An impressive default victory for Modi

BRP Bhaskar

@brpbhaskar

Narendra Modi. File

ithout delving deep into the voting figures, it can be safely asserted that Prime Minister Narendra Modi won a second term by default.

The National Democratic Alliance government which he headed had attracted charges of governance failure but he was the only contender for power who could carry conviction with the people about his ability to provide a stable administration.

The national electorate did not see either Congress President Rahul Gandhi, who led the United Progressive Alliance’s challenge to Modi and the NDA, nor any of the leaders of the small national and regional parties with prime ministerial ambitions as credible alternatives.

In the event, Modi led the BJP to an even more impressive victory than what the exit polls had forecast, winning 303 Lok Sabha seats, 21 more than its 2014 tally and 31 more than necessary for an absolute majority in the house.

Modi’s re-election bid was greatly aided by the failure of the alliance forged by Mayawati’s Bahujan Samaj Party and Akhilesh Yadav’s Samajwadi Party to contain the BJP in Uttar Pradesh, the country’s largest state.

In 2014 the NDA had won 73 of the state’s 80 seats.  Though the BSP and the SP, which draw support primarily from the Dalits and the backward classes respectively, were said to have a combined vote share almost equal to the BJP’s, the NDA still bagged 62 seats.

Modi’s election campaign, which skirted governance issues, was rooted in the polarising Hindu nationalist narrative. It helped the BJP to retain much of the spectacular gains it had made in the north and the west in 2014.

In the east and the south it made enough fresh gains to more than offset the small losses in those regions.  However it found two southern states, Tamil Nadu and Kerala, extremely hostile.

It could not win a single seat in these states, mainly because it is seen there as an upper caste party whose objectives run counter to the ideals of the powerful movements against caste supremacy which swept the region in the pre-Independence period.

With allies bringing in 47 seats, the NDA total stands at 350, which is 12 short of the two-thirds majority needed to push constitutional amendments through the Lok Sabha. This means the BJP will find it difficult to go ahead with its objective of declaring India a Hindu nation.    The Congress improved its position slightly, winning 52 seats against 44 it had got in 2014. Since this is less than one-tenth of the strength of the Lok Sabha, the party’s house leader will not get the status of Leader of the Opposition.

While the BJP’s vote share increased from 31.3 per cent in 2014 to 36.5 per cent, the Congress party’s remained almost unchanged at 19.6 per cent.

It follows that the BJP made its gains at the expense of small national parties and regional parties, whose leaders were hoping for a hung Lok Sabha which will give them the opportunity to play an important role in the formation of an alternative government. 

Five of the 13 who held the office of the Prime Minster before Narendra Modi were leaders of small parties propped up by uneasy coalitions. None of them could complete one year in office.

Having experienced stable coalitions for two decades, first under AB Vajayee (BJP) and then under Manmohan Singh (Congress) and Modi, the voters clearly did not want another phase of instability.

In Odisha, where elections to the Lok Sabha and the State Assembly were held simultaneously, the voters clearly signalled that they want the BJP to wield power at the Centre and the regional Biju Janata Dal in the state.

They gave 13 of the state’s 21 Lok Sabha seats to the BJP but only 22 of the 146 Assembly seats. They voted BJD Chief Minister Naveen Patnaik to power for a fifth successive term with an overwhelming majority in the Assembly.

The election saw a sharp decline in the influence of the Left parties. In West Bengal, where the Communist Party of India (Marxist)-led Left Front for more than three decades before losing to Mamata Banerjee’s Trinamool Congress  in 2011, they drew a blank.

The BJP raised its vote share in the state from 17.02 per cent in 2014 to 40.05 per cent and took 18 0f the 42 Lok Sabha seats. The Left parties’ vote share fell from 22.96 per cent to about seven per cent, indicating a massive shift of Left supporters to the Hindutva camp. 

Kerala, the only state where the Left now wields power, the Congress and its allies swept the polls, winning 19 of the 20 seats. -- Gulf Today, Sharjan, May 26, 2019.

The glorious uncertainties of democracy

BRP Bhaskar

@brpbhaskar

Poll officials check voting machines at a polling station in Mumbai.

The people of India have made their choice but their verdict still remains a matter of speculation as counting of votes will begin only on Thursday.

In the past, counting was completed in a matter of hours. This time the process may take longer as the electronic voting machines’ records have to be matched with paper trails in view of allegations of manipulation of EVMs.

That gives the contenders for power more time to make claims and counter-claims based on feedback from below or, more likely, on wishful thinking.

The question to which observers are awaiting an answer is whether or not the people have granted Prime Minister Narendra Modi the five more years he sought.

A day before the last batch of constituencies went to the polls, Modi asserted that his Bharatiya Janata Party would secure 300 seats in the 543-member Lok Sabha, bettering its 2014 tally of 282.

In the closing stages of the bitter campaign, after Modi personally attacked his late father and former Prime Minister Rajiv Gandhi, Congress President Rahul Gandhi tweeted to him: “The battle is over. Your karma awaits you. Projecting your inner beliefs about yourself onto my father won’t protect you.”

