PM Modi kept a tight grip on power and public relations, but the economy slipped his grasp, and now, the 2019 polls could follow suit
Modi had the chance when he came in to use the blessing of lower crude oil prices and low inflation to clean up the banking sector and get stalled projects moving
I finished writing a 50,000-word book about the Indian economy this weekend. It was an exhausting two-and-a-half weeks, where I woke up early and started researching and writing and rewriting. It was eye-opening. I was: impressed by how the Internet has changed one's interaction with the government; more suspicious of economists than before; frustrated that Prime Minister Narendra Modi had, despite the advantages of the 2014 mandate, squandered the opportunity to put the economy on a double-digit growth path; and baffled that one of our worst finance ministers, Arun Jaitley, is back in the saddle.
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I enjoy writing. When you've got the flow, then a universe opens out to you. You give the world inside a book its structure. You have many words to choose from, and your mood or your innate nastiness can calibrate which you will choose. While I worked on this book, a prominent Mumbai media personality contacted me to write a piece for his book, a collection about 25 eminent Indian achievers. I devoted five-six days to that piece, about my old friend, the former spy chief, and then returned to the economy. That break to work on a completely different kind of piece refreshed my thinking and gave me new ideas to incorporate in the book. The creative process has no formula, but it undoubtedly beats life in an office.
The research and learning were tough. I taught myself about Indian agriculture - the sowing seasons, the market infrastructure, the absurd trade policy, the scam that is crop insurance, the truth of how only some states are well irrigated, etc. The toughest was reading a 135-page report, on the ministry of agriculture's website, of the Ashok Dalwai's committee on doubling farmers' income. Even for a voracious reader like me, it is the kind of reading that puts you to sleep, every other page.
I devoted much time to the ministry of statistics and programme implementation's website (it was in the news recently when it posted the "back series" of GDP; Modi rejigged the GDP calculations to make his GDP performance look good, but then Manmohan Singh's ended up looking far better). There are a lot of statistics, and a lot of scope for mischief, lies and propaganda. Tragically, most Indians do not study government statistics or reports; it reinforces the suspicion that most Indians are unfamiliar with the internet, despite the growing penetration of mobile phones.
If they did, it would be clear how poor Modi's economic management has been. He floods the airwaves and the pliant print media with untruths about what he has accomplished, but no matter how you rejig the numbers, there are all sorts of intertwined economic signals that show you the real picture: non-existent private expenditure, non-performing assets in the power sector, the lack of employment generation (to hide the non-jobs, Modi has shut down the labour bureau's quarterly statistics, and relies on the Employees Provident Fund Organisation statistics, which show formalisation of jobs, not creation of jobs), etc.
It's a tragic shame. Modi had the chance when he came in to use the blessing of lower crude oil prices and low inflation to clean up the banking sector and get all the stalled projects moving. He could have boosted the construction sector - which absorbs surplus labour from agriculture - and he could have pushed disinvestment.
Instead, on the advice of voodoo economists, he demonetised high-value currency in November 2016, which achieved none of the shifting goals he himself set. Instead, it stopped the construction sector, and demolished exports from small and medium enterprises.
What is most baffling is why a dud like Jaitley has been allowed back in North Block. The only worthwhile thing done by his ministry during his time was the Goods and Services Tax, which in any case was former Finance Commission chairman Vijay Kelkar's idea that was hammered out in the NDA-1 and UPA years; when finally implemented, it was so sloppy that no businessman has praised him for it. Jaitley is a gossip-monger more interested in his portfolio of the ministry of corporate affairs. He retained disinvestment and, more often than not, defence, merely to further the impression of his indispensability to Modi. His attempts to undermine Piyush Goyal are best-known to Goyal himself.
Possibly Jaitley is back because he does not really run the finance ministry - it is run by Modi himself, through his bureaucrat from his Gujarat days, Hasmukh Adhia. Which was another lesson I learnt from the book - a vast and diverse country like India, which follows the parliamentary form of democracy, cannot be run single-handedly, no matter how much some privileged and ahistorical middle-class boys want a strongman to "fix things". The proof is in the economic mismanagement since 2014, and the verdict will not be long in coming.
Aditya Sinha's latest book, The Spy Chronicles: RAW, ISI and the Illusion of Peace, co-written with AS Dulat and Asad Durrani, is available now. He tweets @autumnshade Send your feedback to mailbag@mid-day.com
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