Friday, July 08, 2016

Modi "trumps" economic reforms in faour of political exigency: "The Economist" on Cabinet expansion

Jayant Sinha
By Our Representative
In a sharply-worded commentary, the influential British weekly, “The Economist” (June 9) has said that the latest Cabinet expansion by the Prime Minister is likely to affect his reforms agenda. The heading of the commentary, published under the Indian politics section, is significant: “Modi-fication: A swelling cabinet suggests that politics trumps reform”.
Particularly singling out the transfer of minister of state for finance Jayant Sinha, whom the weekly calls “an outspoken former investment banker”, “The Economist” regrets, he “will now be a junior minister for civil aviation”, with “two BJP stalwarts with little background in finance will share his old post.”
Sinha, a graduate with distinction from the Indian Institute of Technology, Delhi (IIT-D) and the Harvard Business School graduate, is known for his strong views on economic reforms. A member of parliament from Hazaribagh, Jharkhand, he served top consultants McKinsey for 12 years.
One who helped Modi frame national economic policy, including organizing and hosting an international business leaders' forum with Modi in February 2014, investors had cheered when Sinha, a former venture capitalist, when he was appointed in the finance ministry.
Articles written by Sinha, such as 'Strategies That Fit Emerging Markets' in the “Harvard Business Review” and 'It is time for India to rein in its robber barons' in the “Financial Times” are said to have been widely quoted in scholarly works and are used as reference material in business schools.
Among reasons being cited for his removal from the post is his father, Yashwant Sinha's strong and repeated criticism of the Modi government. Recently, Yashwant Sinha, a former finance minister attacked the government on key policies and strategy, like its dealing with the Nuclear Suppliers Group or NSG.
“Controversial ministers were moved to less visible posts, and technocrats replaced by figures with more populist appeal”, the weekly notes, adding, "With three years to go before a general election, Modi’s choice raises questions about how much he will get done.” It quotes an editorial in the daily “Mint” to say: “Jumbo cabinets are not exactly the optimal solution to governance challenges.”
The commentary says, “India’s can-do prime minister, swept to victory two years ago promising minimum government with maximum governance”, and after he came to power, his incoming team only boasted “45 ministers and ministers of state, compared with the unwieldy 77-person crew fielded by the previous government.”
However, the commentary observes, “On July 5, following his second reshuffle since taking office, Modi’s council of ministers ballooned to an even wobblier 78”, insisting, “Running such a sprawling, untidy republic does require a lot of people.”
The commentary says, “Only 27 of Mr Modi’s ministers will actually sit with him in cabinet meetings. The other 50 are junior ministers, tied to specific portfolios.”
Quoting unnamed “Government loyalists”, “The Economist” says, they believe “the extra hands will make it easier to carry out the prime minister’s ambitious reform agenda.” However, it adds, “Many among India’s noisy chattering classes fear the opposite is true.”
“The Economist” wonders whether the Cabinet reshuffle has anything to do with the elections, which loom next year in several crucial states, including the biggest state Uttar Pradesh with some 200m people, the prosperous Punjab and Modi’s home state of Gujarat.”
The weekly points to how last year Modi's “Hindu-nationalist Bharatiya Janata party (BJP)” was defeated in the polls in Bihar, “a state famed for convoluted politics based on group affiliations such as caste and religion.”
This, it suggests, may have made Amit Shah, “the party’s grizzled president and Modi’s closest henchman, determined to widen the BJP’s appeal well beyond its base among higher-caste Hindus.”
“The party has made special efforts to woo Dalits, or “untouchables”, who make up a crucial bloc of voters in Uttar Pradesh. Small wonder that among 19 newly minted ministers, ten are from what India officially classifies as 'backward' castes, and three are from Uttar Pradesh”, “The Economist” notes.

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