As the dance of democracy permeates India, the country is debating whether Prime Minister Narendra Modi has fundamentally transformed India for good or for bad.
Critics lament the systematic erosion of social harmony, constitutional values, and public institutions, while supporters laud the heralding of a new India, set on the path of prosperity and international glory under non-dynastic and decisive leadership.
Has Modi transformed India? While challenges to India’s democracy are grave, institutions like the Supreme Court and the Election Commission are alive. It would not be easy to transform the overwhelming diversity of India into a homogeneous Hindu nation-state.
India’s governance is a gradual story of experimentation and cogitation until an idea becomes hegemonic and reaches a tipping point. While Modi failed in protecting religious diversity, stemming corruption or creating jobs for Indians, his few relative successes such as implementing the Goods and Services Tax (GST) and the Pradhan Mantri Jan Dhan Yojana (PMJDY) build substantially upon decades of policy experimentation.
Religious and cultural diversity
Modi’s approach to religious diversity is at odds with Indian tradition. While the Rashtriya Swayamsevak Sangh (RSS), his mentor organisation, proclaims Swami Vivekananda as its inspiration, it is clear to anyone familiar with Vivekananda’s teachings that the political vision of this Modi regime distorts his teachings beyond recognition.
Quoting the Bhagavad Gita, Vivekananda, in his well-known Chicago address of September 11, 1893, held religious fanaticism as the biggest cause of human misery. He called upon all nations to embrace diversity of faiths as merely different paths to the same goal. His teachings inspired the stalwarts of Indian nationalism ranging from Mahatma Gandhi to Jawaharlal Nehru and Subhash Chandra Bose.
Instead of the catholicity celebrated in our tradition, and enshrined in the Indian constitution, the political ideology of Savarkar and Golwalker enforces a homogenised Hindu nationalistic narrative, which turns Indian diversity into a problem to be overcome by compulsory assimilation.
In this view, people with other cultural markers have to dovetail their identity with the persona of the majority community. Whipping up violent sentiments with fake nationalistic issues such as cow protection, beef ban, love jihad, ghar wapsi, and Pakistan has never been easier.
Growth, jobs, and international competitiveness
India has retained its place among the rapidly growing major economies, a legacy since the early 1990s. This growth has made an unsubstantial impact on poverty levels. To be sure, from the outset Modi‘s regime realised the importance of rapid economic growth (and it was lucky to have a declining oil bill) but failed to generate jobs.
This rights-based approach to welfare initiated under the United Progressive Alliance (UPA) regime had created strengthened the idea of citizenship by granting Indians a number of rights. The Modi government paid scant attention to this mode of welfare, and even actively weakened it.
This is clear from the implementation of the Mahatma Gandhi National Rural Employee Guarantee Scheme (MGNREGS). Ridiculing the right to work as a waste of government expenditure, the Modi government reposed its faith in the potential of the corporate sectors‘ capacity to generate jobs in the real economy. The results have been quite the opposite.
Ironically, the implementation of the right to work lost steam at the very moment when job creation was at its lowest ebb. Delayed payment of wages (which are already low) further plagued the scheme. This was most visible in parts of the country where programme implementation was earlier more effective. To add fuel to fire, the catastrophic demonetisation of the Indian economy only helped in decimating millions of jobs in the informal economy.
The Modi regime has also spurred unprecedented controversy regarding growth and employment statistics. While the unemployment rates increased dangerously during 2017-18, two members of the National Statistical Commission resigned owing to the non-release of the National Sample Survey’s December 2018 report. They claimed that an organisation with impeccable credentials for being unbiased (NSSO) was unfairly challenged by the current deputy chairman of the NITI Aayog. Could the government be worried about unemployment figures on the eve of the ongoing elections?
International competitiveness in manufacturing was at the heart of the Gujarat Model that the prime minister touted for the rest of the country. The claim of rising business confidence has not led to a surge in foreign direct investment. Moreover, exports as a share of the economy have shown a declining trend since 2014.
Digital India: Telecoms
The boom in Indian telecommunications a longwinded saga. The surge in tele-density really began during Prime Minister A.B. Vajpayee’s tenure. The Vajpayee government successfully averted Reliance Infocom’s attempt to monopolise the sector.
The regulator forced Reliance to pay $340 million to upgrade its cheap WLL (wireless-in-local loop) license to the level of the normal GSM license. Another $116 million was fined as a penalty for misusing the cheaper WLL facility as a mobile license. This regulatory move promoted competition and set the basis for a boom in the one area where India outpaced China.
