It is curious how Narendra Modi has gone from the mantra of “empowerment, not entitlement” to putting free cash into the bank accounts of small farmers. The election eve populism amounts to conceding what his government otherwise denies: the Indian economy hasn’t brought Achhe Din to the people of India. Be it rural wages or crop prices, job creation or new investments, all of it has been bad, never mind the fudged or hidden data.
The government has reached this nadir thanks to the prime minister’s shallow understanding of political narrative.
Politics over policy
When Narendra Modi took over as prime minister in 2014, he had before him the onerous task of re-booting the Indian economy that had been suffering from UPA-2’s policy paralysis.
The first thing Modi should have done was to take head-on the problem of ballooning bank NPAs. Raghuram Rajan’s noises on this front went unheeded. If the crisis of non-performing assets (NPAs) was allowed to become any bigger, it would hurt bank credit and thus new investments and thereby growth.
Modi thought he could just kickstart investment by screaming ‘Make in India’. Narendra Modi thinks ideas in India suffer because they aren’t sold well. He must be the world’s first leader to think he can make people buy a new tax, GST, as a great thing.
Also read: Modi ji, stop repeating Vajpayee’s mistake on the economy
Early in his regime, Narendra Modi wanted to make land acquisition easier by amending the law. Fresh from an eight-week holiday, Rahul Gandhi called the Modi government ‘suit-boot ki sarkar’. Modi was so rattled by that phrase that he altogether buried the idea of amending the law, after having promulgated an ordinance to the effect.
Last year, non-repayment of debt by Infrastructure Leasing &Financial Services triggered panic in the Indian economy. Rs 90,000 crores were at risk. IL&FS going bust could mean yet more NPAs. At the centre of the IL&FS crisis was the 2013 land acquisition law that made many projects unviable.
Winning election doesn’t make you an economist
Modi should have spent some of his enormous political capital on amending the land acquisition law. This would have meant letting Rahul Gandhi have a short-term political victory. But those projects would have taken off. We would have seen more investments flow, more jobs created, incomes rise. In other words, Achhe Din. Ditto if he had listened to Raghuram Rajan and acted decisively on cleaning up the banks in 2015.
Modi didn’t feel he needed to make such tough decisions, spend his political capital on what the men in suits wanted him to do. The term ‘suit-boot ki sarkar’ seemed such a political threat that Modi was plotting ways to become the messiah of the poor.
If Modi could win elections without taking the tough decisions the economy needed, why would he listen to economists? As he famously put it, it was a contest between ‘Harvard’ and ‘hard work’.
Modi launched one scheme after another in the typical Congress way but with better branding. Cleaning up the banks or amending the land acquisition act wouldn’t have given him an opportunity to make a sudden, grandiose address to the nation. Such an opportunity came through demonetisation.
Long-term success comes on the back of arduous work, patiently planting seeds and waiting for fruition. But Modi the politician has no patience.
Also read: PM Modi has a new problem: Confidence of Indians in economy drops sharply
Narrative is what Narrative does
In Modiworld, Narrative is everything. All it takes to stay on top is the right narrative. And so, he has the right spin, the catchy acronyms, the best binaries. He knows how to drill an idea into your head.
Modi’s mistake is to think ‘narrative’ is about words. It is not. Narrative is about action.
The reason why ‘narrative’ has become an annoying cliché is that people think it’s all about giving a good spin, using the right words. Killed by over-use, ‘narrative’ is now called storytelling. The narrative-wallahs don’t understand that good story-telling cannot make a bad story look good.
In 2014, Modi had based his development narrative on the claim that he had already developed Gujarat. Look, his supporters said, the Tata Nano plant eventually found a place in Gujarat, the state where things get done.
Telling a story well can make it reach far and wide. But it has to be a good story in the first place. Narrative is not what Narrative says. Narrative is what Narrative does.
Pain is pain
Modi and his supporters think narrative wars are won by manipulating social media, bombarding the public with WhatsApp propaganda, bullying and buying over mainstream media, discrediting liberals, calling the opposition names, fudging the data, photoshopping images, increasing the video speed of a running train by 2x.
In truth, narrative wars are won by doing the unsexy things that don’t make for great instant headlines and shareable images. Narrative wars are won with real and not fudged economic growth rates, which create real and not fictional jobs. If Modi had actually saved Rs 3-4 lakh crores in demonetisation (as he had hoped), that would have been a narrative victory.
Also read: Loan waivers & lending targets for banks are signs of lazy govt, Raghuram Rajan says
When DeMo began to fail, we were told it wasn’t about killing black money but promoting cashless transactions. When cash was back, we were told DeMo’s objective was to increase the tax base. Many spin cycles later, there comes a point when the bullshit cuts through the good storytelling and the story make sense no more.
