The Mantra of Modinomics
The apparent success of the NDA in delivering development at scale, is based on the principle of KISS (Keep It Simple, Stupid). EPISODE #173
Dear Reader,
A very happy Monday to you.
Last week the Bharatiya Janata Party (BJP), which leads the ruling National Democratic Alliance (NDA), held an event on the sidelines of the ongoing general election to showcase Modinomics—the driving economic mantra for the NDA. It was to release a book—The Art of Implementation: How Modi ki Guarantee is Delivered. It is a collection of pieces by several people, including politicians, party functionaries and journalists.
Some chapters serve as the insider take on how the NDA under Prime Minister Narendra works. This is rare. Because the NDA has functioned largely under the radar of the media. Operating purely on a ‘need to know’ basis. And therefore we do not know much about the logic and working of Modinomics.
Finance Minister Nirmala Sitharaman, who was the lead speaker at the event and has also contributed a chapter, unpacked the Modinomics mantra: Keep it simple.
In other words, eliminate unnecessary elements that come with over thinking. If you have been following the compelling career of M S Dhoni, India’s legendary cricket captain, then you would find that this strategy defined his spectacular success.
Given that the NDA’s economics, social guarantees preferring empowerment over entitlement, is front and center of their pitch for a record third consecutive term, I thought this would be an eminent topic for the week.
The cover picture is a stunning composition of daily life in Kolkata taken recently by Rahul Sharma.
Happy reading.
Unpacking Modinomics
For 10 years I have struggled to figure the inner workings of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA). Unlike previous regimes, the NDA under Prime Minister Narendra Modi has remained tight fisted on any information disclosure. It is strictly on a ‘need to know’ basis.
Last week we got an insider take at the launch of a book: The Art of Implementation: How Modi ki Guarantee is Delivered. It came from Finance Minister Nirmala Sitharaman, who over the last five years has been at the epicenter of this government: first firefighting the crisis triggered by the covid-19 pandemic and later in growing the Indian economy.
In her typically candid style, the FM laid out the inner workings of the NDA in the keynote address. Contrary to expectations, there is nothing complex. Instead it is all about keeping it simple.
The Governance Mantra
After listening intently to the FM’s speech, I summed up her observations on Modinomics as follows:
Complete all pending infrastructure projects irrespective of when they were announced and which political regime;
Achieve saturation access to basic amenities like electricity, even in remote areas within every state;
Review progress of aspirational districts on a monthly basis through video conferences with district collectors;
Periodically review implementation of key schemes like Swachh Bharat Mission and analyse collateral gains through independent studies;
Increase capital expenditure as a proportion of total expenditure to focus on asset creation and generate growth.
Clearly, this no rocket science. It is just basic governance sans flourishes.
Don’t get me wrong. The NDA can’t be faulted on ambition and the desire for scale. Its fruition though, involves some serious grunt work on a 24x7 basis. From FM Sitharaman’s remarks it is clear that this is non-negotiable in this government.
I do know from conversations with bureaucrats, that PM Modi often sits in on these review meetings pushing for finite an accountable milestones. Guess, which is why the follow through on announcements is very good.
And, this despite having to work with the very same broken system that previously created so much sloth in the government machinery, resulting in legacy deficits in universal access to basic services like banking, toilets and electricity.
I believe this governance mantra draws from a principle in design which posits that systems perform best when they are simply designed, as opposed to those which are complex in nature. Known as KISS (Keep It Simple, Stupid), this design principle is at times dismissed as too simple to deliver. In fact, Stupid in the acronym KISS is there precisely to disabuse such conclusions.
To be sure I have no idea as to whether the NDA governance strategy is inspired by KISS. It is merely my surmise to unpack their governance style.
Keep it Simple
In fact, you will recall that the NDA’s first big idea of providing toilets in every home—announced by Prime Minister Narendra Modi in his first address to the nation on Independence Day from the ramparts of Red Fort—under the Swachh Bharat Mission was met with derision and dismissed.
Looking back, it turned out to be a game changer. Not just in securing hygiene at the level of a household and thereby improving the health of millions at the bottom of the pyramid, but also because it restored dignity, especially among women.
Like in the case of universal access banking, electricity, cooking gas and so on, none of these proposals are original. They have been promoted by every regime since Independence.
In this the biggest and best example is Aadhaar—the idea of a unique identity for all resident Indians was conceived in the regime led by PM Atal Bihari Vajpayee and productionised by the government of PM Manmohan Singh under the leadership of Nandan Nilekani, co-founder of Infosys.
PM Modi’s regime embraced Aadhaar and in fact weaponised it. The foundation of Aadhaar is what enabled the roll-out of the technology stack, which made it possible for India to achieve success in the rollout of public goods at a staggering scale.
