Policy reversals signal failing trust

The reversal in the last fortnight by the minority BJP government of two of its long-held and fiercely-defended policy proposals -- lateral hiring and pensions -- has quickly been traced to either the renewed opposition in the new Parliamentary arithmetic or is pictured as a strategic withdrawal in the face of electoral compulsions, given the polls in Haryana and Jammu & Kashmir, to be followed by Maharashtra and Jharkhand.

In the short-term analysis, this reading is indeed true. But beyond the immediate, what it shows is the bind of the BJP which, after all, had not pushed these policies unthinkingly or half-heartedly. These are precisely the policies that fit into the BJP idea of continued and even accelerated reforms, endorsed by its narrow group of industrialist friends and supported by the wider business community. Without doubt, the BJP and its leadership continue to believe in the policies that have come under attack.

This was equally so with the abrupt withdrawal of the infamous farm laws in Nov. 2021. Then, like now, the government and Modi himself were seen as desperate to push the new arrangements, but the political capital spent on what was being called monumental reform came then with a monumental lack of transparency and questions on intentions. It was the BJP stalwart and former J&K Governor Satyapal Malik who alleged that favoured industrialists had already picked up tracts of land in advance of the law to make a killing as prices soared later.

The current policies have come under fire on issues of undermining social justice, a charge that is already believed to have cost the BJP heavily in the last Lok Sabha polls, by hiring senior government executives without reservations in the case of lateral hires. In the case of the New Pension Scheme, now discarded, the charge is leaving people to the vagaries of the market. The government employees don’t trust the market, just as the farmers did not want an open market system and instead sought minimum support price guarantees from the government.

This highlights once again the issue of lack of trust of the ordinary citizen in the fairness of the markets and broadly the private sector, and transitively the lack of trust in the BJP-led government which is seen as speaking for the private sector and pushing for its bigger role in the economy. There are two parts to this lack of trust: one is the inherent anti-market tendency of the nation, the other is the added anti- market bias caused by undue closeness between power and private capital.

So after more than two terms with a full-blooded majority and a single leader in command, virtually no opposition on the outside (at least for the first two terms of the Modi government) and complete silence on the inside of the party, the BJP has not been able to change the national mindset at least in terms of economic affairs.

Here lies the big collapse for the BJP and the Narendra Modi brand of politics, even if the BJP for now continues to hold power at the Centre and in several States. As it pushes to exert its influence and expand its remit, the party will play for a more right-wing agenda, and even test the boundaries, and in the process stir the pot on many other fronts to divert attention, its communal politics included.

In part, this is because the BJP is today a machinery of self-proclaimed strategists and narrative shapers who tend to believe that governance is about telling stories, along the way making them up and then putting in all resources to sell these stories. The BJP is not really taking on the immense political challenge of explaining and then persuading the people to go with the right-wing turns it seeks; it is sneaking it in, and in that it is being met with defeat after defeat. The nation is saying it cannot be fooled. The fact is that India remains unconvinced on more reforms of the kind on offer (and on many other items from the BJP agenda).

Take the example from some seven years ago, when the Economic Survey of India officially noted that: “All states, all societies, have some ambivalence toward the private sector … But the ambivalence in India seems greater than elsewhere … It appears that that India has distinctly antimarket beliefs relative to others, even compared to peers with similarly low initial GDP per capita levels.”

In this, the government quoted data from the World Values Survey. Revisiting the latest data points in the same survey tells us that the baseline has not moved in India. Last year, for example, the same survey asked reactions to the statement: “Government ownership of business should be increased”. In India, 23.3% of the respondents completely agreed with this statement, higher than the number reported for China or even Bangladesh. India sat in the band where Pakistan sits, where a higher 28.7% agreed fully with that statement. In India, a total of over 60% tended to go with that statement than the other end of the scale which said private ownership of business should be increased -- just 11.1% endorsed that fully.

We may not need that survey to know that India’s economy isn’t doing well. Rising inequality, higher than that found during the British Raj according to the World Inequality Lab, coupled with the complete failure on providing decent jobs, the corruption that has seeped in at the top, right into regulatory systems as seen in the case embroiling the head of SEBI, tells us of all that is going wrong. Policies of the last decade have failed, and policy reversals in bits and pieces won’t fix the mess.

 (The writer is a journalist and  faculty member at SPJIMR. Views are personal)

(Syndicate: The Billion Press)