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Narendra Modi: from rhetoric to action

LiveMint logoLiveMint 15-06-2014 Livemint

It will be one month this week since Narendra Modirode to power in New Delhi on the back of a massive popularity wave. The new prime minister has got off to a good start. He has reached out to political opponents. He has selected a relatively small cabinet though it is low on administrative experience (not to mention loose cannons such as V.K. Singh). He has reassured senior bureaucrats that they will get his support when they take decisions. He did well to invite leaders from neighbouring countries on the day he was sworn in as head of government. His stamp was evident in the presidential address to Parliament that struck all the correct notes, right down to the alliterative catchwords that Modi so likes. His first address to Parliament was impressive in its clarity.

All these are signals of a new beginning, but the real test of leadership will begin when Modi begins to switch from rhetoric to action. He has two distinct advantages over his predecessor. One, Modi has political capital to use because he has got the top job after he led his party to electoral victory rather than being appointed by the party leader. Two, Modi will not be constrained by coalition partners who are often more interested in making money or securing their local bases rather than running the nation. These two advantages also mean that the prime minister will be held to higher standards in the coming months because he does not face the constraints Manmohan Singh did.

In his weekend speech in Goa, Modi said that he is ready to sacrifice his personal popularity to take the sort of tough decisions that India now needs. The new government has taken charge of a country that has struggled with sluggish growth, high inflation, corruption scandals and policy paralysis.

Modi will have to make hard choices. For example, will he continue to tolerate low economic growth till inflation is brought to heel or will he go in for a hasty stimulus? How will he assuage some of the genuine fears of local communities in the necessary thrust to get large industrial projects back on track? How will the ambitious infrastructure projects be funded without added pressure on public finances? Will electricity be subsidized to protect the purchasing power of the vocal middle class or will tariffs be hiked to attract private investment? What about gas prices? How will he deal with the woes of farmers in case agricultural output takes a hit because of a weak monsoon? How will he reach out to both China and Japan at a time when relations between the two Asian giants have deteriorated?

Modi will need to bring together his political acumen, administrative talents and communication skills in the months ahead. This newspaper has earlier argued that Modi can take some immediate administrative decisions such as release of around 20 million tonnes on grain stocks to bring down food prices. The coming budget will provide clues about how serious the new government is about economic reforms that will create the conditions for sustained high growth. But perhaps the longest game will be to change the institutional matrix—from administrative reforms to rethinking federal relations to a transparent method of pricing natural resources to crafting a new social contract between citizens and the state.

It is these concrete policy initiatives, with quite different time schedules, that will eventually provide the parameters to judge Modi as a national leader. His opening statements suggest that he is aware of the depth of the challenges he faces. His personal popularity is a massive advantage but it should also be remembered that the natural corollary to this popularity is the burden of high expectations. Like Barack Obamasoon after his victory in the 2008 US presidential elections, his supporters expect Modi to do everything short of walking on water while his detractors just cannot wait to see him fail.

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