When the last phase of polling ended on Sunday, the media came out with the findings of exit polls. Most of them indicated that the BJP-led National Democratic Alliance will secure an absolute majority and Modi will remain in the saddle.

Indian pollsters have a poor record of accuracy,  largely due to the immense diversity of the polity, which makes it extremely difficult to make reliable projections, and partly also to a propensity to come up with findings that please the paymasters.

In 2004, when the first BJP Prime Minister, Atal Behari Vajpayee, sought a fresh mandate with the slogan “India Shining”, the NDA was projected to win between 230 and 275 seats and the Congress-led United Progressive Alliance between 176 and 190 seats.  But the NDA got only 187 seats and the UPA, which bagged 219 seats, formed the government.

Currently, the NDA is projected to win between 242 and 365 seats, the UPA between 82 and 164 seats and parties not committed to either of them between 77 and 138 seats.

The wide range of the projections made by different agencies for each group of parties underscores the glorious uncertainties of democratic elections as well as the difficulties the pollsters encounter in surveying the complex polity.

The exit poll findings which have given Modi and the BJP cause to rejoice also contain cause to worry.   Even if the NDA reaches the highest projected figure it will only mean the coalition remains where it was five years ago.

The exit poll figures suggest that Modi’s hope of a haul of 300 seats will not materialise. Of the nine pollsters, five put the NDA tally at below 300 and three of them indicate that, unlike in 2014, an absolute majority will elude the BJP.

As for the UPA, even if it reaches the lowest projected figure, it will mean an improvement as it won only 59 seats last time.

Most opposition parties are not taking the exit poll findings seriously. West Bengal Chief Minister Mamata Banerjee dismissed them as gossip and urged the opposition parties to stay united.

The worst loser in the elections will be not any of the contesting parties or candidates but the three-member Election Commission, the constitutional body charged with the task of conducting elections to the offices of the President and the Vice-President, the two houses of Parliament and the state legislatures.

The Commission’s pusillanimity in face of opposition complaints of violations of the model code by Modi and BJP President Amit Shah shocked observers.

Only after the opposition approached the Supreme Court and it set a time-frame for the Commission to dispose of the complaints did the august body  gather enough courage to consider them. And then it gave the two leaders a clean chit.

It transpired later that Ashok Lavasa, one of the members of the Commission, had differed with the majority decision but his dissent was not recorded. Following this, he stopped attending the Commission’s meetings on model code violations.

The current Chairman and members of the Commission are all persons appointed by Modi. There is an urgent need to revise the law and devise procedures to ensure the independence of the Commission. --Gulf Today, sharjah, May 21, 2019.

Final stretch of the race to power

BRP Bhaskar

India moves towards the last leg of general elections 2019.

he last round of polling in India’s bitterly fought parliamentary elections is still four days away and the electronic voting machines will reveal the secrets they are holding only on May 23. But the rival contenders for power have begun home-stretch manoeuvres.

A party or combination of parties needs 272 seats to command a majority in the 543-member Lok Sabha. In 2014, Prime Minister Narendra Modi’s Bharatiya Janata Party won 282 seats with a poll share of just 31 per cent, thanks to the big sweep it made in the Hindi states in the north and Maharashtra and Gujarat in the west.

Over the past five years, its strength fell to 269 following the loss of more than a dozen seats in by-elections. However, this posed no threat to the government as its National Democratic Alliance partners had the numbers to cover the shortfall.

Aware that 2019 is a different ball game since it is facing the voters as the party which ruled for five years, the BJP took care to expand the NDA ahead of the poll to boost its prospects.

It now has a record 40 allies.  Many of them are small parties put together by political fortune-seekers on the eve of the elections.

Modi started his bid for another term with a disadvantage. His much hyped programmes like ‘Make in India’ and Swatch Bharat (Clean India) had not yielded the expected results. Demonetisation and Goods and Services Tax had disrupted the informal sector of the economy, leading to closure of businesses.  Opposition campaigners raised questions about job losses.

In a bid to overcome the poor governance record, Modi started talking of national security.

Although under his watch there were daring attacks on two major military bases and a suicide bomb attack killed more than 40 security personnel, he nonchalantly claimed his tough line had put an end to terrorism.

The BJP, however, had one big advantage in the opposition’s inability to forge a joint front. In regions where there was a measure of opposition unity Modi tried to drive wedges between allies.

While professing to be optimistic about the outcome of the elections, the BJP and the opposition have initiated moves to deal with the possibility of a fractured verdict throwing up a hung Lok Sabha.

The performance of national and regional parties in recent elections reveals an interesting pattern. The BJP and the Congress together command the support of only half of the national electorate. The other half is behind a plethora of small parties which are all essentially regional though some of them are recognised by the Election Commission as national parties.

The BJP is reportedly in touch with Biju Janata Dal and Telangana Rashtra Samiti, the ruling parties of Odisha and Telangana respectively, to make up any shortfall in NDA numbers.  

