Regardless of the BJP’s performance in the State, Modi must return to the national stage with systemic changes for development
Once the Bihar election is over, Prime Minister Narendra Modi must pay attention to the economy and quicken the pace of reforms, irrespective of the BJP’s performance in the Assembly poll. If he fails to do so, Mr Modi’s excellent marketing abroad to attract foreign investment will lose steam.
There is no doubt that the BJP desperately needs to win in Bihar, even if only to keep up the ‘Modi magic’, given the party’s defeat in the Delhi Assembly election in February. The fact that Mr Modi addressed about 40 rallies in Bihar, far more than any other Indian Prime Minister has done in any State election, shows the importance. Due to the hype created by the media, the BJP-led alliance and the JD(U)-RJD-led mahagathbandhan have caught international attention. The BJP also needs a big win in Bihar to increase its tally in the Rajya Sabha, where it is in minority.
But the recent warning by Moody’s Analytics shows that the damage has already been done. “Modi must keep his members in check or risk losing domestic and global credibility,” the report, titled, India Outlook: Searching for Potential, warned. It added that there were indications already that investors were losing faith in India’s economic prospects. The report said, “The politics need to improve and the Government’s reform agenda needs attention to achieve long-term growth.” Whether this is an exaggeration, it is clear that the investors are disappointed.
Significantly, US President Barack Obama, while wrapping up his three-day visit to New Delhi on January 27, said that India would succeed if it didn’t “splinter along religious lines.” Mr Obama echoed similar sentiments in his National Prayer Breakfast address in Washington, DC, in February. Many interpreted his words as a warning to Mr Modi.
What is the connection between rising intolerance and economic growthIJ First, whether perceived or real, religious majoritarianism, and the resultant disharmony, is bound to hold up economic growth of the country and also divert the narrative from development to disharmony. Second, if perception of discord grows, investors will take their money elsewhere. Third, if the BJP does not win in Bihar and foreign money does not come in, Mr Modi’s domestic image will take a beating.
In India, the political time-table has always been in conflict with economic imperatives. Mr Modi, therefore, needs to start his action after November 12. Here are some of the steps he must take:
First, he must assess the performance of his Ministers. It is almost 18 months since he took over as Prime Minister, and it is time to take stock, particularly of those heading the economic Ministries. Mr Modi needs to bring new people who inspire confidence, at home and abroad. If necessary, he should look for technocrats with good records.
Second, he needs to build consensus on reform measures. A bipartisan approach will help enforce the reforms, as the Congress and the BJP do not have much difference in their economic policies. If the BJP wins in Bihar, this may be easy, but even if it loses, efforts should be made to reach out to the Opposition. If the Congress adopts a confrontational approach, non-Congress opposition parties should be approached. In Parliament a better floor coordination can make a big difference.
Third, Mr Modi must pacify BJP allies like the Shiv Sena, the Akali Dal and the Telugu Desam Party, who are openly showing discomfort. The TDP wants more funds for re-building Andhra Pradesh, the Akali Dal also wants money from the Centre, and so does the PDP in Jammu & Kashmir. Perhaps, in the event of a ministerial re-shuffle, Mr Modi can give his allies some weighty portfolios to keep them in good humour.
Fourth, he has to quicken the pace of reforms particularly in the banking, power, infrastructure and labour sectors. He needs to push through key legislations like the ones relating to GST and land acquisition. The next Budget is not far away, and signals emanating from that document will go a long way in restoring investor confidence, not only in India but also abroad.