Two out of Modi’s three biggest initiatives have been inconclusive. How will GST fare?

From a purely political point of view, Prime Minister Narendra Modi continues to be incredibly successful. Three years after he led the Bharatiya Janata Party to a massive Lok Sabha victory, the biggest in three decades, Modi remains immensely popular. The BJP’s stunning success in Uttar Pradesh Assembly elections earlier this year is testament to this. Aside from a couple of let downs in Delhi and Bihar, Modi’s BJP is cruising and will be in pole position to be re-elected in 2019. On the policy front, however, the story is much more mixed.

The 2014 verdict gave Modi a Lok Sabha majority, allowing him to attempt legislative moves that few others might have even considered over a period of 30 years. Yet the government immediately indicated that it was unwilling to make the effort to push legislation through the Rajya Sabha, choosing instead to go the ordinance route for its ambitious attempt to reform the Land Acquisition Act. The BJP government ultimately had to drop that move in the face of vociferous public and political opposition. Though that battle is mostly forgotten now, it set the tone for how the new government would operate.

Undermined institutions

Ever since, the BJP has chosen to give short shrift to Parliamentary protocol, pushing the boundaries of what can credibly be called a money bill – a type of legislation connected to taxation that does not need to be approved by the Rajya Sabha, where Modi’s alliance is still a minority. Instead, the party has attempted to use its brute force in the Lok Sabha while also continuing to take the executive route as often as possible.

In addition to antagonising the Rajya Sabha, it has picked fights with the judiciary, made a political appointment in the Army, undermined the authority of the Reserve Bank of India governor, attempted to boss around chief ministers of states and, most recently, proven itself willing to flout basic human rights and international law. And all of that is without mentioning the dangerous cultural game the party is playing in attempting to polarise the Indian public, most recently by appointing riot-accused Adityanath as chief minister of Uttar Pradesh.

Even its most prized claim, that Modi has not been seriously accused of corruption, could fall apart if an investigation is carried out into the Birla-Sahara papers (though that now seems unlikely primarily because of the undermining of other institutions).

Mixed report card

What of its schemes? Make in India has led to very little. The Swachh Bharat Abhiyan does not seem to be going very far. We rarely hear about the Smart Cities projects these days, in part because they were always going to be smart municipal wards more than anything else. The big promise of the 2014 campaign – that Modi would deliver jobs for India’s demographic dividend – has been the biggest failure.

There have been some successes. The Jan Dhan Yojana has been massively successful at expanding the financial net. The government has expanded the United Progressive Alliance’s Direct Benefit Transfer programme to cover even more of the country. Electrification and affordable housing is chugging along. There has been substantial investment in infrastructure, and Foreign Direct Investment has increased. In addition, aided by a steep fall in oil prices and a good monsoon last year, India’s finances are in much better shape – with the Non Performing Asset crisis as one large caveat.

Most of these are incremental achievements though. Important, but possibly not substantial enough to run a re-election campaign on. To some extent, this explains the BJP’s hard lurch away from the development rhetoric and willingness to go down the jingoistic, Hindutva road. If it can’t point to policy successes, it might as well attempt to polarise voters.

The big three

But there are three memorable policy initiatives that it is likely to tom-tom, especially because of their direct connect with the public.

1. Surgical strikes, ICJ & Pakistan: For a brief moment, the announcement of surgical strikes looked like it might change everything. After several cross-border attacks on military camps, the government announced in September that it had attacked Pakistani launchpads along the Line of Control. This was supposed to be the firm action that would convince Pakistan to desist from infiltration efforts, allowing India to focus better on a political solution in Kashmir. Instead, the cross-border militancy has continued, and matters have become truly dire in the Kashmir valley.
   The government has attempted to shoot from the shoulders of the armed forces, using friendly media outlets to whip up a jingoistic mood across India, but it has failed to show any sense of a larger political strategy that can convert those emotions into genuine progress. The most recent success at the International Court of Justice, which ordered Pakistan not to sentence an Indian whom Islamabad accuses of espionage, is emblematic of this. It is an important, short-term success that looks good on TV, but has little bearing on the long game.
2. Demonetisation and black money: Concerned that its promises of bringing back huge amounts of black money and giving each Indian Rs 15 lakh was turning into a bitter joke among the people, Narendra Modi announced on November 8 that India was withdrawing all Rs 500 and Rs 1,000 notes. The scheme, which involved sucking out 86% of India’s currency overnight and replacing it with new notes, was a disaster in its implementation. It led to numerous deaths, an economic crunch and downstream impacts that are yet to be fully evident.
   The move was a huge political gamble, and one that turned out to be successful, if the UP results are anything to go by. But policy-wise, the jury is still out. The government has refused to explain why it took such a drastic measure, one which no major successful economy had ever taken before, and it has been reluctant to put out transparent data on what demonetisation has achieved. Fanciful claims of a large dividend that would accrue to the government have disappeared, and ministers now resort to insisting that the effort did not ruin the economy. Meanwhile, the Rs 15 lakh promise is still hanging fire.
3. Goods & Services Tax: The passage of a Constitutional Amendment that would allow for a GST is easily the most impressive legislative achievement of the BJP government so far. Though the policy itself has been in the works for nearly two decades now, the government had to ensure it was passed not just in both houses of Parliament but also in more than half the states. And even after that, most of the decisions on how GST would actually work depended on bargaining within the GST Council, a forum that includes all the states and the Centre. As a policy move, GST is without doubt the biggest achievement of the Modi government, one that fundamentally reshapes the Indian Union.
   
   But the policy has yet to be turned into reality. How GST actually ends up being implemented over the next few months will tell us much about this government, and whether it has truly understood the difficulty of governing India, especially in the aftermath of the botched demonetisation rollout. GST may not have happened overnight like that policy, but it has been rushed, presumably to avoid any mess spilling over into the run-up to the 2019 elections. Any major hiccups here, or ensuing inflation as a result of the measure, could dictate whether the party rolls into 2019 expecting to be re-elected.