Banking 50 crore people, providing toilets to over 12 crore households, cooking gas connections to 10.3 crore households, including 5.43 lakh migrants, is no easy task—to put it simply, NDA succeeded where previous regimes failed for the first six decades since the country attained Independence.
Similarly, as FM Sitharaman revealed, the NDA approached projects pending forever, on a war-footing.
“In 2014, the Prime Minister told us to look at all those pending projects; whether they are pending for decades, years, or for just one or two years. Look at all of them. Be sure to complete them. And till then do not even come up with anything new.”
She went on to flag some of these projects:
Kollam by-pass in Kerala: It was approved in 1972 and hence pending for five decades;
Saryu canal project in Bihar: Pending since it was launched in 1978;
Kosi Mahasetu bridge in Bihar: The 1.9 km bridge was sanctioned by the union government in 2003;
Bogibeel rail bridge in Assam: It was sanctioned in 1997. The 4.9 km bridge is India’s longest rail-road bridge connecting Assam and Arunachal Pradesh;
Atal Tunnel in Himachal Pradesh: The 9.02 km long tunnel that runs under the Rohtang Pass and enables all-weather access between Rohtang valley and Lahaul Spiti was sanctioned in 2000;
The eastern and western peripheral highways connecting NH-1 and NH-2 from the eastern and western sides of Delhi was proposed in 2006.
I have written previously how the pace of rollout of roads, including those in rural areas, grew at a staggering pace under NDA. The graph below (a little dated) captures this trend.
Once again, the rural roads project was an idea conceived under PM Vajpayee, continued under PM Singh and accelerated under PM Modi.
Guess, by now you would have got the drift of the argument. I am reminded of the famous quote attributed to Deng Xiaoping, the man credited for China’s compelling success:
“It doesn't matter whether a cat is black or white, as long as it catches mice.” (He was arguing that as long as the economy works it is a good economy.)
The NDA’s strategy is somewhat similar. The apparent success of the NDA is based on its ability to walk the talk of all governments post Independence.
On 4 June we will know whether the people of India concur with this surmise.
Recommended Viewing/Reading
Sharing the latest post of Capital Calculus on StratNews Global.
A few weeks ago the Reserve Bank of India (RBI) celebrated its 90th anniversary. A remarkable moment, especially for an institution that is a bulwark of the Indian economy and one that has constantly reinvented itself to adapt to the changing contours of the Indian economy.
I was curious as to what makes the country’s central bank tick? How has it shaped and secured India’s financial sector, even while fostering innovation?
To answer this and more I turned to a former insider, Indranil Sen Gupta. At present, he is the head of research at CLSA (India). Sans jargon, Indranil walked me through the transformation of RBI and the reasons why it is such an outstanding institution.
Sharing the link below. Do watch and share your thoughts.
Till we meet again next week, stay safe.
Thank You!
Finally, a big shoutout to Shashwathi, Premasundaran and Gautam 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 disabled amplification of Substack links—perils of social media monopolies operating in a walled garden framework. I would be grateful therefore if you could spread the word. Nothing to beat the word of mouth.
Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
Delivery of projects have been much better than the previous governments tenure, as the sincerity of purpose was there. The other aspects, like benefits to the party, have been somewhat been made easier by instruments like electoral bonds. After spending colossal amounts for elections, the need for recovery and profit arose. Now the award of contracts for projects, linked closely to the purchase of electoral bonds, has paved the way for efficient execution of infrastructure projects. The government is also aware that development will ensure reelection and it is a win win situation for all. Now the ruling party with coffers full, are bearing the cost of election campaigns. The situation is leading the country to a rapidly growing infrastructure development 👏
Dear Anil
Thanks for unravelling the mystery behind the success of so many projects and schemes. I honestly think that the basic factor responsible is the determination to improve the lot of the common man and not just on paper. Here is a government run by people who don't focus on filling their own pockets or establishing family hierarchies. Once the intent is noble, finding the correct path seems to follow naturally.
They are aware of the problems faced by common man. No PM had discussed public toilets because it wasn't a topic you discussed in public! He faced a lot of snickers and derision for doing so. Swachh Bharat wasn't even considered a possibility in such a densely populated country. So long as it was clean within the four walls of one's house, who cared about the rest of the country? It's again a concern for the plight of women which motivated the government to implement schemes like cooking gas, electricity and clean drinking water to each and every house. It's a realisation of the lack of connectivity which has led to so many roads and tunnels even in the most remote and difficult terrain.
Till now projects and schemes were launched by politicians favouring their own constituencies. That's why projects were launched with a lot of fanfare and abandoned if there were no political gains. It's no longer so. Infact the promise now is that the foundation stone will be laid and the project will be inaugurated by the same government. Hitherto unheard of.
Let's hope that people can appreciate the changes brought about in the past decade and not fall prey to temporary freebies openly promised just before the elections. To be forgotten once the results are declared.