Sunday, September 15, 2019

A Fortnight in India: What I learned about Modi's India From India-Today, Economic Times and Sun T.V.

Whenever I visit any country I make it a habit to check local press and publications. I did so in India too, naturally. Just one issue of the weekly news magazine 'India Today' was sufficient to encapsulate the state of Modi's India. Thanks to my several hotel stays and the freely supplied 'Economic Times' I got a ringside view of Indian economy especially when the newly minted Nirmala Sitaraman was rolling out changes. Then a few days of watching Sun T.V. gave me the hope that one day BJP may actually romp home as a ruling party in Tamil Nadu or at least as a major ally to the ruling party. Here's what I learned.

India Today


I started reading India-Today back in the late 80s, during Rajiv Gandhi's administration, when it was a fortnightly sold at Rs 6. 'Frontline' from 'The Hindu' followed soon after. While Frontline hewed a left wing tilt India-Today tilted to the right. Prabhu Chawla and Swapan Dasgupta from India-Today are now effectively BJP's cheer leaders along with the likes of Indian Express's Tavleen Singh. Arun Shourie is disenchanted with Modi after being a member of the Vajpayee cabinet. All these journalists were united in their disdain and hatred of the Congress regimes. To be fair Rajiv and Congress did do their share to alienate the press. Aroon Purie, editor of India-Today, was a Doon school classmate of Rajiv. With this backdrop the issue dated August 12th 2019 with a cover story "Unsold" about the economic crises affecting the auto-sector was interesting to me for not just the cover story but several other articles and I think the stories offer a snapshot of Modi's India. I'll provide excerpts from key articles. All excerpts are within quotes and anything without a quote is my opinion or information or paraphrasing.



Mutilating Right to Information Act


"India's Right to Information Act, recognized the world over as one of the most robust sunshine laws, has been mutilated". RTI, as the act is popularly known, was passed by Manmohan Singh's government in 2005, following several anti-corruption protest movements led by Anna Hazare that whipped up the middle class mostly. Those protests were key in promoting the idea that the Singh administration was mired in corruption. Yet, it was Singh who created this law that is now undone by the seemingly cleaner administration of Narendra Modi.

India-Today's article summed up not just the dangers of mutilating the act but more importantly how the government used its brute majority. "In the Lok Sabha, the NDA simply used its brute majority to ride roughshod over the objections raised by opposition benches. But in the Rajya Sabha, even though 15 political parties reportedly signed a motion to have the bill referred to a select committee, many backtracked on their demand during voting, fueling apprehensions about the pressure that was exerted by the ruling dispensation".

Drawing a distinction between Donald Trump and Narendra Modi the British weekly The Economist said that unlike Trump who wishes he can use the tax agencies to stifle opposition Modi actually can accomplish it. That is the pressure that India-Today is alluding to.

The Immigration Bogey


Modi and Amit Shah, like Trump, find it useful to stoke the problem of illegal immigration. The US, unlike India, at least, has a problem of real proportions. "Shah's threat", a story in the issue outlines, "to extend the National Register of Citizens from North Eastern states to the rest of the country doesn't square with the census data, which finds immigration rates to be below 0.5 percent in the majority of districts. Besides, many of these immigrants are of Indian origin who have returned from US, UK, Canada, Australia and the Gulf. The census figures belie the government's concern about illegal immigrants, even accounting for the under-reporting of 'illegals'.

Yatras and their costs


The hundreds of crores once spent by Indian government to subsidize the Haj pilgrimage was an irritant for the BJP foot soldier notwithstanding the fact that that subsidy was more to keep the state airline, the only approved carrier, afloat. That subsidy is now gone and there were no riots when it was withdrawn.

Nearly 301,000 pilgrims undertook the Amaranth eater this year costing the "J&K administration Rs 495.2 crores ($72 million)" and a deployment of "40,000 security personnel".



Aaya-Ram & Gaya-Ram


Party hopping politician Gaya Lal was pejoratively referred as "Aaya Ram, Gaya Ram". During the 2019 parliamentary elections Modi openly spoke of opposition party big-wigs waiting to cross over to BJP. While party hopping is not new to India that a PM would stoop to openly declare it at a rally was a new low even by the standards of Indian politics.

The title and subtitle of a story says it all. "A bitter aftertaste: After a spate of inductions of TMC leaders with a dubious past, the BJP is forced to rethink".

"Death of the Opposition"

A letter to the Vice President Venkiah Naidu, also the chairman of Rajya Sabha, signed by 17 opposition statement makes a startling factual accusation that is scary for anyone interested in the health of democracy and democratic norms. "The letter says 60 percent of the bills in the 14th Lok Sabha were referred to parliamentary committees. In the next one, 71 percent of the bills went to such committees. But in the 16th Lok Sabha, when Narendra Modi-led government came to power first, the figure dropped drastically to 26 percent. Now, in the first session of the 17th Lok Sabha, 14 bills have been passed, but not a single one was sent to a house committee". The article blames the opposition party leadership for foisting family candidates to leadership. These leaders, unlike those who stood up to Indira Gandhi, rarely carry a political weight and are not up to the task.

