{"id":258858,"date":"2015-11-13T12:56:55","date_gmt":"2015-11-13T07:26:55","guid":{"rendered":"http:\/\/www.tehelka.com\/?p=258858"},"modified":"2015-11-13T12:56:55","modified_gmt":"2015-11-13T07:26:55","slug":"not-a-huge-dent-in-the-road-for-reforms","status":"publish","type":"post","link":"https:\/\/tehelka.com\/not-a-huge-dent-in-the-road-for-reforms\/","title":{"rendered":"Not A Huge Dent In The Road For Reforms"},"content":{"rendered":"

\"Firm
Firm on reform<\/strong> Come February, Finance Minister Arun Jaitley could pull off a \u2018big bang\u2019 Budget to boost investor sentiment. Photo: PIB<\/em><\/figcaption><\/figure>
\nThere is one side of the coin. This projects a negative image of a near future where NDA-2 struggles and trips to get several critical reforms passed in the Rajya Sabha. Since the government doesn\u2019t have the requisite numbers in the Upper House and can\u2019t increase them after the dismal defeat in Bihar, the situation will worsen. Therefore, it is goodbye to reforms for now, so think the stock investors, currency traders, economists and the business community.
\nThen there is the other side of the coin. It shows a positive image. Finance Minister Arun Jaitley said that Bihar was neither a referendum on Prime Minister Narendra Modi nor will it impact the pace of economic reforms. Credit rating agency Fitch claimed that it won\u2019t change the medium-term growth outlook for India because of the Bihar debacle. Several stock market analysts feel that NDA-2 will now talk to the political Opposition to arrive at a consensus on reforms.
\nAmid these contradictory views, there is talk that the forthcoming winter session of Parliament will be a washout, like the previous monsoon one. The regime will be forced to adopt extra-parliamentary strategies to push through policies, just like it did in the case of the land acquisition Bill where the states were asked to formulate their own laws.
\nAnd, come February, the regime could pull off a \u2018big bang\u2019 Budget to boost investor sentiment.
\nUnfortunately, all these perceptions and doubts are based on half-truths and myths. For the sake of simplicity, we shall refer to both as myths given the aggressive and convincing manner in which the half-truths are propagated. Each side uses the data and analysis that suit their conclusions. No one has delved into them in an objective manner. So let\u2019s bust those myths.
\nMYTH # 1<\/span> DOWN AND OUT IN RAJYA SABHA<\/strong>
\nWithin the BJP\u00a0and its allies, there was a feeling that despite the defeat in the Delhi Assembly election, if they could ride the victory momentum in Jammu & Kashmir and Jharkhand to win in Bihar, this would translate into huge numbers in the future state elections. Thus, the BJP and its allies were expecting to do better in Assam and Tamil Nadu (with the AIADMK) in 2016, Uttar Pradesh, Uttarakhand and Himachal Pradesh in 2017, and Karnataka in 2018. In addition, they would have got a few seats even in Kerala (2016) and West Bengal (2016).
\nAccording to niticentral.com, a Right-leaning website, NDA-2 was expected to do well in all the Assembly elections between 2016 and 2018, except in Bihar, where status quo would be maintained. If the predictions turned out to be true, NDA-2 would have got a majority in the Rajya Sabha, thanks to allies like AIADMK\u00a0and the Odisha-based BJD\u00a0(though Chief Minister Naveen Patnaik hasn\u2019t supported the BJP\u00a0unilaterally), besides the nominated members. (Rajya Sabha members are chosen by the Assemblies, so a party that has more legislators across a greater number of states has a bigger chance of electing more members to the Upper House.)
\nContrary to this analysis, Aniruddha Sethi claimed that the road ahead won\u2019t be so smooth for the BJP. His calculations showed that NDA-2 \u201cwill have a tally of 94 (in the Rajya Sabha) by the end of the term. If one adds the 11 Nominated members, the NDA\u00a0will have 105 members working for it. The majority needed for the NDA in the Rajya Sabha is 123. Even at the end of the term, with all its sympathetic independents and nominated members, the NDA\u00a0will still not have a majority.\u201d This, he added, was in the case of \u201ca hilariously optimistic prediction\u201d in the Assembly elections.
