PM Modi with NDA allies.
Credit: PTI Photo
The recent reversal by the minority Bharatiya Janata Party (BJP) government of two of its long-held and fiercely defended policy proposals—lateral hiring and pensions—has quickly been attributed either to the renewed opposition in the new parliamentary arithmetic or seen as a strategic withdrawal in the face of electoral compulsions, given the upcoming polls in Haryana and Jammu and Kashmir, followed by Maharashtra and Jharkhand.
In the short term, this analysis holds true. But beyond the immediate context, it reveals the predicament of the BJP. These policies were not pushed unthinkingly or half-heartedly; they are precisely the policies that align with the BJP’s idea of continued, even accelerated, reforms, endorsed by its narrow group of industrialist friends and supported by the wider business community. Without doubt, the BJP and its leadership continue to believe in these policies, despite the backlash.
A similar scenario unfolded with the abrupt withdrawal of the infamous farm laws in November 2021. Then, like now, the government and Modi himself appeared desperate to implement the new arrangements, but the political capital spent on what was being called a monumental reform was undermined by a monumental lack of transparency and questionable intentions. BJP stalwart and former J&K Governor Satyapal Malik alleged that favoured industrialists had already acquired tracts of land in advance of the laws, aiming to profit as prices soared later.
The current policies have faced criticism for undermining social justice—a charge that is already believed to have cost the BJP dearly in the last Lok Sabha elections. Lateral hiring of senior government executives without reservations and the now-discarded New Pension Scheme, which left people at the mercy of market forces, have both been under fire. Government employees don’t trust the market, just as the farmers did not want an open market system and instead sought minimum support price guarantees from the government.
This situation once again highlights the lack of trust among people in the fairness of the markets and broadly the private sector, and by extension, in the BJP-led government, which is seen as speaking for the private sector and promoting its role in the economy. There are two parts to this lack of trust: one is the inherent anti-market tendency of the nation, and the other is the added anti-market bias caused by the undue closeness between power and private capital.
So after more than two terms with a commanding majority, a single leader at the helm, virtually no opposition on the outside (at least during the first two terms of the Modi government), and complete silence within the party, the BJP has failed to change the national mindset, at least in terms of economic matters. This is a significant setback for the BJP and the Narendra Modi brand of politics, even if the BJP for now continues to hold power at the Centre and in several states. As it pushes to exert its influence and expand its remit, the party will play for a more right-wing agenda, even test the boundaries, and in the process stir the pot on many other fronts to divert attention, its communal politics included.
In part, this is because the BJP is today a machinery of self-proclaimed strategists and narrative shapers who tend to believe that governance is about telling stories, along the way making them up and then putting in all resources to sell these stories. The BJP is not really taking on the immense political challenge of explaining and then persuading the people to go with the right-wing turns it seeks; it is sneaking it in, and in that, it is being met with defeat after defeat. The nation is saying it cannot be fooled. The fact is that India remains unconvinced on more reforms of the kind on offer (and on several other items from the BJP agenda).
Take the example from some seven years ago, when the Economic Survey of India officially noted that “all states, all societies, have some ambivalence towards the private sector... But the ambivalence in India seems greater than elsewhere. It appears that India has distinctly antimarket beliefs relative to others, even compared to peers with similarly low initial GDP per capita levels.”
In this, the government quoted data from the World Values Survey. Revisiting the latest data points in the same survey tells us that the baseline has not moved in India. Last year, for example, the same survey sought reactions to the statement, “Government ownership of businesses should be increased”. In India, 23.3 per cent of the respondents completely agreed with this statement, higher than the number reported for China or even Bangladesh. India sat in the band where Pakistan sits, and a higher 28.7 per cent agreed fully with that statement. In India, a total of over 60 per cent tended to go with that statement compared to the other end of the scale, which said private ownership of businesses should be increased—just 11.1 per cent endorsed that fully.
We may not need that survey to know that India’s economy isn’t doing well. Rising inequality, higher than that found during the British Raj, according to the World Inequality Lab, coupled with the complete failure to provide decent jobs and the corruption that has seeped in at the top, right into regulatory systems, as seen in the case embroiling the head of SEBI, tells us all that is going wrong. Policies of the last decade have failed, and policy reversals in bits and pieces won’t fix the mess.
(The writer is a journalist and faculty member at SPJIMR) (Syndicate: The Billion Press)