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'Big Bang reforms' must not fizzle out

The new Modi government has declared its intention to address unemployment and slowing economic growth, but it remains to be seen how it will deliver on its promise.

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The "Make in India" campaign should be revived, but Mr Modi should select specific industries instead of a diffused focus on multiple sectors.

THE Modi government has promised "Big Bang reforms" in its first 100 days. The announcement must be welcomed because the economy has slowed to a five-year low. But then, Indians have heard many slogans before - such as "Make in India", and the promise to create millions of jobs - which by and large haven't really materialised.

Indian political leaders and senior bureaucrats have often conjured up slogans from the communist world. The "Big Bang" maxim was cited by the economist Rajiv Kumar, vice-chair of the government policy organisation Niti Aayog (National Institute for Transforming India), in a reference obviously crafted to excite investors as it is reminiscent of Diwali firecrackers, which always resonate wonderfully with Indians.

Foreigners, however, may be reminded of the Big Bang reforms of the Hungarian Communist leader Janos Kadar, whose "goulash communism" alluded to both an economic explosion as well as to plentiful food.

In Hungary, the reforms denoted a sense of well-being and relatively greater cultural freedom within the Communist bloc in the 1960s and 1970s, and a welcome break from the Stalinist dogma used earlier in the country.

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The former prime minister, Jawaharlal Nehru, appears to have framed his Great Leap policy at the same time as chairman Mao Zedong. In 1957, Nehru declared during India's second parliamentary election: "Humein chhalang marni hai (We must take a leap)", and "We must end poverty and backwardness". But unlike the Great Leap of China, Nehru's leap was never properly marketed. Nonetheless, the Indian prime minister established a sound industrial and technological infrastructure.

The new Modi government has belatedly acknowledged the crisis of unemployment and slowing economic growth, declaring its intention to address both. It is worrying that the economy grew just 5.8 per cent in the fourth quarter of the current financial year, against 6.6 per cent in the preceding one, and 8.1 per cent in the year earlier.

The proposed "Big Bang" may end up like a Hungarian goulash, or more appropriately as "Mixed Tadka Dal" (tempered lentils), which Indians will better identify with.

Dr Kumar's reforms encompass changes in labour laws, privatisation or closure of inefficient state enterprises, and the creation of land banks for new industrial development.

Dr Kumar, who reports directly to Mr Modi, who in turns heads the Niti Aayog, stated: "They (foreign investors) will have reasons to be happy. You will see a slew of reforms, I can assure you of that. We are going to pretty much hit the ground running."

The new government will need to do just that because its first-term "Make in India" campaign - while a good slogan - proved a flop as manufacturing declined and unemployment soared.

The government intends to tackle politically difficult labour laws during the next parliamentary session in July in order to help companies avoid intractable disputes with workers. It aims to combine 44 central laws into four codes - wages, industrial relations, social security and welfare, and safety and working conditions.

Mr Modi's record in his first term in office was mixed: On the positive side, he initiated a new bankruptcy law to help tackle rising bad debts and slashed red tape, which moved the country to 77th spot in the World Bank's 2019 Doing Business ranking, up from 134th place when he first took office in 2014.

But his demonetisation of almost 70 per cent of the currency in circulation in order to battle corruption backfired and badly hurt economic growth, and led to job losses.

It remains unclear what the government can do to create jobs. And there is a question whether Mr Modi can boost economic growth. Indian growth is largely driven by domestic consumption, but recent data shows that consumer spending has slowed considerably.

The government should revive its "Make in India" campaign, but this will be difficult because industrial production has stagnated in the last few years. Mr Modi should select specific industries that can be leaders of the campaign instead of a diffused focus on multiple sectors.

The slogans of the past and the present reveal a vast gap between promise and delivery. The broad Nehruvian theme of "Naya bharat banayenge (We will build a new India)" in 1951 did succeed in generating a spirit of shared nationhood. But the Congress party's "Garibi Hatao (remove poverty)" slogan of 1971, which led to Indira Gandhi's landslide victory, was a promise that went unfulfilled.

At the time, in order to address the poverty of the multitudes, the Congress had to demonstrate that it cared, and thus came up with "Vote for Socialism, Vote Congress" in 1975. But neither was socialism ever implemented - only welfare programmes were begun - nor was poverty removed.

The BJP's slogan, "Ram, roti aur sthirta (Lord Ram, food, and stability") which identified the party with the Ramjanambhoomi movement in 1991 was a volatile mixture of contradictions that did not carry much resonance. And the party's "Shining India" campaign in 2004 failed because the economy was performing well but not excellently, and many Indians did not benefit from the progress.

In the 2019 general election, the Congress party had a powerful message, "Ab Hoga NYAY (Now there will be justice"), referring to its NYAY scheme that would provide Rs 72,000 annually to 20 per cent of the poorest families. The scheme, though widely appreciated, was not sold properly by the party.

Mr Modi's all inclusive slogan of "sabka saath, sabka vikas" (Everybody together, Everybody progresses), however, did connect with the masses.

In order for the entire country to march together, the ruling BJP must now correct its past mistakes and institute genuine reforms.

The promise of a "Big Bang" has generated much expectation and excitement. But whether it has a long shelf life, or disappears with a whimper, remains to be seen.

  • The writer is the editor-in-chief of The Calcutta Journal of Global Affairs