The Auto-Sector Slowdown


Aroon Purie's editorial warned on the issue's first page, "Our government cannot afford to let this sector slide, with the prospect of massive layoffs, adding to the ranks of the unemployed. This has implications that go far beyond economics, it may even lead to social unrest".

India's auto-sector, valued at Rs 8.3 lakh crores, employs, directly or indirectly, 32 million people. "Ram Venkatramani, president of Automotive Component Manufacturers Association (ACMA), said that if improvements do not materialize, around 1 million jobs could be lost - 20 per cent of the total employment in that sector". "Overall sales" of vehicles has "fallen by almost 8 per cent". "The growth rates for both private and commercial vehicle sales are in the red".

Rahul Bajaj, chairman of Bjaj Auto, was blunt, "there is no demand and no private investment - so where will growth come from? It doesn't fall from the heavens". This kind of blunt language is startling in the Modi era especially when it comes from a leader of a much respected Indian brand.

"Demonetisation", V.G. Ramakrishnan, "managing director of of Avanteum advisors" said, "left a mark on the psyche of consumers". A key factor behind the slowdown is that the Indian consumer is putting off purchase of even fast-moving consumable goods (FMCG), a key indicator of slowing down of purchasing power. Liquidity crises and lack of good credit reporting are affecting loans. Added to all that is the whimsical attitude in rolling out regulations. The Bharat Stage VI (BS-VI) regulations, new axle load norms, governmental push for increased use of electric vehicles have all contributed in pushing to the auto-sector to despair. Venkatramani told India-Today, "Changes are welcome, but what put us in a tizzy is the speed at which regulations are changing. It becomes difficult to predict when to invest and in what technology".



All the above paint a grim picture and raise a sharp question of an administration that it's supporters assiduously promote as the most business friendly government. For all the mocking of Nehruvian era of socialism Modi's finance minister is turning to that lethal arsenal of any government facing an economic crises, increasing government spending to boost consumer spending. The prohibition of government departments from purchasing new cars has been lifted and it appears that the government is all set to become the biggest consumer of the auto-sector. This is textbook socialism.

The Economic Times


Issues dated 20th August and 31st August of The Economic Times provided interesting perspectives. The front page on 20th August carried a warning from R.C. Bhargava that without government incentives the auto-sector may continue to suffer. Curiously the title used an American word, Motown, to denote India's auto sector.

In a similar vein another sector cried out for government help. "India's software export industry may lose out on its competitive edge due to falling incentives and rising tax rates, industry executives said and have asked the government to extend the policy benefits under the Special Economic Zones (SEZ) beyond April 2020; reduce corporate taxes for large companies and review the buyback tax introduced in the budget".



Continuing the trend of petitioning the government for relief from regulation or seeking help the nascent peer-to-peer lending firms have asked the government to relax the lender limit of Rs 10 lakh and allowing High Net Worth Individuals (HNI) to use the platforms.

Nishanth Vasudevan, head of Motilal Oswald Financial Services, had more warnings in an interview. The foreign investors, Vasudevan said, "feels letdown by the way they're treated" compared to China. Asked about current slowdown he said, "the correction which you're seeing is the actual decline in consumer spending". "Google search for a lot of durables is down by 15-20%". He also added that this is driven more by sentiment and that businesses may not be doing too bad and the expected tax receipts data would provide clarity. He did concede that the economy was growing only at 5.8%.

The editorial column calling for concerted policy action and urgent reforms blamed structural woes like subsidies. "India's share of global exports", the editorial said, "is just 1.7%". Essentially on the map of world trade India is less than a blip. Forget about being super power India is not even a power to reckon with at the global trade map.

On August 30th with executive fiat the finance minister announced the merger of "Ten PSBs into Four" (per The Economic Times headline on 31st). In one fell swoop India created four really mega banks. This runs completely counter to the US wariness of big banks and the desire in US policy making circles to breaking up big banks. US banking regulations, called Dodd-Frank regulations, promulgated after the financial crises of 2008 that almost destroyed the world's greatest economy agonizes in great detail about how to methodically unwind a too-big-to-fail financial institution. Indian journalism often leaves much to be desired and is more often just clerical writing and on this epochal event the reportage was pathetic.

The finance minister claimed that the criteria for the pairings of specific banks was driven by "tech-integration" capabilities rather than "geographical capability". Such rationale is unheard of and really no tech study was proffered. "Managing directors of these banks were informed of the merger decision earlier in the day by the the department of financial services even though discussions had been going on for some time". The reportage did not say at what organization levels discussions were held and what "going on for some time" meant. The managing directors presiding over hundreds of crores of depositor cash were informed like they were peons.

The editorial page of ET cheered the move saying it is in line with making India a $5 Trillion economy but cautioned on the lack of "supportive regulation". With the US crises serving as a caution a responsible newspaper, let alone one focused on economics, should have screamed first about the lack of regulation prior to such a move and scream about possible financial crises that could cripple the Indian economy. Note, India's economy if it faces a US style crises lacks many of the abilities that were at the disposal of US economy. Till date the government has shown absolutely no inclination to create a Dodd-Frank equivalent.

