In the eyes of the world, the BJP is labelled in two distinct (but not always mutually exclusive) ways. Left-liberals choose to describe it as ‘Hindu nationalist’, a categorisation that carries an implied note of disapproval. At the other ideological end, the preferred term is ‘conservative’, a description that locates the saffron party as a loose Indian equivalent of the Republicans in the United States, the British Conservatives and German Christian Democrats.
Neither of these umbrella terms can do full justice describing the specific beliefs, internal traditions, prejudices and even fads of India’s ruling party. However, for the sake of argument, if the BJP is located within the broad ‘conservative’ tradition, two streams are visible, in the realm of economic thinking at least.
The first, which was also apparent in the pre-Margaret Thatcher Conservative Party, blends a strong attachment to traditional social institutions and what may loosely be called ‘family values’ with pragmatic exercise of policy options. Although descriptions of the BJP are invariably prefixed with the term ‘Right-wing’, it is not an ideological party in terms of economic thinking. There is a loose commitment to small businesses and to deregulation but even these aren’t doctrinaire concerns. In the past, the BJP felt more comfortable with issues centred on bhavna (inner feelings) than with economic issues.
After Manmohan Singh changed the direction of the Indian economy in 1991, confusion prevailed in the BJP over how much of liberalisation to support and oppose. At that time, I recall LK Advani, arguably the BJP’s most clear-headed strategist, telling me “BJP will never fight an election on economic issues.”
The remark wasn’t very prescient because after five years in government and a decent record of economic management, the BJP fought the 2004 election on the ‘India Shining’ slogan. The defeat prompted a section of the party to demand a return to ‘core’ concerns. However, even this debate was derailed by the leadership question that took an inordinately long time to be conclusively resolved.
Narendra Modi’s anointment as the leader in September 2013 managed to bridge two important strands in BJP thinking. The Gujarat leader’s appeal to the committed BJP voter outside Gujarat was based on his reputation as a latter-day Shivaji but to the wider middle class that propelled the campaign, Modi’s selling point was his development record in Gujarat. The enthusiasm over the ‘Gujarat model’ was a modified return to ‘Shining India’ but with the traditional emotional issues also addressed. In the 2014 general election, the BJP promised India’s economic regeneration, not a Hindu State.
A caveat is, however, in order. The high growth rate achieved in Gujarat wasn’t a consequence of the chief minister’s doctrinaire approach. Modi isn’t a conviction politician in the same mould as, say, Thatcher. He was more concerned with addressing concrete problems of delivery and efficiency through the exercise of pragmatic policy options. These options in turn were determined by careful calculations of what would and what wouldn’t work in Gujarat. His approach mirrored the theme that Union finance minister Arun Jaitley echoed in last week’s Union budget: That “politics is the art of the possible.”
In the aftermath of the budget, there has been some criticism of Jaitley for not being sufficiently audacious. Some of these criticisms — particularly his decision to accept his predecessor’s estimate of the fiscal deficit — are not out of place. However, in the eyes of the BJP leadership the mandate was for better governance and a better quality of life but not necessarily for a paradigm shift in economic management. If, at the end of five years, there is a discernible shift in the Indian consensus, it will not be a premeditated change born out of doctrinaire beliefs.
There is, for example, a huge difference between what the “studio pundits” (a catchy term coined by Jaitley) understand by ‘reform’ and what the government regards as its priority. To the former, the full opening of all sectors, including defence production, retail, insurance and even legal services, is central to reform. Many of these, no doubt, could form a part of the government’s future agenda but they will be need-based and a result of pragmatic (as opposed to ideological) concerns. In any case, many of these big changes will first need to be sold politically.
The BJP, it would seem, is unwilling to repeat some of the political miscalculations of the Vajpayee government, notably on privatisation.
For the moment, the Modi government’s priorities are three-fold. First, it is committed to making the tax regime less oppressive and cumbersome. For business this means a rationalisation of rules and procedures and for the individual taxpayer it involves lowering taxation to leave more money for families. There is a belief that more all-round liquidity would lead to more demand and, consequently, more business. Jaitley’s principal concern has been to improve the ease of doing business in India.
The second concern is to improve the quality of the government’s delivery mechanism. This may explain why Modi has been loath to carry out anything that seems like a purge of the bureaucracy. He firmly believes, based on his Gujarat experience, that a motivated bureaucracy is capable of enhancing the state’s capacity to deliver.
The final concern is to conduct a thorough audit of public expenditure. The proposed Expenditure Management Commission is a first step but equally this is an area that (as many ministers have discovered) will meet with bureaucratic stonewalling.
For the past 50 days or so, Modi has concentrated all his energies on understanding the ailing patient that has been put in his charge. His approach will be to get his patient back to full health. The creation of a different, New India must necessarily await a second term in office.
Hindustan Times, July 15, 2014