Three big strikes for reform

By passing the Insurance, Coal and Mines and Minerals Bill, Parliament has given a big boost to Narendra Mddi government’s reform agenda. Interestingly while the Insurance bill was supported by Congress but opposed by TMC and few others, the very same parties supported the Mines and Coal bill opposed by Congress!

What this implies is, while the risk of being seen as ‘anti-farmer’, which the Land bill debate has been reduced to, made these parties join Sonia in her ‘march’ to President’s office they have no intention of letting her steal the thunder and grab leadership on all issues, even where these parties and their governments tend to gain by reform moves.

In states where JDU, TMC, SP are in power, they have absolutely no intention of allowing Congress room to grow back to No. 1 position. They may, at best, be okay with letting the party in as a junior partner to be chucked out at the slightest sign of growth or ambition. If that means cooperating with BJP tactically, so be it. The vote bank of these parties overlaps considerably with that of Congress, so it can only be a zero sum game.

This can only be good news for those hoping for ‘ache din’ in the coming days and months.

 

Pending bills in Rajyasabha – Is Modi regime derailed?

We often read about logjams in the US House or Senate, with the President’s party outnumbered by his opponents who do their best to scuttle his agenda. India, despite its much more divided and bitterly polarised politics, has not seen much of this. No doubt there have been noisy and prolonged disruptions in the Parliament but those have been event driven or tactical. They have often resulted in back room deals and compromises that eventually lets the government have its way. In any case the opposition never had the numbers to force their way other than through disruptive tactics such as storming the well of the house, preventing any business from being transacted. In other words the problem was not ‘structural’

But now Narendra Modi’s less than year old regime faces, for the first time, a clear and present danger of seeing its legislative agenda brought to a complete stop at least as far as meaningful bills go. This is because its problem is not one of tactic or strategy but a structural one, much harder to solve. Journalist R. Jagannathan’s excellent article in the First Post provides valid reasons for this – BJPs opponents are fighting for their political life, nothing less.

Let’s examine these questions

  1. Who’s to blame
  2. Prognosis for current stalemate
  3. What does it imply for Modi’s government for the rest of the term
  4. BJPs game plan

Who’s to blame?

As with almost anything else in Indian politics, this depends on who you ask or read. Pro-Congress Marxist newspapers like Hindu have clearly laid the blame at the foot of Modi regime. In fact their coverage of Modi’s troubles has been sort of celebratory, with every opposition victory presented as if it were a fresh triumph by the men in blue at the World Cup Cricket series now on in Australia. See this article and this

All things considered it could be said Modi government perhaps erred in rushing through the ordinances, particularly on matters like Coal, Citizenship, Insurance etc., where the chances of consensus were much higher. As far as the Land bill goes, he would never have been allowed to have his way anyway, so an ordinance may have made sense after seeing the rest through. Is the government so bereft of legal talent that it could not see the difficulties in using the joint session route? Or the tactics opposition could adopt to legally stall its agenda?

It is easy to have perfect vision in hindsight. Anyway, these are water under bridge and the more important question is what happens going forward.

Prognosis for current stalemate

Again, if one were to go by the pro-Congress media, Modi regime is doomed. None of the five pending bills would pass the Rajya Sabha, forcing the government to either give it up or risk another confrontation with the President as well as the opposition in extending the ordinances. Even the joint session route is years away given the rules and opposition strategy of not rejecting the bills outright.

As usual back room negotiations are on. And the Central government is not exactly powerless, particularly given the vulnerabilities of some of the opposition parties and their leaders. This all or nothing scenario may not come to pass. It is quite likely that some of the less contentious bills may pass through even as the opposition has its way on the Land bill and perhaps even the Insurance bills. In other words a 3-2 victory for the opposition is likely. The smooth passage of the Citizenship bill is a pointer in this direction. That was hit with an ordinance too.

