Indianising India - Narendra Modi's challenges and long-term strategy

Six months have passed since Narendra Modi became the prime minister of India. Many see a Modi wave as being the chief cause for BJP becoming the first party to gain absolute majority at the Centre in over two decades. They also use the ‘wave’ theory to justify the BJP winning most other elections thereafter. 

But there is another reason to explain BJP’s splendid victory. It was ABC -- Anything But Congress.

The need for jobs

Almost 100 million people had been rendered unemployed by the time the Lok Sabha elections had been called -- thanks to five years of absolute stagnation. This figure has been computed on the basis of the fact that at least 12-15 million new faces emerge on the job market each year looking for jobs. With a 2% growth rate in our population which currently stands at 1.2 billion, India should be providing new jobs for 24 million people each year. But considering that some people may not want to work (housewives, children of businessmen, etc) one can safely assume that the number should be around 12-15 million each year. 

Given an average of four people per family, this unemployment number translates into almost 240 million disaffected people. Anyone who could offer them hope, and a promise of a job, was bound to become a messiah. Modi offered them that dream, and fitted that role perfectly. Now he has to deliver. 

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That is why one of his first decisions was to allow Foreign Direct Investments (FDI) into the defence sector. Not permitting it for seven decades was absurd. Vast stretches of the countryside in Bihar and Uttar Pradesh are known to manufacture countrymade guns, even AK-47 clones. And yet, India preferred to import them, rather than upgrade these domestic capabilities. Modi dispensed with this obstacle. 
Modi knew that he had to harness Indian capabilities. In defence. In space sciences. In agricultural universities. Even in building new cities. But he was unabashed about seeking foreign help – for both money and technology.

Make in India

Not surprisingly, the “Make in India” slogan assumes national significance. That is why Modi has focused quite aggressively on promoting ties not only with countries overseas – for both economic and political reasons – but has also begun wooing the Indian diaspora.  

He knows that the Indian community is among the wealthiest ethnic communities in each country where it has a sizeable number. In the US, for instance, the Indian is the richest ethnic community. This community funds local elections, and has a degree of influence on local politicians. It would be foolish not to tap this enormous pool of goodwill that India enjoys. And who knows when a wealthy non-resident Indian (NRI) might choose to become an investor in India’s future. 

But, at the same time, the PM had to whittle down the fascination India’s privileged classes had developed for anything ‘foreign’ especially when it was at the taxpayers’ expense. Note how he has cut down the overseas trips of ministers and bureaucrats. He started this with legislators -- compelling Goa's leaders to travel to the World Cup match in Latin America at their own expense. He is doing this with the bureaucracy as well.

The Swachh Bharat campaign should be seen as a move in this context.  

No country can become a global power if it does not take pride in both its commercial achievements but in its cultural achievements as well.  Part of culture is respect for cleanliness and for work culture.  
Watch how he has begun to monitor the work hours put in by government employees. He is quite aware of how the same Indian who is slothful at work in this country actually becomes an admired worker overseas. Watch the average Keralite slog it out in the Middle East, and watch him work when he returns to his native state. What matters is a sound administration, based on values, and a good monitoring system which rewards the efficient and penalises the one who shirks from work. 

That is what Modi has begun doing – first in Delhi, and then all over India.

Expect more service norms specifying time frames within which each task is to be completed to be in place in almost all states in India within the next few months. Also expect the Prime Minister’s office (PMO) to begin demanding more accountability not merely from the bureaucrats but from elected representatives as well. This is something that was often ignored during the past several decades.

Strategic advantages

Harnessing India's strategic advantages is the next major initiative the Modi government has taken. It knows that India has some key advantages. Primary among them are sunshine, a vast 7,500 km coastline, abundant rivers, fertile land and its people. 

That is why the Modi government has doubled the target for solar power bidding of Phase II, Batch II to 3,000 MW (3 GW). This is against the current solar power capacity of just 2,600 MW. The government expects solar power costs to come down from Rs.6.5 per kWh to Rs.4.5. While the target till 2017 is 10,000 MW, the target for 2022 has been hiked to 20,000 MW. The government has pushed forward its expectation of grid parity for solar power from 2022 to 2017. 

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On the land front, restrictions which restricted industry and society from harnessing some of the mineral wealth of India have been eased. Watch how the coal and the mining sectors begin to produce more than before, and make the rest of downstream industries more competitive.

Then watch how the BJP government has announced coastal development plans for the eastern part of Mumbai, even by ignoring some of the plans that the Bombay Port Trust wanted to cling on to. Consider how Mumbai has revived water transportation plans and also the building of its first marina (currently India has only one marina – in Goa).  Expect water-based businesses – especially along the sea shore -- to be the next focus.  An announcement to this effect has already been made in the last budget proposals – of setting up at least 16 new ports. Modi has big plans to harness the strategic advantages India enjoys in respect of its coastline.

A similar strategy seems afoot in the clean Ganga programme. Not only is this holy river to be cleaned (synergistic with Swachh Bharat as well), but the waters are meant to become navigable. Expect the same with other major rivers as well

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During the last years when Modi was chief minister of Gujarat, he announced a scheme (which was not well advertised) of setting up gobar banks on a public private partnership basis. He knew that India has the largest population of cattle. And that almost 80% of cattle was with small farmers who owned 2-10 heads each. The numbers were too small for such farmers to set up a gobar gas plant themselves.  What was needed was a dung collection mechanism that would allow farmers to bring the dung to a central pool, in exchange for cash or manure, or both. Expect this plan to be given a bigger push in the coming months as one more move towards harnessing India’s strategic resources. It remains to be seen if this will be expanded to cover other forms of excreta as well. 

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Modi’s emphasis on skill development too must be seen in this light. He must have watched how India’s remittances have climbed from just around $12 billion in 2000 to around $70 billion last year, making India the biggest recipient of remittances in the world – larger than even China

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Remittances are eventually manpower exports. And population too is a natural strategic resource. But if India wants to augment manpower export, it must improve its skill-sets. Moreover, as India begins to industrialise, it will need a better skilled workforce. That explains why Modi has been almost fanatical in his pursuit of skill development, refusing even the education ministry to look after this crucial area.
The first six months must therefore be seen as the first steps towards framing additional policies which (a) create jobs, (b) upgrade and harness India’s strategic natural resources including its people, and (c) ensure that India is respected as a producer, not just as an importer.