How Vikaspurush Modi is losing the plot

Away from the clamour of electoral sloganeering, Prime Minister Narendra Modi is losing the plot on governance. Congress, during its long tenure, had been craving for meaningful coordination with states, but the BJP got it effortlessly right at the beginning. It is after a decade-long haul that the ruling dispensation at the Centre finally has 13 state governments run by the same party or coalition. Modi has got the best team even on the reckoning of reforms and development strategies. However, with a multiplicity of bans and rampant populism the BJP-ruled states are now at the forefront of derailing the discourse on change and appear to be weak links in Modi’s development chain.

McKinsey recently estimated the capabilities of Indian states, considering their previous growth and existing potential. The global consulting firm reported that twelve states of the country (Delhi, Chandigarh, Goa, Puducherry, Gujarat, Haryana, Himachal, Kerala, Punjab, Maharashtra, Tamil Nadu, Uttarakhand) figure in the bracket of fastest growing states and account for 50 per cent of the country’s GDP. If we include the next seven states (Andhra Pradesh, Karnataka, Rajasthan, Chhattisgarh, Jammu & Kashmir, Bengal and Odisha) having a high growth potential, then out of 19 big states, nine are under BJP alliance’s rule, and these account for nearly 40 per cent of India’s GDP. Going further, McKinsey identified 65 urban districts responsible for 40 per cent of the GDP. Among them, a large number of districts are in states run by BJP or its allies.

Ideally, this should be the most favourable set up for development. PM Modi’s ambitious missions should have found a smooth launching pad at least in these states, industrial clusters and urban districts. Yet, these states, over the last 15 months, have done everything they can do to be derailed from the plank of good governance.

In Madhya Pradesh, there is a plethora of scams left unearthed. The Maharashtra government started off with scams and moved on to governance by "bans". In Haryana, the discourse on development has changed into populism and saffronisation. The states have been conspicuous in giving short shrift to the Centre’s development initiatives, but have been quick to pick up Modi’s model of launching massive advertisement campaigns. The outcome of prime minister’s recent meeting with industrialists revealed that efforts to promote ease of doing business are faltering in states. The campaign for making a single-window and hassle-free system of clearance of business proposals has slowed down. Finance minister Arun Jaitley had to even comment that promoting ease of doing business is still a work in progress. The government had fixed a period of one year to smooth the process of getting clearances while launching Make in India. Now it may take a minimum of three years.

Not only Make in India, the BJP-ruled states did not take the Centre seriously even on opting for amendment to the Agriculture Produce Marketing Act. An amendment to this Act may help create a common agriculture market across the states to contain hoarding and price rise. The states are cold on Digital India too. Similarly, the Adarsh Gram Yojana and the Swachh Bharat Abhiyan failed to get a kickstart with leaders confining themselves to mere photo ops.

Instead of pushing administrative reforms, disinvestment of state PSUs or promoting transparency, states have chosen models that increase government control and float populist schemes. This undermines the expectations of investors and hopes of the young population.

With this year’s budget the Modi government has virtually shifted the responsibility of providing education, health, rural development and urban amenities to states and confined the Centre’s role to just the allocation of funds. Consequently, a great void can be seen over the last 15 months in the vital areas of education, health and food security. The Centre wants to play an indirect role in social services while what the states lack is not resources, but policy-making capabilities. That is why the development and expansion of capacities has slowed down in social infrastructure. BJP leaders also concede that the Centre’s passiveness on education and health will eventually prove to be politically detrimental.

In spite of the fact that a number of major states are warming up for elections (West Bengal, Tamilnadu, UP, Punjab and Assam), there are nearly ten states where governments have got enough time and resources or potential to launch a concerted development and investment drive.

There is no end to electoral politics. The election shows in 2016 will be followed much more keenly than those of 2015. Away from the din of electoral rhetoric, the prime minister will have to fine-tune his governance model to connect states through large and concrete plans. Otherwise, if state governments falter, the strategy for investment, development and employment may crash, irrespective of what happens in Bihar.