Elections 2019

Adit Jain In a paper entitled Changing Tides (October 2018), I argued that there were discouraging pointers about the United States economy and prospects of a slip into recession by the end of 2020 were worryingly high. Now it would seem that a global slowdown appears likely, as growth drivers across world have begun to moderate. A lot of this has to do with China whose sputtering economy has begun to ruffle those of its trade partners.

Mr Modi’s policies touched the lives of nearly half of India’s population

The decisive victory of the BJP in the recently concluded Parliamentary elections, reveals a few interesting facts. The first is, how every forecast completely missed the pulse of the nation. The English media, social media analysts and political commentators seemed to have unanimously declared that the BJP would at best fetch between 200 and 230 seats. Second, the maturation amongst the electorate is now tangible as voters distinguish unmistakably between local issues and national ones. Under Prime Minister Narendra Modi, the people assume an environment of political stability and consistency of policy. Most importantly, they expect efficient governance that touches upon their lives.

People see Mr Modi as someone trying to do something as opposed to someone trying to be someone

This leads us to the third drawing. Over the past four years, as the distinguished journalist and author Mobashar Jawed Akbar, argued in a column in Rising Kashmir, 300 million bank accounts were opened even for those without money; over 100 million Mudra loans were sanctioned where the bulk of beneficiaries were women; over 70 million families received LPG gas cylinders; and 10 million were given new homes. Most importantly, despite the commonly held perceptions of strong rural discontent, 40 million farming families got crop insurance. It would therefore seem logical that Mr Modi’s policies touched the lives of nearly half of India’s population. This counts for something. Perhaps in some odd way the “discontent” may have in fact worked in the BJP’s favour as people assumed that Mr Modi was best placed to do something about it. They saw him as someone trying to do something as opposed to someone trying to be someone.

Anther curious revelation would suggest that the widely flaunted disgruntlement about an absence of employment creation turned out not entirely accurate. As a matter of fact, payroll data suggests that formal sector employment has risen at the rate of 7-9 million jobs a year. Second, large chunks of the workforce have moved from part-time to full employment. And finally, what survey data may have missed is the rise in self employment, largely an outcome of the Mudra loan programme.

Be that as it may, going forward, the BJP must realise that private investment, despite recent traces of an upturn, still needs to be stirred and policy initiatives must address these issues. We have consistently argued that the three ingredients for private capital are the availability at competitive rates of land, labour and capital. Whilst some efforts towards the financialisation of the economy, which has enabled a shift in savings from physical to fungible, have been made, a lot more needs to be done specifically in the creation of a market for cheap, long term debt. This would require the attraction of retail savings that can be transferred through financial instruments into investment projects. However, not nearly enough has been attempted on land and labour. Some anecdotal evidence would suggest that businesses prefer to produce outside of India and, under a liberal import tariff policy, simply avoid the hassles of setting up local production. The Government is painfully aware of these challenges and it is our expectation that something will be done.

In his victory speech right after the elections results came through, Mr Modi spoke of “only two castes” in India – those who are poor; and those that can contribute. Instead of the conventional “rich versus poor” narrative, Mr Modi seemed to acknowledge the fact that both constituencies are important to the nation. What India now needs is a proper opposition with mature leadership. Checks and balances are essential in any political system and it is now up to the Congress to carve a space for itself. Perhaps the defeat would be an opportunity for the party to reinvent itself. But for now, we look forward with renewed hopes for strong policies, a fair society and just governance.

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Adit Jain, Editor