\nHowever, all these figures will need to be recalculated now. Because political experts now contend that the Bihar defeat will put a brake on NDA-2\u2019s political acceleration in the forthcoming Assembly elections, especially in states such as Uttar Pradesh. Therefore, its strength in the Rajya Sabha, by 2018 or 2019, may be lower than the estimations by Sethi. But what does this mean for Modi\u2019s ability to push through critical legislations in Parliament over the next few years?
\nIntuitively, one might sense that although NDA-2\u2019s numbers may increase in the Upper House, the logjam with the Opposition would continue. But it is not a completely lost case. Remember that the Congress, which has the largest numbers in the Rajya Sabha, will continue to lose out in the future. Its numbers will drop consistently because of defeats in several Assembly elections already, and its inability to win future ones. The caveat, though, is that the Congress\u2019 fortunes can swing positively since it did quite well in Bihar.
\n
\n
\"Land-locked?
Land-locked?<\/strong> Any indication that the BJP might bow to \u2018populist\u2019 pressure on matters like land acquisition is bad news for big business. Photo: Vijay Pandey<\/em><\/figcaption><\/figure>
\nMYTH # 2<\/span> UNITED THEY OPPOSE<\/strong>
\nGiven the debates on growing intolerance in India, ban after ban, and the aggressive communal stance of Hindu Right outfits, most Opposition parties have spoken out against the BJP\u00a0and its allies. However, there is little unanimity among the Opposition on other political and economic issues. Although there was a combined opposition to the land acquisition and Good and Services Tax (GST) Bills, NDA-2 did manage to pass several other bills in Parliament.
\nPolitical pundits feel that the Congress spearheaded the united opposition against land acquisition and GST. Its current numbers in the Rajya Sabha enabled it to stall any Bill it was opposed to. However, these numbers will change dramatically, first in 2016 and then in 2018. Within three years, the Congress will become a ghost of itself in the Upper House. Unless it does well in the future Assembly elections \u2014 its performance was beyond expectations in Bihar \u2014 it will find it tough to rally the regional parties.
\nThere have been instances in the past where regional parties took a stance contrary to that of the Congress. Maharashtra\u2019s Nationalist Congress Party decided to support the BJP\u00a0in the state and Uttar Pradesh-based Mulayam Singh Yadav of the Samajwadi Party walked out of the Grand Alliance in Bihar, which comprised JD(U), RJD\u00a0and the Congress. Now, given Nitish Kumar\u2019s wonderful performance in Bihar, regional parties such as the TMC\u00a0in West Bengal, the BJD\u00a0and the AIADMK\u00a0may wish to form a Third Front under Nitish\u2019s leadership and with support from Congress.
\nThese circumstances will reduce the Congress to the stature of a non-mainstream political party, a process that began during the run-up to the 2014 Lok Sabha election. No wonder Jaitley felt confident that Nitish, despite his alliance with the Congress in Bihar, would support the GST, along with other allies and a few non-allies such as the BJD\u00a0and AIADMK. If the BJP\u00a0manages to woo the non-Congress Opposition parties, it may still get the numbers in the Rajya Sabha.
\nIn fact, the united opposition against the BJP\u00a0was enabled in no small measure by the Congress\u2019 numbers in the Upper House as the ruling party would not talk to the largest opposition party in Parliament. In the future, if the BJP\u00a0continues its discussions with the non-Congress parties and the Congress\u2019 strength in the Rajya Sabha is depleted, the regime might just find the going less tough. The process has already begun, with Jaitley saying that he was willing to evolve a consensus even with Rahul Gandhi. However, to make any headway there, the BJP\u00a0and its allies, both political and ideological, will need to go slow on the Hindutva agenda.
