Scaling up the Gujarat model

Increased openness to trade and investment will enable India to regain its lost influence, says Jagdish Bhagwati

Published - September 20, 2014 01:34 am IST

The Prime Minister has an uncanny ability to connect with people. Picture shows him talking to students in New Delhi after his Teachers Day address. Photo: PTI

The Prime Minister has an uncanny ability to connect with people. Picture shows him talking to students in New Delhi after his Teachers Day address. Photo: PTI

Prime Minister Narendrabhai Modi — the suffix “bhai” which is used in Gujarat where I am known as Jagdishbhai, is surely derived from the Turkish “bey” and is not merely customary usage but also serves to remind us of centuries of intermingling of Muslim and Hindu cultures and religions in Gujarat — has completed his first >100 days in office . How do we assess his record till date and what advice can we offer him as he settles into his role as the most remarkable Prime Minister we have had since the days of Jawaharlal Nehru?

Political advice is hard to offer to a Prime Minister who managed to win a landslide victory. It would be presumptuous, to say the least. In fact, his instincts have been unerring on how to treat a humiliated Congress with its ruling dynasty finally on the ropes. When I think of the Congress party’s failure to even meet the requirement to be recognised as an official Opposition party in the Lok Sabha, and the aspiration of some of its members known in choice Hindi as “chamchas”) to rally behind a defunct dynasty, I am reminded of the opening scene in the “Gladiator.” The two Roman generals, Quintus and Maximus (who then turns into the gladiator), look at the gigantic Teutonic barbarian who refuses to surrender. Before the Roman generals unleash the mighty Roman Army on the barbarian, Quintus turns to Maximus and says: “People should know when they are conquered.” Indeed, the dynasty-afflicted Congress party has been “conquered.”

Equation with the Congress

The Prime Minister is right to have left the party alone, when, in fact, hounded by numerous inquiries that the United Progressive Alliance (UPA) government directed against him — unique in the history of selective persecution, as journalist M.J. Akbar has observed — without managing to prove his culpability in the 2002 communal violence, he might well have been tempted to return the disfavour by going after the dynasty and the Vadras. The Prime Minister has rightly left the dynasty and its cronies alone since he understands that a sure-fire way of breathing life into the dynasty, and to the party, would be to persecute it and create sympathy for it (as happened with the prosecution of Prime Minister Indira Gandhi when she lost the election after the declaration of the Emergency).

Narendra Modi is changing our democracy from one that was increasingly aloof to one that shares and seems to care

Advice on governance is also not easy to give to a politician whose track record in these matters in Gujarat as Chief Minister was remarkable. It was an insider’s joke that no top-level bureaucrat ever went home; he pretended he was too important and had to attend meetings, when in reality he read novels or comic books. The Prime Minister, in a throwback to Queen Elizabeth the Great who was known to be at work with her secretaries before daylight, has now made his Ministers and top bureaucrats work — not just pretend to work — from morning till dusk, making files move when they often gathered dust.

His uncanny ability to connect with the people has been widely noted and was evident in Gujarat when he asked everyone to send in old nails, doorknobs etc., to be melted down. This would represent their contribution to the huge >statue of Vallabhbhai Patel he was building. Their contribution would turn it into a people’s statue.

Similarly, he used his >Independence Day speech to connect us with Gandhiji and reemphasise the issue on toilets and the uplift of Dalits (whom Gandhiji called Harijans).

Again, when he applauded a young girl’s graduation, he is reported to have skilfully added that this event gave him more pleasure than his own swearing-in as Prime Minister. And he has argued that it is important to educate boys (who usually grow up pampered) to treat women with respect to address the issue of rape and gender discrimination.

Two problems

His accessibility to the public and the media, contrasted with the unwillingness of the trio of UPA leaders to appear before the public in news conferences — a common practice in democracies, most notably in the American one — has also proven to be a great asset in the governance revolution that the Prime Minister is initiating. Of course, he is a dramatically effective public speaker and is using this talent to great advantage. But he is also changing our democracy from one that was increasingly aloof to one that shares and therefore seems to care.

The Prime Minister used his Independence Day speech to connect us with Gandhi and reemphasise the issue on toilets and the uplift of Dalits

There are nonetheless two problematic areas where the Prime Minister needs to move with due speed. First, he and his Ministers have embraced many popular ideas to spend on housing, public distribution etc. Such increases in expenditures are fine if revenues are raised to finance them. If this is not done, the Bharatiya Janata Party government could repeat the mistake of the UPA-II government, whose tenure saw no match between expenditure increases and intake of revenues because of slowing growth rate, thus promising a rise in inflation. The “popular” expenditure increases then turned “populist,” undoubtedly playing a role in the decimation of the Congress party in the recent election. Unless the Finance Minister turns to this task with speed, the Prime Minister could be imperiled.

Equally, the Prime Minister has to scale up to the national level, as soon as he can, the two elements of his Gujarat success story: increased openness to trade and direct foreign investment. The recent stumble over the World Trade Organization (WTO) can certainly be reversed. But it also needs to be supplemented with substantial opening of the economy that still awaits policy reform. Such opening will not merely bring direct economic benefits, but will also make India’s markets more accessible to other nations that are eager to enter our markets. The Prime Minister should not forget that as long as India was virtually closed for business prior to the 1991 reforms, its political influence in the world had declined.

Increased openness to trade and investment will enable India to regain rapidly, and in a sustained fashion, the influence it lost with ill-conceived autarkic policies in the quarter century preceding 1991.

(Jagdish Bhagwati is Professor of Economics, Law and International Affairs at Columbia University, New York.)

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