NDA @9
Like UPA, the NDA too is poised to log 10 years in office, providing a good moment to compare the performance of the two regimes. EPISODE #126
Dear Reader,
A very Happy Monday to you.
Little over a week from now, 30 May to be precise, the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) will celebrate its ninth anniversary in office. Undoubtedly, an impressive record. Next year it would have matched its predecessor’s—the Congress-led United Progressive Alliance (UPA)—stint in government.
So this week I attempt a comparison of the two regimes, who between them have achieved an unprecedented makeover of India and its economy. Do read and share your feedback.
The cover picture this week is of Prime Minister Narendra Modi delivering his first Independence Day address in 2014. The picture is sourced from the Press Information Bureau.
A big shoutout to Shiv, Gautam, Ranjini, Abhijit, Premasundaran, Vandana and Kamal Monnoo for your informed responses, kind appreciation and amplification of last week’s column. Once again, grateful for the conversation initiated by all you readers. Gratitude also to all those who responded on Twitter and Linkedin.
Unfortunately, Twitter has shut down amplification of Substack links and content—perils of social media monopolies. Which is why I would much appreciate if you could spread the word. Nothing to beat the word of mouth.
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NDA vs UPA
Towards the end of its first year in office, the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) held a series of meet and greet sessions for journalists with Prime Minister Narendra Modi.
Reportedly, in one of them, held in May 2015, PM Modi appealed to journalists to draw fair comparisons in their analysis with the predecessor regime: the Congress-led United Progressive Alliance (UPA).
He is reported to have requested the gathering to avoid selective choices and instead compare matching tenures: UPA-1 vs NDA-1; UPA-2 vs NDA-2. Implicitly, PM Modi was confident, at the end of his first year in office, that NDA would be doing a minimum tenure of two terms.
Clearly, as NDA approaches the final year of its second tenure in office, PM Modi’s wish of comparison of likes stands answered.
Especially, since the UPA is by far the only political formation—especially after the Congress pulled off a stunning win in Karnataka—that can challenge the NDA in its bid for a record third term in office.
While it will be impossible to be exhaustive, I will attempt to do a broad overview by focusing on select themes.
Political Clout
One obvious difference between the two regimes is the political clout they command. The BJP, after notching up audacious wins in 2014 and 2019, both of which gave it a majority of its own, is at an obvious advantage.
In the sense it is less at the mercy of its coalition partners, whose numbers have rapidly diminished over the last nine years.
On the other hand, the Congress was severely handicapped by the lack of an absolute majority of its own.
As a result, its first tenure was influenced by the pulls and pressures from its coalition partners, particularly the Left parties—who have historically punched way above their electoral clout. In its second stint, the Left parties exited the UPA, reducing some of the coalition pressures. But, by then the UPA was chasing ghosts of corruption, policy paralysis, infighting in government and so on.
No doubt, the leadership of the two regimes also made a significant difference. Narendra Modi, who had paid his electoral dues over his three stints as chief minister of Gujarat held an obvious advantage over Manmohan Singh, who was a technocrat; having lost the only election he contested, Singh was inducted through the Rajya Sabha.
Policy Reforms
This political construct influenced the ability of both the regimes to undertake significant policy reforms.
The NDA under Modi was unafraid of the frequent gauntlet thrown down by the opposition.
This is apparent from the manner in which the NDA progressively pushed the envelope on economic reforms, including the passage of the seminal Goods and Services Tax (GST)—an initiative that had been tossed around for nearly two decades, till the late Arun Jaitley successfully shepherded it through some hostile debates and challenges from within the GST council.
The UPA under Manmohan was always looking over its shoulder. Either it was to manage dissidence from coalition partners or it was to seek validation from the Congress party president Sonia Gandhi. This “back seat driving”, many analysts argued, hamstrung Singh.
Though to its credit the UPA did take baby steps in creating a national identity (Aadhaar), but on shaky legal footing, launching Direct Benefits Transfer, taking forward the initiative of rural road building initiated by the NDA led by Atal Bihari Vajpayee. Its singular failure was of course its mismanagement of its fiscal deficit—especially its fiscal sins that entailed masking the actual extent of fiscal slippage.
Crisis Management
Both regimes were tested by crises. In the case of UPA it was the ‘Lehman moment’ that brought the global financial sector to its knees. The shock to the system forced economies worldwide to respond—most did so by encouraging a stimulus. India too under UPA went down the same path.
While it did provide relief, it created the basis for a liquidity overhang and dangerous inflationary conditions. In fact, the UPA bequeathed near double-digit inflation.
If its economic inheritance was not challenging enough, the NDA had to deal with a series of shocks, especially the bad run with annual monsoons and external threats from both Pakistan and China.
