Think economy

Think economy

Can Rahul Gandhi take up the reforms narrative that’s been dropped by NDA?

As the Narendra Modi government’s tenure winds down, a review of its reforms agenda leaves a lot to be desired. Economic sentiments had soared when the NDA government came to power in 2014, as it promised macroeconomic stability as well as long-pending reforms. This, as analysts have pointed out, saw the stock market perform extremely well overall under NDA. But earnings have not grown at the same rate and private investment has remained insipid, while foreign equity investors were spooked into heavy selling in 2018. This suggests that investors now think NDA is not delivering on the reform agenda – which opens up an opportunity for Congress led by Rahul Gandhi.

Somewhere along the line, the government’s reform narrative fell by the wayside. It developed cold feet over issues like land acquisition reforms as Rahul trolled it with accusations of being a ‘suit-boot ki sarkar’ and thereby anti-poor. To counter the charge BJP leadership rushed in the opposite direction, coming up with radical socialist policies such as demonetisation that proved massively counterproductive for the economy. And with Lok Sabha elections nearing BJP appears to be falling again into the populist trap, which could endanger even the macroeconomic stability it has been able to sustain so far.

However, it’s also true that parties take different positions depending on whether they are in government or opposition. Recall that BJP had vociferously opposed the India-US nuclear deal then negotiated by the Congress-led UPA even though it touts the deal as a strategic asset and has done much to improve relations with the US today. Similarly, BJP had opposed GST, Aadhaar and the Land Boundary Agreement with Bangladesh on grounds ranging from infringement of federalism to subversion of constitutional provisions. However, in government, BJP has taken credit for GST, tried to extend Aadhaar well beyond its original remit and implemented the India-Bangladesh Land Boundary Agreement.

Having backed BJP into the povertarian socialist position through its oppositional moves, can Congress execute a similar about turn today? It’s fair game for Rahul to criticise government on grounds of agrarian distress and job losses, but he in turn has been criticised for not having much of an economic agenda of his own. By spelling out their own reforms agenda, Rahul and Congress can outflank BJP and sustain global confidence in the Indian economy. After all, it’s they who will stand to benefit should they win Lok Sabha polls.