You may fudge the data but pain is pain. You may hide unemployment figures but that brings no solace to those who can’t find jobs. You may say there is no farm crisis but when you announce cash doles for farmers, but your filmi one-liners can’t explain the contradiction. You may game the ‘ease of doing business’ rankings but that won’t prevent IL&FS going down. You may fudge GDP figures but everyone can feel economic activity like the weather.
there are some useful things Modi has done – cleanliness is much improved, and certain things like NPA/bank fraud and corruption, and cleanup through insolvency, has much improved. Also his willingness to take on pakistan without being flummoxed by the nuclear bogey. But certainly India deserves a much better PM who can do much more on the economic front, education, on business revival and manufacturing, on toning down communalism and at least turning anti-muslim into a civilized debate on islam such as we see in the western world.
Also foreign and defence policy has not been very good , modi has given huge payraises to civil and military officials without calculating the cost, the defence budget has no attention to replacing antiquated equipment although this problem has been ongoing since at least after indira gandhi.
MODI IS A DISASTER. HE HAS RUINED THE LIFE OF HUNDREDS OF FAMILIES ESPECIALLY OF ARMED FORCES. HUNDREDS HAVE BEEN WIDOWED AND THOUSANDS KIDS ORPHANED.
The problem , the fact, is that Modi is neither economist nor politician. He is simply a venom spewing vain glorious megalomaniac.The fact that by some mischance he was elected to be prime prime minister shows that democracy has its limitations as we saw in the case of Trump and Netinyahu elected in their countries.This is not my observation but that of Amos Oz the renounced peace activist and author.
And if people have not understood his hollow narratives then they will be dwelling like chickens in their coupe for the rest of their lives.
Absolutely.
The antidote for Indian economy is free market capitalism. But the man to administer the antidote will never take birth in cursed India
NPAs during 2014 -2018 are those loans granted before 2014. I am told KING fisher Airlines was granted a Bank guarantee by DENA BANK after the account became NPA. RBI director had enough powers to question such decisions and ask for review of problematic accounts.Permission from Finance Ministry or PMO was not necessary. RBI who was asking for autonomous powers should have tried to exercise the powers vested with them at the appropriate time. Did they do it?
Great ! SO the writer thinks he has more understanding than modi :-)…. When the writer “grows up” in some years he might think that he use to take himself too seriously……Appreciate the confidence of the writer in passing such sweeping statements!
Two issues Mr Vij has highlighted as being without understanding of economics:
1. Bank NPAs. Prof Rajan was on the ball when he pointed out the NPAs. However at that time the IBC laws and rules were not ready. And bankers themselves were not feeling any grief. Only after the bankruptsy laws were made and the courts were operational, could the NPA issue was underway to resolution.
2. The many NPAs were the result of the land acquisition law forced by RaGa. With added costs of land purchase, and the additional delays caused by all the politics, the financial viability of quite a few projects was killed. Why does not Mr Vij blame RaGa for at least some political immaturity?
Modi’s done a bad job of leading and empowering his team. His policy decisions though are like most politicians— based on fears. He has vision about instilling confidence in Infians and is not corrupt but can’t seem to implement needed changes…
The sad thing is how bad everyone else in Indian politics is. From the entitled creatures of Congress to the host of other personality cult leaders.
The next few years will be interesting (and not in a good way).
Mr Modi is at best an unthinking man and the one who does not want the thinking men or women to open their mouth or pick up the pen and write what they think could be done to take the country forward. His ministers are expected to defend policies that make no sense, even after a simple analysis – read DeMon.
He tells us all the time that he knows everything that has to be known and we have to only keep him as a PM for rest of our life. It does not matter that he is getting to be 70 and the median Indian age is less than 25. I always wonder – how does he find time to be so well dressed all the time?
He pretends, mouths dialogues, lies in our face and does very little to make a difference to an average Indian’s life. He cut the government expenditure (% of GDP) even after 2 consecutive droughts, is hell bent on selling everything to private sector (even to the bankrupt and debt-laden ones).
We don’t know who he listens to – who his advisors are? All what we hear, read or see is his photograph on everyday – hundreds of time. Obviously, his party has tonnes of unexplained money and he does not hesitate to spend public money on self-promotion. He is for sure a great actor – the one who can deliver dialogues and fake emotions very well.
And, of course, the man has hired an army of trolls to abuse rest of us – all the time, if we have the courage to challenge his policies.
But you are still the same as you were in 2014. Just ranting, ranting and ranting without a millimeter of improvement in knowledge and thinking. Keep going.
Very well said! Vij is a dedicated sycophant of Gandhi family, so he is unlikely to improve.
Let him rant endlessly – he thrives on that. Recently he came up with a gem of an article about Robert Vadra’s transformation/evolution – hope you didn’t miss that. The sad part is that Hon’ble Mr. Vij doesn’t realize that for readers to follow him, there has got be a modicum of objectivity. I fail to understand why Shekhar Gupta, after a lifetime of journalism dedicated to fairplay and equitability, has to give space to such obvious leaning. You are encouraging mediocrity, SG.
As we move closer to the election, each Indian, with less marshalling of thought than appears in this fine column, will be thinking along these lines. Wondering why Achhe Din are not even discernible on the horizon. Banking and power are two sectors where deep structural reform should have been attempted from the time of the first Budget itself. Not Sanskritised words like UDAY and Indradhanush. The whole infrastructure of marketing, spin begins to look flaky after a while, without a first rate product, with the troll army being especially destructive of goodwill.