods and Services Tax, which had been stalled by opposition from BJP-ruled states (including Modi’s Gujarat). And it will strengthen the national anti-terrorism effort, which Modi previously denounced as an assault on Indian federalism.
Many Modi supporters in the media have already begun to decry the series of policy abdications Modi has conducted since his campaign. Indian citizens who thought that they voted for change are beginning to wonder if the BJP has simply reprised the UPA government’s policies. As a member of the previous government, I must say that that may not be such a bad thing.