\nMYTH # 3<\/span> FUTURE OF REFORMS<\/strong>
\nAlthough most critics view the BJP\u2019s Bihar loss as an end to reforms, or in terms of more obstacles on that path, there may be several positives for the government. First, it won\u2019t be in a hurry to push through, or even bulldoze, policies. A JD(U) Rajya Sabha member said on a TV channel that there were several instances in the past few months when the NDA-2 would introduce Bills without informing the other parties. It seemed like a case of majoritarian tyranny, although the BJP\u00a0dubbed the Opposition in the Rajya Sabha as the \u201ctyranny of numbers\u201d. This may reduce in the future.
\nSecond, this change in the mindset will lead to a process where the BJP\u00a0will try to arrive at a consensus, both with its allies and those who may be sympathetic to their causes. Clearly, this will change the political process and will be healthier for the functioning of a democracy. Policies and new initiatives will be debated and discussed, both within the government and outside it in a more transparent and open manner than has happened in the past 18 months. The BJP\u00a0can easily reap the benefits of an Opposition, which only seems to be united.
\nAfter the Bihar results, in a note, Japanese investment bank Nomura said, \u201cThe fact remains that with or without a Bihar victory, the NDA\u00a0would have had to accelerate its efforts to build consensus with some of the smaller Opposition parties to progress on its legislative reform agenda \u2014 the Bihar elections makes this even more critical.\u201d Such analyses present the Bihar verdict as a possible turning point for the Modi government in a positive manner.
\nThird, the BJP, as it did with land acquisition, will explore other ways to introduce policy changes rather than try to pass Bills in Parliament. There are a number of reforms that require executive decisions, or the states can be asked to introduce them. A few experts feel that even portions of GST\u00a0can be put in place through the executive or the friendly states. Therefore, the reforms process may not lose momentum; only the manner in which policy interventions are made may see some change. This will require the Centre to work closely with the states, which is a sign of a mature democracy.
\nFourth, economic reforms are not about a centralised and top-down approach. The UPA-2 tried the same during its past two years of governance, when it set up the Projects Monitoring Group in the Prime Minister\u2019s Office (PMO) to hasten the progress of mega projects. It failed since such projects require clearances at the levels of the state, district and local bodies. Modi tried the same, when the PMO began to dictate what the states should do to help the business community. This needed to change, and after the Bihar elections, the chances are higher.
\nFinally, reforms are about growth, and growth is not just about the manufacturing sector. Over the past 18 months, Modi has focussed largely on manufacturing, which was epitomised by his ambitious \u2018Make in India\u2019<\/em> campaign. But, as several states like Bihar have shown, one can achieve consistently high growth rates by incentivising other sectors. In Bihar, for instance, the push for growth and employment came from sectors like construction, real estate, trade and financial services. The same can happen in several other states \u2013 and nationally.
\nClearly, the future of reforms and growth will not be decided by the Bihar results. Nor will it be greatly influenced by what happens in other Assembly polls over the next two years. It will be the product of a changed political economy. It will be dictated by the manner in which the BJP\u00a0retains its political and ideological positions minus the aggression, but works with other parties to evolve an economic consensus. Most important, the agenda will gain from a realisation that this is not the time for new policies only, but a time to do things and then showcase them.
\nTo achieve this aim, Modi needs to re-strategise and rethink. He needs to jettison his ambitious streak to prove that the \u2018Gujarat Model\u2019 can work at the national level. Instead, he has to tweak the model to make it work in every state. Only then will he realise that the sum is greater than its parts. He has another 42 months to go, which is enough. But can he change his politics to achieve his economic goals? It is a $2 trillion question.
\neditor@tehelka.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The BJP can negate the Bihar effect on growth, but only if it manages to keep its politics from scuttling its economics<\/p>\n","protected":false},"author":78,"featured_media":258863,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[56],"tags":[1856,9215,2879,9426,3803,453,1770,394,9271,579,96,9389,6539],"_links":{"self":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/258858"}],"collection":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/users\/78"}],"replies":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/comments?post=258858"}],"version-history":[{"count":0,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/258858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/"}],"wp:attachment":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/media?parent=258858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/categories?post=258858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/tags?post=258858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}