India also weathered the 2G scandal in January 2008, when cheap licenses doled out to over a 100 companies constituted a grave loss to the exchequer. This episode may have hastened the demise of the Congress-led UPA coalition in 2014. The sector continued to grow at a blistering pace, despite the scandal.
Why then has that growth momentum in telecoms declined under Prime Minister Modi’s Digital India campaign? Taking advantage of a cheap spectrum, Reliance Jio has precipitated industry monopolisation to three major players (Jio, Airtel and Vodafone-Idea) from seven or eight in the past. There are fears that Jio may succeed in killing competition. Rate cuts reminiscent of the WLL crisis have come with a cumulative industry debt of USD $75 billion. How was the promotion of competition stalled?
Mukesh Ambani bought an obscure firm – Infotel Broadband Services Private Limited (IBSPL) – that secured spectrum by bidding 100 times its net worth on June 11 2010. The acquisition occurred the day after IBSPL had secured a countrywide spectrum.
Three factors helped IBSPL access spectrum at a cheap rate. First, the obscure nature of IBSPL made industry heavyweights complacent. Second, IBSPL had bid for spectrum meant exclusively only for the Internet. Buying an obscure company thus enabled Reliance to obtain spectrum at a reduced price. Third, in 2012, the regulator allowed companies to secure a unified license. This regulatory decision enabled IBSPL to enter mobile telephony. Subsequently, this firm was re-christened as Jio in January 2013.
Jio waited till October 2016 to launch its services. The regulatory conditions were propitious under the Modi regime. The government was lenient about the test time and competition requirements. The company then benefited from a reduction in internet user charges – or the amount the company would pay to use the network of other players. Even telecom secretary J.S. Deepak criticised the regulator for allowing extensive tests and for unnecessarily imposing a fine of $455 million on Jio‘s competitors. J.S. Deepak was subsequently transferred a week after he criticised the regulator.
Powerful companies have found new ways of monopolising the business environment. Will they succeed?
Modi’s clear majority and his brand of non-dynastic politics were supposed to systematically deal with corruption. It is well known that electoral funding and political control over licensing decisions breed corruption. Capping the constituency-wise electoral expense could reduce the need for political rents. Similarly, licensing, which is a technical activity, should not be the exclusive preserve of politicians. Not only did Modi make no institutional attempt to deal with election funding and licensing, but the BJP’s recent electoral bonds scheme has gone as far to attract the ire of the Election Commission.
Most recently, the Rafale deal has raised serious and well known questions. How was the deal concerning 126 aircraft transformed to one of only 36 units with a substantial rise in the cost per aircraft? Why was an experienced manufacturer like the Hindustan Aeronautics Limited replaced with a totally inexperienced Reliance Defence as an offset manufacturer of parts? Why was the issue of the indigenous production of Rafale taken off the table?
Gradual change in India
While challenges to India’s democratic institutions continue under the present regime, India‘s story of gradual change has also produced a few results. The Goods and Services Tax (GST) is a major tax reform. Even though there are complaints about implementation, no one will disagree that it required significant political will to implement a tax structure that will make for a single market in India with fewer challenges to the movement of goods.
The GST, however, is not just pure transformational Modinomics. The saga began in the 1980s when Finance Minister V.P. Singh announced the modified value-added tax under Prime Minister Rajiv Gandhi. Successive governments have worked on the GST to bring a powerful policy idea to tip.
Likewise, the Jan Dhan Yojana has led to the creation of numerous bank accounts, even though the majority of them have lain dormant. This achievement builds on years of experimentation. In fact, Nandan Nilekani actively engaged both the UPA and NDA governments within the Unique Identification Authority of India.
Governments in India succeeded after years of experimentation under various regimes – be it missiles, nuclear technology or poverty alleviation. When politicians deviate autocratically by challenging secularism, by suddenly demonetising, by empowering monopolies, or by politically interfering with universities, they pose a grave risk to the country‘s consolidation as a successful liberal democracy.
India‘s institutions have not yet been transformed beyond recognition. The Election Commission and the Supreme Court are vigilant. In the ongoing elections, the citizens of India are casting their vote.
Politicians will learn their lessons.
Rahul Mukherji is a professor and head of the Department of Political Science, South Asia Institute, Heidelberg University, Germany. Seyed Hossein Zarhani is a Post-doctoral research fellow and lecturer at the Political Science Department of the South Asia Institute at Heidelberg University. Jai Shankar Prasad and A.S.M. Mostafizur Rahman are doctoral candidates at the Department of Political Science, South Asia Institute, Heidelberg University, Germany.