Two years ago, when the BJP fell a few seats short of an absolute majority in the Karnataka Assembly but was well placed to muster the necessary support to form the government, the Congress had turned the tables on it by entering into a post-poll alliance with the Janata Dal (Secular) to keep the BJP out of office. It offered the chief minister’s post to the smaller JD(S).

A score of opposition parties, including the Congress, are said to be exploring the possibility of a similar manoeuvre to keep the BJP out at the Centre too.

It is not easy to repeat Karnataka at the national level. The Congress had to placate only one party to block the BJP’s path there. To bar its return to power in New Delhi it has to win over at least a score of parties.  Several of these parties are led by leaders with prime ministerial ambitions.  

Besides, some opposition parties still harp on the idea of a “non-Congress non-BJP government,” which makes no qualitative distinction between the two large parties.

A proposal for an opposition conclave before the counting of votes begins was dropped as most leaders are inclined to go slow till the composition of the new Lok Sabha, which will indicate the bargaining capacity of each party, is known.

At this stage, the odds are stacked in the BJP’s favour.  As the richest party and the one currently wielding power it is in a better position than the Congress to enlist the support of small parties. -- Gulf Today, Sharjah, May 14, 2019 

Banks need to be free from political meddling

BRP Bhaskar

A man counts rupee banknotes after withdrawing them from an ATM in Kolkata, India. Reuters

A steep rise in loan defaults during the Modi years has landed India’s banking system in a crisis. Several measures have been mooted to deal with the problem, but they steer clear of the core issue which is wilful neglect of professionalism to propitiate powerful corporate interests that enjoy political patronage.

Public sector banks dominate the sector, accounting for about 70 per cent of its assets. Between 2014 and 2018 they wrote off bad loans to the tune of Rs 5,560 billion.

Write-off is a way of cleaning the statement of accounts. Theoretically, it does not preclude the bank from continuing efforts to recover the money but usually it does not exert much pressure on the borrower after the write-off.

Data shows only about 15 per cent of written-off loans are recovered. This means the banks are making big gifts to delinquent customers through write-offs. At the end of 2018, banks’ gross non-performing assets (an euphemism for loan defaults) stood at Rs 8,640 billion, according to provisional data furnished by the Reserve Bank of India to the government. This was 13.6 per cent of the advances, which totalled Rs 63,210 billion. 

After 31 big defaulters, including liquor baron and airline promoter Vijay Mallya and diamond king Neerav Modi, fled just as banks initiated action against them, the government considered issuing orders to bar other defaulting businessmen from leaving the country.

Accordingly, officials drew up a list of 91 persons associated with different companies. However, it is not known if airports have been instructed to prevent them from flying out of the country.

The authorities’ readiness to protect the identity of wilful defaulters in the name of fiduciary relationship is a factor that helps delinquent borrowers. The RBI routinely rejects requests under the Right to Information (RTI) Act for names of defaulters in spite of a Supreme Court directive.

Last month the court gave the RBI “a last chance” to provide the information they had sought. Parliament was told recently that the number of bank frauds involving Rs 100,000 and above had gone up from 4,693 in fiscal 2016 to 5,076 in 2017 and 5,917 in 2018.  

There are two reasons for the rise in bad loans under Prime Minister Narendra Modi. One is the introduction of strict accounting rules mandated by international agreements. The other is the introduction of a free-wheeling loans policy.

When companies seek loans, the banks customarily take personal guarantees from their directors but rarely do they invoke the guarantees when a company defaults.  Departing from this practice, the State Bank of India last week filed a suit before the Debt Recovery Tribunal at Ahmedabad for recovery of Rs 150 billion from Prashant Ruia and Ravi Ruia, promoters of EssarSteel, who had given personal guarantees when the company took a loan.

Does this mark the end of the growing impunity which owners of defaulting companies enjoyed under the Modi regime? More such action is needed to answer this question in the affirmative.

As companies with heavy debts started closing down, throwing banks which had lent them money in trouble, the Modi government introduced the Insolvency and Bankruptcy Code (IBC) with the proclaimed objective of enforcing some order.  Finance Minister Arun Jaitley says IBC helped bring close to Rs 3,000 billion back into the banking system.

However, according to financial experts, IBC has opened the way for big companies to acquire small ones at low prices. IBC proceedings brought to light financial irregularities to the tune of Rs 1,000 billion in the companies. “This,” an analyst points out, “is for companies that went bankrupt. So you can imagine what’s going on in companies that are still functional.”

Bad loans have done enormous damage to the health of the banking system. In the financial year 2016-17 public sector banks had reported an aggregate net profit of Rs 3 billion.  Thereafter they went into the red, recording losses of Rs 106 billion and Rs 110 billion in the last two years.

The government has two ideas to deal with the crisis. One is to amalgamate some banks to create bigger units. The other is to privatise the banks by divesting some of the stocks it holds.

A big bank does not necessarily mean a healthy bank. The assumption that private banks are better run than state-owned ones is questionable. The largest private bank now in the field is grappling with problems similar to those dogging the public sector banks.  

Banks must be strengthened professionally and allowed to function without political interference in day-to-day working. - Gulf Today, Sharjah, May 7, 2019.