And, then soon after it took charge for its second term in 2019, the once in a century pandemic, covid-19, struck. Its fallout forced a contraction of the Indian economy. In fact, the fallout from this crisis snowballed in the aftermath of the Ukraine-Russia conflict, the geopolitical reset after the West sought to isolate China and a prolonged phase of global inflation that has spared no country.
With the benefit of hindsight it is clear that the NDA undertook remarkable rearguard action by holding off India’s feisty neighbours, beating back the covid-19 challenge by fast tracking a home produced vaccine and ensuring its seamless rollout, and limiting the fallout of inflation by rolling out the world’s largest free food grain programme for 800 million people.
Ideology
A big difference in the approach of the NDA and UPA to governance is their ideology each adopted in managing the means to the end.
The UPA adopted entitlement—reflected in its standout social safety net programme, the Mahatma Gandhi National Rural Employment Rural Guarantee Scheme (MGNREGA). The efficacy of which endured, especially during the abnormal post-covid phase wherein a shattered economy is yet to regain its stride.
On the other hand, the NDA opted for a strategy of empowerment. Its strategy of empowerment enabled access to basics like electricity, health insurance, housing, roads, banking, cooking gas and drinking water. At the same time it continued to hand hold the economically weaker sections through a raft of social welfare programmes.
This process got a big boost with the adoption of the Direct Benefits Transfer. Not only did it cut out the proverbial middleman it resulted in cumulative savings of nearly Rs 3 lakh crore to the exchequer.
Continuity with Change
To the credit of both regimes, this multidimensional approach to target poverty, lifted a record 415 million people out of poverty in 16 years ended 2021. Actually, this brings home a truth, which both sides, who bitterly differ, will rarely admit: for most of the last two decades, there has been continuity with change.
The big difference is that the process of change has accelerated in the tenure of the NDA as they hit the accelerator pedal in their bid to alter status quo.
The one glue that has bound the two regimes is Aadhaar, the 12-digit unique identity number. It was rolled out from 2009, but had to circumvent internal dissidence from within the UPA. Thereafter it got caught in the cross hairs of the privacy warriors, largely because it did not have statutory backing—a major lapse in judgement by the UPA.
The NDA realised the power of transformation embedded in Aadhaar. Not only did it provide the requisite legal cover, but accelerated its use on a war footing. The DBT success I alluded to above rested on the foundation of Aadhaar. Together with an individual’s bank account and mobile it provide an economic GPS as it were to target social welfare spending.
Conclusion
Even its critics will admit that the NDA has outshined the UPA in office.
The big question is as to how this plays out with the electorate. Especially, given the fact that the NDA will be contesting the general election next year as a two-time incumbent. In an aspirational India, delivering governance is a necessary and not a sufficient condition to ensure re-election.
Recommended Viewing/Reading
Sharing the latest post of Capital Calculus on StratNews Global.
You may recall that last week’s newsletter explored the outcome of the Karnataka elections, which handed the Congress party a handsome win. In that I had pointed out that among other things the election had discovered a new touchpoint for inflation: gas prices.
I dwelled on this theme in a conversation with Ashok Lahiri, economist turned politician. The former Chief Economic Advisor is now an MLA for the Bharatiya Janata Party from Balurghat in West Bengal. In his typically professorial style Lahiri explained how aspirations have taken off in the country and going forward politicians will be held accountable for their promises and governance record.
Do watch and share your thoughts. Sharing the link below:
Till we meet again next week, stay safe.
A very interesting topic chosen by you Anil and skillfully written. Although it is not possible to highlight all important aspects but the foreign policy of both the UPA and NDA have been very different. The 26/11 attack on Mumbai went unanswered, whereas the Pulwama attack was promptly followed by a retaliation; even standing upto China at the LAC, has greatly helped to boost India's image as a world power. The outreach of the present Government, in providing Covid vaccine to third world countries, becoming an arms exporter, striving for self sufficiency and having an independent foreign policy, has enhanced the stature of the nation. The UPA is dwarfed by these achievements.
Dear Anil
The general belief is that comparisons are best avoided but your indepth analysis made it very interesting. However, I think you perhaps overlooked a couple of facets. One is the clean image vs. the scam ridden one. At one point scams were a way of life because politics and corruption are supposed to go hand in hand. We haven't heard of any scams in the past decade. The NDA actually introduced demonetisation as an effective tool to fight corruption. Now the 2000 rupee note is slowly being phased out and it has barely caused a flutter.
The second factor to be considered is India's global presence in both the regimes. Both the leader at the helm of affairs as well as the country is now a global force to be reckoned with. Earlier we were a struggling third world country but now we are thought of as a country which can change the world economy. We are at the helm of affairs and that really is a proud moment to be relished.