Land bill defeat shows that Modi now needs to lead from the front

Narendra Modi’s final retreat on the Land Acquisition Ordinance, announced by the man himself in his monthly radio conversation Mann ki Baat, is a sad commentary on his government’s political acumen.

Retreat on a bill that was so crucial to growth means that the government will now struggle to deliver on its core promise of “sabka saath, sabka vikas”. With crucial state elections now due every year leading upto 2019, one can wonder if this government will ever re-discover its appetite for reforms — even though the options of leaving it all to the states still exists.

It is worth analysing the key reasons for this failure. Without an acknowledgement of political mistakes, no change is possible. And time is running out for Modi. A quarter of his tenure as PM is already over, and if we can assume that the last year will be spent building political momentum before the May 2019 general elections, and more months are lost in playing to the gallery in the critical state of Uttar Pradesh in 2017, it is clear that Modi has less than two years to deliver on difficult reforms.

So what did he do wrong?

First, it is clear he wasted his honeymoon. The land and GST bills should have been negotiated in the first six months of his tenure, when the opposition was still to recover from the May 2014 drubbing he gave them. Only unimportant bills got passed in this period.

Second, in the second six months the opposition recovered as Modi’s Sangh loud-mouths queered the pitch for the government. The Sangh rabble-rousers made it possible for Modi’s divided opposition to unite and halt his most crucial reforms. It is worth recalling that the Land Ordinance was promulgated during this crucial phase last December – just when Modi’s political supremacy was about to be challenged. This left only the budget session window for the government, and three useful bills were passed — on insurance, coal and minerals mining. But after that, the government went into a tailspin over the land and GST bills.

Third, and this is the crucial point, Modi left it to political lightweights like Venkaiah Naidu and Arun Jaitley to talk to the opposition on these bills. This was a strategic mistake. It became easier for the opposition to send them packing, and claim the government did not discuss anything of importance with them. If a bill is so important, you don’t use political lightweights to do your bargaining. Sonia Gandhi used Pranab Mukherjee for her heavy lifting. Modi should have done the same.

Fourth, you cannot win a war by depending on poor generals. As I have repeatedly stated before, the Modi government is not overloaded on talent. While this was partially remedied earlier this year with the induction of Manohar Parrikar in defence and Suresh Prabhu in railways, the most crucial finance ministry remained with the man who has never won an election and who has only a nodding acquaintance with finance. Jaitley has spent most of his political life devising backroom strategy for the BJP and arguing its case in TV studios. His competence in finance was questionable and Modi’s decision in his favour was a mistake he couldn’t have afforded. The most important ministry in his administration went to the man least deserving of it. He might as well have given the ministry to Smriti Irani.

So what are the remedies?

#1: Modi must now lead from the front. Convincing people and political parties of his seriousness on reforms must be done directly from him or his office, and he has to sell the idea of reforms openly to both. If Modi puts his personal prestige on the line and consistently explains why we need a land bill or labour reforms, he can surely get things done - things that the Venkiah Naidus and Jaitleys cannot deliver.

#2: Modi must read the verse from the Gita which says that you must do your duty without expectation of a reward. He must draw on the lessons from Vajpayee’s experience, after the dotcom meltdown and the post-Pokharan sanctions left the economy gasping for growth. Vajpayee then went full tilt for reforms in power, public sector (through disinvestment) and telecom. He lost 2004, but he left an Indian economy in much better shape than how he inherited in. With low inflation, a current account surplus, and a reviving global economy, India had the right internal and external conditions for sustaining growth at a high rate for the next seven years. It needed extraordinary incompetence in the Manmohan Singh government to ruin the party. The same can be said about Narasimha Rao. He sowed so that the country could reap even though his reforms may have cost his party the 1996 elections.

Modi has to do the right things even if they may conceivably affect his re-election prospects him 2019. However, it is by no means certain that history will repeat itself in 2019 as long as Modi is willing to sell the idea of change aggressively. Neither Rao nor Vajpayee did that – and they paid the price. My gut feel is that the country is ready to face the truth this time. It is looking for politicians who will level with them. And even if Modi were to lose, isn’t it better for him to do so fighting for the right causes rather than avoiding battles on the reforms front?

#3: Modi has to start playing the federalism game - and take the issues to the people. Today we have grown to expect the centre to deliver on everything, when in reality power has shifted to the states. As I had said before, the only way to make this clear is for Modi to talk to his own BJP chief ministers and get them to carry out reforms in their states. This will pressure the other parties ruling other states to also willy-nilly embrace reform. If Modi can’t get his own BJP CMs to reform, how can he expect the rest to play ball?

#4: Modi must now recalibrate expectations by outlining areas where the centre can deliver. These areas are defence, diplomacy, railways, and fiscal and monetary policy. In other areas, he can only be an inspiring leader and facilitator. The people of India need to be told — if they don’t already know — the limitations of prime ministerial and central power. This may be difficult for Modi, whose superman image is tough to dismantle, but it is necessary. Modi has to tell the world he can make superhuman efforts, but he is not Superman.

#5: Modi must induct talented people in crucial ministries - especially finance. There is no reason why a Yashwant Sinha can’t be utilised here or even an Arun Shourie. Vajpayee used Shourie to reform telecom when he found Pramod Mahajan and previous incumbents a liability in this ministry. Modi should see talented outsiders like RBI Governor Raghuram Rajan as his allies rather than roadblocks to reform.

The Prime Minister needs to understand two realities: as the most powerful leader in his party, change depends on him. He has to lead the fight from the front and surround himself with competent people, if necessary by looking at talent outside his party. Even the ablest leader needs competent generals to prosecute a successful war.