Guest Column: Modinomics: It'll be 'Swadeshi', China style
Big infrastructure projects, PSU-led manufacturing, indigenous defense production, among others are on the horizon once Modi is PM, says Rajeev Dubey, Executive Editor, Businessworld
Spare a thought for the expectations from NarendraModi as the next Prime Minister of India.The man on the street wants him to be the breath of fresh air that the UPA II wasn’t. The industry wants him to be a decisive leader that Manmohan Singh wasn’t. Stock market wants him to allow free flow of foreign investment that slowdown didn’t. Small traders want him to reverse FDI in retail while MNCs want him to stabilise the policy flip-flop,and so on… However unreasonable they may be, the new PM will surely have to go through this trial by fire.
But the big difference that a Modi government can make is also what made Gujarat stand out from among the states in modern India. Modi’s rule in Gujarat that coincidentally overlapped with UPA’s 10 year rule over India was spectacular neither because of policies, nor the intention. It was because of the execution—or, the lack of it in the case of UPA.
Even though the BJP manifesto for Lok Sabha 2014 mentions no specificroadmap to revive the economy, Gujarat’s own economic model has enough cues about the likely economic policies. AModigovernment at the Centre will sorely disappoint the proponents of open and free markets. Instead, expect him to invoke economic nationalism and nationalistic economic agenda. After all, Modi’s Gujarat is also a proponent of the Nehruvianmodel of self-dependence and self-reliance that the Indian National Congress dumped so dismissively more than 25 years ago.Hence, aModi-led NDA will be ‘Swadeshi’ of the kind China stands for.
If Modi’s talk in the run-up to the elections is anything to go by, he will foster nationalism of the “Aapnu Gujarat” kind that only Gujaratis and Amdavadis can vouch for. There are several pockets where this is ripe for exploitation. For instance, India’s defense forces’ self-esteem is at an all-time low with repeated and brutal attacks on the border. Their battle preparedness suffers from massive delays in procurement of modern equipment. And the dream of indigenous defense production continues to remain—a dream.
If former BJP prime minister Atal Bihari Vajpayee invoked nationalism and India’s right to think and act independently rather explosively with the nuclear tests, expect Modito thump his (figuratively speaking) “56-inch chest” with achievements in space technology. At least initially, until other efforts begin to bear fruit. Space technology has always been that frontier of science where nation-states have vied for superiority. India already has a traditional advantage of having pursued its ambitions relentlessly. An NDA regime will surely channel more resources into national science & technology and space research laboratories.
Next, expect Modi to stir up national pride through big-bang infrastructure projects: high speed railway and road corridors; inter-linking of major rivers; nationwide hi-speed broadband networks. His key focus in infrastructure will be on making India power surplus. It’s an achievement in Gujarat that he often talks about.
Denouncing things ‘Indian’ is well ingrained in several of us. Its origin is rooted in over 200 years of British rule when those who wanted to endear themselves to the erstwhile rulers of India looked down upon the rest of the Indians, Indian ethnic wear, food, even culture. And it carried on down the generations…decades after the British left. Many Indians consider the expression of their dislike in public inversely proportional to what they consider a superior status in society. I have friends who smirk at the thought of voting. They consider themselves ‘international citizens’. It’s below their dignity to vote in Indian elections.They vehemently express their dislike about cows on the roads but won’t think twice before availing the subsidisedLPG gas connection.Modi’s policies will be a blow to that ideology.
At the heart of Nehruvian 5-year plans was PSU-led manufacturing with the objective of achieving self-reliance. Gujarat has proved how to turn around and run successful PSUs. Today, at least five Gujarat PSUs are among the world’s 500 largest corporations: Gujarat State Fertilizers & Chemicals, Gujarat State Petroleum Corporation, Gujarat Narmada Valley Fertilizers Company, Gujarat Alkalies& Chemicals Limited and Gujarat Mineral Development Corporation. Expect this model to be replicated at the Centre.
So, take heart from this Air India, BSNL, Coal India and others! You will not be sold out. Instead, PSU leaders can expect a free hand at running their corporations, greater infusion of funds into deserving PSUs and significant backing from the Centre. The heavy industries ministry will be key in the Modi portfolio.
A corollary to self-dependence and self-reliance will be an unprecedented push to indigenous defense production for which several large corporate houses such as the Tata group, the Godrej group and the Mahindra group had begun setting up manufacturing facilities five years ago.
Meanwhile, a senior colleague recently picked up a theory doing the rounds,that the biggest casualty of a Modi-led NDA regime will be social sector reforms populated by Congress-led UPA governments as MGNREGA, food-for-all, education-for-all, health-for-all, and now insurance-for-all. That these populist schemes may get subsumed in the great infrastructure push is a real threat. But if Modi has to watch out for a Congress rebound on the back of these schemes, he should rather not tamper with the social sector.
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