The primary reason for this optimism on our part is the fact that the opposition would not like to be seen as too anarchist as it doesn’t suit their agenda. Their case would be, “Look, we are so nice, we help pass bills that are good, only oppose ‘anti-people’ ones”

Implications for the remainder of Modi’s term

If at all once could turn this episode into something positive, it should be remembered, all this is happening early in his tenure. In other words, he has almost four years to rethink strategy, retool, and change course.

Clearly, contentious and easy to politicise issues, or in other words, bold reforms, cannot be legislated by this regime until and unless it gets majority in the RS. That may never happen in this term.  Any attempt to tinker with labour laws, for example, would be very easy to project as anti-labour and block.

This may require a careful re-calibration of expectations. Primarily expectations created by Modi’s own words and actions in the past which have been of the He-Man, Terminator variety.

Indeed there are so many things that can be done outside of the Parliament and this is time to go deeper into those and come up with creative solutions. For example, the Companies Act, among other laws, allows considerable leeway to the government to issue Notifications that can be quite powerful.  So much can be done to simplify business compliance just by tweaking them.

By keeping a steady trickle of non legislative reform initiatives, along with simultaneous attempts to reach out directly the the public and sell the government vision can ensure Modi’s agenda not only survives but flourishes. As the Economic Survey clearly points out, big bang reforms are not feasible in a country like India except during a crisis.

"Boldness in areas where policy levers can be more easily pulled by the center combined with incrementalism in other areas is a combination that can cumulate over time to Big Bang reforms" (Economic Survey 2015)

This would gain praise from the business lobby as well as international media and thereby generate a positive environment for investments and eventually jobs to grow.

BJPs game plan

The confusing statements coming from Prime Minister himself have made it quite difficult to figure out BJPs game plan. Is it conciliatory or confrontational? If confrontational, why beg cooperation and offer olive branches? If conciliatory, why not concede some of the more harmless of opposition demands such as allowing them to seek clarifications on PM’s address to Rajya Sabha? After all he can be better than the best in replying to any political attack?

Be that as it may, there are still many things BJP can do to keep its momentum going despite its crippling lack of majority in the RS. In fact it could even turn it into an advantage!

Modi is not a Maun Mohan Singh, not only he talks (some would say too much) but he is a forceful communicator. He goes direct to the people, bypassing hostile ‘liberal’ media elites. as his recent effort to sell the Land bill to a rural audience in Rajasthan clearly shows. While the opposition may have the numbers in Rajya Sabha, it doesn’t have anyone of the calibre of Modi to sell its vision to a national audience.

What this implies is they could win a battle or two, yet lose the war. After all Modi could easily turn the tables and blame the opposition tactics for any problem on the investment or jobs front while claiming credit for any positive news as hard won victory ‘despite opposition sabotage’. Given the discredited and corrupt image of some of the ageing patriarchs of the opposition, this message could indeed sell. For example, if the Coal bill were to be defeated, it would be politically very easy for Modi to portray this as “anti-national” move by the “corrupt” Congress to protect favored businessmen who got direct allotment, depriving the nation of revenues running into lakhs of crores of rupees.

BJP’s game plan should also be to continue its aggressive moves to expand its base in various states thereby signalling clearly that its political agenda cannot be traded for cooperation in Delhi. This is likely to force some of the more amenable players to work with BJP to seek common ground instead of working with the opposition and gaining nothing. States where the BJP threat is remote and distant (like Tamilnadu) are more likely to fall in line to this approach. States like Bengal, due for elections in the near term and where the BJP expansion is credible and threatening, are obviously lost causes in terms of getting the opposition (TMC in this case) to cooperate on any term.

Obviously, needless confrontation and strong words can be and should be avoided. But meekly surrendering to the opposition tantrums and turning dovish is clearly not the option. This essentially means a free handle to BJPs opponents to continue their war while Modi is effectively disarmed. In fact, no matter what the price is, some parties like TMC and even the Congress would simply see no benefit in siding with the BJP or its reform agenda. They get no credit for its victory and may be blamed for not opposing strongly enough by upstarts like AAP, if it fails.

In sum, a clever plan to push non-legislative reforms combined with aggressive moves on the political arena to counter the opposition propaganda may yet see the BJP get its way.