Third, India is a civilisational country with a long history. Nationhood in the modern times may be less than 100 years old, but historical consciousness spans thousands of years. That history, with its warts and all, cannot be divorced from the modern nation. While the traumatic bits of invasion and the rule of those who came from foreign lands cannot be hidden either. Modi doesn’t shy away from this.
Consider the political economy next. Here, the hangover of the post-independence Left is much more entrenched. The first, and perhaps the most prominent, aspect of it is the proliferating demand for welfare. Supply has responded to demand with both central and state governments and parties from across the political spectrum promising and delivering an entire bouquet of benefits and transfers. Of course, much credit is due to the Modi government for making welfare more efficient via the Jan Dhan-Aadhar-Mobile trinity. Benefits don’t leak like before and the vulnerable receive their fair share. Nonetheless, Right-wing economics, which frowns upon the expansion of welfare, doesn’t exist in the BJP or any other party.
Second, the government remains the largest promoter of business in the country with over 250 operational public sector companies. They continue to dominate sectors like defence and natural resources. The irony is that while governments justify this for strategic reasons, the outcome is that India is hugely import–dependent in these sectors, which is a strategic burden, not advantage.
Third, the essential philosophy of the administrative apparatus, a relic of colonial rule, is the control/regulation of private activity. Despite some serious efforts at easing the environment for doing business, India remains an “approvals & permissions” economy with the bureaucracy dictating terms to entrepreneurs. On critical factors of production like land, there is a near impossibility in creating a market or enabling acquisition.
The truth is that there isn’t much popular clamour for changing any of these things. In fact, the clamour begins when reforms are attempted, as the Modi government found out when it tried to liberalise agriculture, the only sector untouched by market reform.
The politically astute Modi has chosen to conserve his considerable political capital and risk-taking capacity on the matter of market reform. On land, privatisation, and agricultural reforms, the government has strategically retreated. The lack of speedy reform may cost India at least 2 percentage points per year in growth, but it seems to work politically.
It will be interesting to see if, at some point, PM Modi tries to nudge India to the Right on economic issues. After all, he is the first PM who openly spoke of minimum government, maximum governance. A younger, aspirational population ought to support a more liberalised economy that would create more jobs, raise livelihoods, and make India a truly powerful country. But for now, India’s heart beats in two different places — Right and Left. And Modi and the BJP are tuned in like no other leader or party.
(Edited by Aamaan Alam Khan)
