The Narendra Modi government announces a policy for transition to electric vehicles and then realises it is unrealistic. It extends the deadline, which will no doubt be extended again.
In a huff, the government says single-use plastic will be banned across the country in a matter of weeks, only to realise it is just impractical to do so.
If you think these are isolated examples, just look at the first budget of the second Modi government, most of its big bad ideas have been rolled back. In the budget, the government said it would super tax the super-rich. Under pressure from India Inc a few weeks later, it had to cut corporate tax. Soon it will realise that this is not what it needed to do since the main problem is lack of demand. Then, it will do something else.
Until now, the Modi government has only been accused of implementation paralysis, but the days of policy paralysis may not be far. Policy paralysis occurs when the government is too afraid to make any new policy move, fearing it will backfire. The Modi government has already slowed down a thriving economy with its compulsive need for disruption, and can’t afford to impose any more disruption (or so one hopes).
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Medicine without diagnosis
The root of the problem lies in making policy without evidence or a causal link. Sometimes there’s a political motive or a vested interest in doing so, sometimes it’s not even that.
Having dismantled the state of Jammu & Kashmir without any due process, using the Governor’s stamp after keeping the J&K assembly under suspension, the government decides to find reasons. Article 370, it says, was coming in the way of development and fighting terrorism. There is absolutely no evidence of this. Worse, the government doesn’t feel the need to give any evidence. No study, no commission of inquiry, no consultation, no nothing. How does it matter that Article 370 may actually have helped in the “development” of J&K?
Similarly, the government first announced the rebuilding of the Central Vista, the iconic heart of New Delhi, and then went around finding reasons. There’s congestion, there’s the threat of earthquake, there’s this, there’s that… again, no study, no evidence.
Fear of contrary evidence
The Modi government is sometimes so afraid of evidence-based policy-making that it decides to bury the evidence. In May this year, the union health ministry put a stop on publishing or even discussing any research regarding e-cigarettes by any government-affiliated institute. The government had already decided it was going to ban e-cigarettes, having already issued an advisory against them in August 2018. Now, it didn’t want any research saying they were safer than cigarettes.
Not even the tobacco control division of the Ministry of Health & Family Welfare cared to carry out any study or usage survey on e-cigarettes. When the result is pre-decided, why waste time with research? There was just one government-sponsored study, which conducted no original research, and conveniently ignored growing research that showed regulated use of e-cigarettes can actually help people quit smoking.
The ministry had set-up a sub-committee to look into the issue in 2014, and an RTI-accessed file noting showed a bureaucrat’s remark, “The issue does not appear to have proceeded in a scientific and objective manner. We should arrive at a decision after thorough consideration, especially of the contrarian view”.
Also read: Why the clamour to ban e-cigarettes in India when cigarettes and beedis are allowed?
The high cost of policy without evidence
Making policy without research and evidence, without establishing a causal link, comes at a high cost. E-cigarettes will now flourish in the grey market, without regulation. In the absence of regulation, people won’t even know what exactly they are inhaling. Those who want to quit smoking real cigarettes no longer have the e-cigarette option.
Similarly, the government’s flip-flops on the electric vehicle (EV) policy have contributed to uncertainly in the auto sector, and regulatory uncertainty is the enemy of investment. The flip-flop over the EV policy has contributed to the slowdown in the auto sector, perhaps resulting in job losses too.
India will achieve 100 per cent electric mobility by 2030, we were told in 2017-18, meaning diesel and petrol vehicles won’t be sold from 2030. This caused panic among manufacturers of fossil fuel-based vehicles and cheer among those looking to sell electric vehicles. But soon, the government realised the deadline was impractical and now it has decided not to formulate a promised EV policy. It realised it has to start with creating a charging infrastructure first so it has now drafted a charging policy. How soon before that is also changed, throwing many investment plans out of play?
In every such case, the government’s objective is not to achieve good long-term results but positivity-inducing short-term headlines. ‘India to go fully EV by 2030’. Three cheers. When the policy is withdrawn, there are other sexy headlines to replace them: ‘India to ban single-use plastic on Mahatma Gandhi’s birthday’. Fantastic! Then, that is also withdrawn without a whimper.
This headline management is grievous for the economy. There can’t be a better example of it than Modi’s biggest policy blunders, demonetisation and GST. Both were so ill-thought-out that the government kept issuing circulars, amendments, ordinances and amended rules for weeks. If the government had cared for evidence-based policy-making, it would have rolled out GST slowly, testing its implementation.
Research is a western concept
If the government understood causality, it would have known that hoarded cash accounts for just 5 per cent of the black economy, and demonetisation was not worth the pain. Of course, the government didn’t carry out any study on the impact of demonetisation.
The government can get away with making and unmaking policy based on its whims and fancies because the opposition is too weak to question it. Coming soon: the government says it will prepare a National Register of Indian Citizens, asking all Indians to prove their citizenship. For such a draconian move you’d think it would first show evidence that India is over-run with illegal immigrants. But it doesn’t need to, it already has a brute majority. Besides, research is a western concept, and causality is an anti-Hindu idea.
Also read: Why Indian economic tiger became puppy with tail between legs & what markets want Modi to do
Views are personal.