The issue dated August 31st announced the bank mergers on front page and along side carried dismal statistics on the economy with an equally prominent headline as the one for the merger news, "Meter Down: At 5%, Economic Growth at 6 yr Low in June Qtr. The editorial summary is grim: Manufacturing, around 16% of India's economy, collapsed totally: from growing more than 12% in Q1 of last year, to stalling at 0.6% now", "car sales have crashed to 20-year lows","Household consumption has also fallen","Mining, metals, minerals and so on are in a downward spiral", "Capacity utilization of companies below 80%". The editorial said that the only silver lining, if one looked for it, is that the "government is clearly not trying to hide the bad economic news". If that's the silver lining only god can save Indian economy.

State of Education


A recent ranking of universities worldwide showed that not one of India's coveted institutions have cracked the ranking above 300. Forget about cracking the top 10 or 50 or 100. A.M. Nik, chairman of Larsen and Toubro and head of National Skills Development Corporation in an interview with ET sounded beyond pessimistic.

Asked about Normal Sitaraman's call to foreign students to study in India Naik was dismissive saying, "problem is everybody is going out of the country and nobody is coming in. India has a few good educational institutions but they require a very high cut off which a lot of people can't get. We don't have good teachers and the education system itself has been watered down in line with the no-fail policy". "Finding the right teaching talent is the biggest problem. We need institutions to train teachers".

While Naik laments the very absence of good teaching the government thinks, per an article in ET on 20th August about the LEAP program, that lack of leadership skills amongst event good academicians is hurting India from making it big on global rankings. "Over the last 5 years 11 of the 40 central universities have seen inquiries, show cause notices and even sackings of vice-chancellors". Let that sink in for a moment. Nearly one-fourth of central universities are run by no good vice chancellors.



LEAP (Leadership for Academicians Program) started in 2018 with 269 has managed to identify 46 high-scorers, whatever that means, for leadership role. Again, think on that for a moment. In a country of a billion people a leadership program has found 46 'high-scorers'. Only god can save Indian education.

Institutional Corruption, Religious India and a Titular Prime Minister


When former finance minister P. Chidambaram was arrested BJP supporters openly celebrated it as engineered by Amit Shah, the home minister. This was supposed to be tit for tat for Amit Shah being arrested and exiled from his home state when Chidambaram was home minister. In Indian politics, the rule of law be damned, what is important is that your side gets tit-for-tat. On August 20th ET reported that two top ranking officials in National Investigating Agency were under investigation for blackmailing a business man in return for not falsely including his name in a terror-finance related case. The use of central agencies, particularly tax related and intelligence agencies, as puppets to settle political scores is now openly cheered by partisan supporters.

Nilanjan Mukhopadhyay in an oped in ET dated 31st August wrote, "if not in word, then in sprit, what is being increasingly endorsed is the notion that if democracy is a collateral damage while strengthening the nation, so be it".

What is emboldening Modi? How did he muster this majority? Why is secularism almost dead in India today? Why is the notion of keeping religion private would never have a chance in India? Was secularism, as defined by modern liberalism, ever a reality in India? To find those answers let us turn briefly to statistics of India's tourism.

For all the wonderful heritage stretching back into more than a millennia and the country being populated by places of history and natural beauty India's place in world tourism, like it's place on world trade, is pathetic. While France and Spain lead the US with 89 and 83 million tourist visitors compared to 80 million for US when it comes to dollar value the US earns $214 billion compared to $67 million and $74 million respectively for France and Spain. India gets 17 million tourists and earns $29 million. B.K. Goswami, former Director General of tourism for Government of India, in a letter to ET points out that 90% of Indian tourism is domestic tourism and of that 80% is related to pilgrim tourism.



Indians are religious to an extent that is not seen in the Western world and they flaunt it. Nothing intrinsically wrong with that but that is a key factor in the rise of Narendra Modi. Turn on Tamil Nadu's cable TV channels, even the one run by the state's principal political party that pays lip service to secularism and atheism, one is drowned in religious propaganda. All channels run some form astrology related programs in the morning. The obnoxious serials freely load the stories with religious, mostly Hindu, themes or references. Thanks to Sun T.V. and the religious programs it is running it is possible that the BJP might actually become a significant player in the state or even possibly a ruling party in its own right.

Now, many may laugh at the prospect of BJP becoming a major party in Tamil Nadu but my tour made me think that. As I said in my last blog I'll turn, in my next and last blog on the tour, to the religious fervor that is gripping the state and the reasons, in my opinion, as to why Narendra Modi, despite such dismal economy, romped home with a brute majority in the parliamentary elections.

One thing is clear though, if anyone suggests even remotely that they support Modi only for economic governance or mostly for that reason and if they are still sticking with that reason they owe an answer to those who think it is hogwash.

1 comment:

parvati shastri said...

Very well written! Very few evenndarevto write. Kudos!