One of the great advantages India has is that there is a tendency towards ideological convergence. Ideologies of various political parties are similar and are becoming more so, even though this may not be obvious because of short-term electoral rhetoric. This is not true in the case of other large democracies such as the US, where the median Republican view is drifting apart from the median Democratic view, with less overlap than a decade before.

As Prime Minister Narendra Modi said during his visit last weekend to Kolkata, “Political interests can’t be bigger than national interest. In my Team India, there are 30 pillars, or 30 states.” This gives us a somewhat unique leverage to effect change. As a corollary, in spite of the urgency individual issues such as the land Bill tend to create, leaders will do better to invest energy and skill to carry differing views forward rather than go for an aggressive push.

The debate in India is between right-of-centre and left-of-centre mindsets, not the extreme left-right clashes that some other countries see, as the recent British election results exhibit. Immanuel Kant’s “starting position” unconsciously shapes individual views. The best social contract is determined less by an intellectual appreciation of all possible options, and more by what seems workable for us and the immediate group around us.

Notwithstanding these multitude values and aspirations, the verdict of India is that it prefers effectiveness over any intense left-right debate, which itself now occupies a narrower spectrum. Because the electorate rewards effectiveness over ideology, both anti-incumbency as well as the proportion of first time MPs in India are much higher here than in the US or Europe, making India more politically dynamic.

Ironically, a triumph of democracy may be the bane of good governance. The rise of the regional parties is adirect consequence of social change and a deeper political involvement of the masses. Yet, most regional parties are directly or indirectly extortionist, often short term-oriented and less likely to provide efficient government. In addition, at the national level, they fragment votes and cause unstable coalitions. As the regional parties mature, hopefully, they will become more effective.

The economic cycle, which had started looking up in the last days of the UPA regime, seems to have stalled in the last two quarters. The mix of headwinds — monsoon vulnerability, down cycle in commodity prices, corporate overleverage and weak balance sheet of banks — and tailwinds — low oil price, India standing out in an otherwise dismal picture for emerging markets, rupee stability — seem to be negating each other. A decisive government stimulus could help put India in the high-growth orbit once again. In terms of economic growth, we are fighting below our weight. We need to put the ‘fight’ back in India.

The trend towards ‘normalisation’ is what we all need to watch out for. The BJP needs to ensure that because of incumbency, complacency and vested interests, it won’t start looking like the ‘Congress minus scams’. The BJP will, hopefully, control these as the Ottoman rulers did by institutional innovations and the US does with checks and balances.

To simplify, among the tools available to a government to ensure their own continuity by winning successive elections, performance takes the top spot. However, delivering results in discrete five-year intervals is not a given. This is made complicated by staggered state elections that act as an informal referendum.

So, to get reelected, governments rely on populism, defined not as genuine poverty alleviation measures, but politically-motivated giveaways — rational from a political party’s perspective, but inefficient from society’s. This is the age-old agency problem. Worse, it remains unclear what the payoffs from such individual measures might be. Therefore, governments go a step further and indulge in patronage, supporting a narrow interest group with an expectation of tangible payoffs.

Whether people admit it or not, these tools are used all over the world. The degree of use defines the quality of government. Previous regimes have relied on patronage, populism and performance, unfortunately, in that order. This government will hopefully reverse that.

Gaurav Dalmia
The writer is Director, Dalmia Group
(Courtesy: The Economic Times)

Latest News from India News Desk