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The recent National Interest edition – Minimum Trump, Maximum Modi – made for a wonderful read! It was marvelous to discover 2 nationalist heads of democratic states, so different in their approaches to government.
To start with, both leaders seem keenly aware of where they come from – one minding the world’s most powerful nation, while the other overseeing the world’s largest welfare state in terms of sheer numbers. The basic natures of the 2 gentlemen under study are also wide apart. While Trump is highly interactive, tends to speak his mind & at ease in front of cameras, Modi is quintessentially, a guarded person with a steely disposition. This and the uniquely different scenarios that they are in, have also shaped their responses accordingly.
The US Situation
Private enterprise in the US has always been reputed, well entrenched and highly welcomed; it’s essentially the world’s Mecca for capitalism & free enterprise, thus becoming a magnet for high performance individuals from across the world. The country also enjoys a generally well-managed population, cemented with dole & social security.
The Indian situation
The India after independence was the India of the poor, where citizens collectively looked down upon concentration of wealth. It has gradually, though unevenly, transitioned from a “generally poor” to a primarily “low earning” category, while on the way, also ushering in a modest middle class. Certain remarkable events like the 1991 reforms and the IT revolution lifted many from them into a “rising & aspirational” middle-class category – an amazing transformation, given our numbers.
It was in Modi’s first decade however, that this India of low wage earners (below the growing middle class) is transitioning into a neater arrangement: that of an India of universal basic income (UBI) earners – a welfarist phenomenon in the making – rendering even the famed MNREGA of the UPA decade less relevant. It all starts to make sense, once you begin to count the nationwide & statewide rollouts of various handout policies that have been rolled out at regular intervals – beginning with regularization of totally free food rations (post-Covid), followed by the PM-Kisan, PM-Awaas, etc. – all riding on the stupendous stack envisioned & ushered in by Nandan Nilekani, discovered by Manmohan Singh and fortified by Modi.
Once dust on the excesses of our freebie culture settles down, state governments of all political hues will realize its limitations and pitfalls, and pretty much agree to make common cause on this issue, eventually turning it into a working UBI for the low-wage earning masses.
While the US was busy booting in, booting out & rebooting in Mr. Trump, Modi has stayed “Atal” in his tracks, and used the power of GST and indirect taxes (esp. the pay-as-you-use type, like on fuel, toll-roads, etc..) to finance welfare schemes for the masses, like the handouts mentioned above and the next generation freebies like Jal Jeevan Mission & Ayushmaan Bharat. For the middle classes, Modi has begun offering “value-added” services – like the UDAAN scheme, Vande Bharat & the latest spender’s delight – a taxable salary limit that has now breached the Rs 12 lacs p.a. milestone – something unthinkable of till it happened, and what even a supremely confident ex-IRS officer like Mr. Kejriwal did not see coming.
But wait a minute; are we digressing? Not at all, but rather coming to. To do all this, Modi needed a people’s force that would unconditionally listen to him & do as he would nudge them to. Like those state government officials who understood him & did just that in Gujarat, during his CM years. That same textbook is now playing out in his PM years. Understandably, he needed to bolster their folk, something that Shekhar Gupta termed “turbocharging the government”.
Not just that, Modi’s taken the idea to the PSU sector too. So, as the private sector has played hardball with him & been generally unable to match his expectations, barring the occasional Adani, Tata or L&T, this may have propelled his change of course. “Turbocharging……” addresses several angry birds with a few (gem)stones – creating new employment (as required), ensuring adherence to known reservations policies (so every group feels counted), partly-filling the shortfall of the private sector, the opposition unable to scream “crony capitalism”, and all done while making sure existing employment muscle is well distributed, as to avoid excess flab (the lowering fiscal deficit would include this essence too). If the PSUs seem unable to meet the demand, it makes a natural case for the private sector to join; they are welcome. The results are apparent – many PSUs have generally begun doing better. All this is not lost on Stock exchange participants, who now track more PSU stocks with renewed vigour than before. Though likely to continue as long as Modi is around, isn’t this new-found “efficiency”, a good thing?
These pieces are being published as they have been received – they have not been edited/fact-checked by ThePrint.