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Tag Archives | One Year review

One year of NDA government’s foreign policy: What changed and what didn’t?

By Pranay Kotasthane (@pranaykotas)

These are the comments that Pranay wrote for Emerging Kerala, a Malayalam monthly magazine on Kerala’s business, economy and society in the backdrop of the first anniversary of NDA rule.

Q: As Narendra Modi government is completing one year in this May, what do you think the achievements of the country in diplomatic relations with other countries? How Narendra Modi’s foreign visits have benefitted our economy?

The astute selection of countries for engagements is the first significant achievement. Looking beyond the sub-continent and giving a much-needed push to the relations with countries like Japan, Australia, Vietnam and US was long overdue.

It is also important to realise that foreign policy successes aren’t outcomes of foreign visits alone. Foreign policy successes need domestic consensus building as well. On that count, resolving the long-standing land border issue with Bangladesh through the constitutional process constitutes the second diplomatic success. This will allow India to focus on more substantive issues like getting transit access to the Northeast Indian states through Bangladesh.

Third, the operationalisation of the civil nuclear deal with the US is another achievement, removing a roadblock in the partnership between the two countries.

It is good for the Prime Minister to invest time in international engagements: India’s growth is influenced by the world and the world’s situation in turn affects India’s growth. So, foreign engagements are key to the Indian economy.

The benefits of foreign policy initiatives on the economy are delayed by their inherent nature. So, its effects, whether in terms of giving a boost to ‘Make in India’ or in terms of energy security, will take some time. However, a good foreign policy is just solving one part of the puzzle for giving a boost to the economy. The second part demands that the government put the right policies in place domestically like making the Indian setup more market-friendly.

Q: Has India got an image makeover globally? Is India becoming an influential global force?

Yes, to the extent that Mr. Modi’s revitalisation of India’s foreign policy has re-established India as a significant player in international affairs. Mr. Modi has raised expectations across the region. India’s position is key to the Asian balance of power and this government has conveyed the right signals to other important players in the region.

On the other hand, global influence is itself an outcome of national power. And one of the most important factors for national power is consistent economic growth. The other countries look up to India only because they believe that its growth will be of benefit to them as well. So, economic growth will be the key to national power and in turn to a greater influence in the world.

Q: There are criticisms about the huge expense of Modi’s foreign visits. How do you look at this?

Foreign visits by important ministers of state are not junkets. There is a great tendency to view such trips with the lens of “onsite” opportunities.

We have to go beyond the mindset of a “poor” India that cannot be an important player in the international arena. To that effect, these trips are very important, both as a signal to the world, and in terms of concrete partnerships with key nation-states. Overall, India’s policy discourse will benefit from the PMs international engagements and exposure.

Given the huge positive externalities of the PM’s visit to other countries, I definitely do not subscribe to the view that the expenses are worthless.

Q: What do you think the most significant step that Modi has taken in the foreign policy?

The most significant step has been to signal to the world that India wants to proactively engage with every country.

The buzz around the world is that India now has a government that can get its act right and resolve internal issues while engaging externally.

Q: What are the major differences in the foreign policy of Narendra Modi government and former UPA government?

The biggest success during the UPA tenure was the US-India 123 agreement which, by no means was a small achievement. It put the India-US partnership on the right track after several years of sluggishness.

Beyond that success, a large amount of time, and political capital were wasted on international groupings that had little relevance to India’s foreign policy priorities. On the sidelines of one such conference, the PM even committed a big blunder of signing a joint statement with the PM of Pakistan that effectively agreed to India’s role in Balochistan.

In general, there was a lot of focus on getting our relationship with Pakistan right, which was a wishful thinking given that Pakistan was, and is still in control of the Military Jihadi complex (MJC) which sees no benefit in good relations with India. As a result, we missed the boat on engaging with other countries instead.

What we now see is that the new government is more proactive in its foreign policy. Modi’s focus on foreign policy has taken everyone by surprise. This means that foreign countries are taking that one extra step as well.

Secondly, there is a lot more visible focus on engaging with countries beyond the Indian jambudweepa, thereby establishing India not only as a regional leader, but also a global powerhouse.

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Pranay Kotasthane is a Research Fellow at The Takshashila Institution. He is on twitter @pranaykotas

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Narendra Modi’s One Year – A review of reviews

By Anupam Manur and Devika Kher

In one year, the PM has made incremental changes to the economy, government structure, and foreign policy but the lack of the game-changing reforms expected of him renders the year marginally above average.

One year on, Prime Minister Narendra Modi’s performance has been under severe scrutiny and though the assessment has been mostly positive and hopeful of the coming four years, there is an underlying recognition that much more needs to be done in order to justify the overwhelming mandate.

Economic Performance under Modi

As per New York Times’s article by Ellen Barry, “India is now seen as a bright spot, expected to pass China this year to become the world’s fastest-growing large economy.” Prime Minister Modi entered the office at one of the most exciting time that the Indian economy has seen till date.

To begin with, almost all the dailies commonly acknowledged Prime Minister’s ‘luck’ with the oil price fall and discounted his contribution to the financial condition of the country. The Live Mint’s editorial article remarked on lower commodity prices bringing down inflation, fiscal deficit and the current account deficit. However, Raghuram Rajan is quoted by Barry as appreciating the government’s steps to create an environment for investment.

India also saw liberalisation of sectors untouched for a long time; limits on foreign investment in defence and insurance were both raised to 49 percent. The PM also deregulated the prices for diesel, petroleum and cooking gas. Live Mint also appreciated the PM’s move to avoid lavish increases in minimum support prices and the successful auction of coal blocks and telecom spectrums.

The improvement in economic performance has largely been attributed to positive global factors rather than the present government’s interventions. There have been no revolutionary game-changing reforms and the government is struggling to implement its Goods and Services Tax and Land Acquisition Bill, even in a diluted form. Surjit Bhalla, in his Financial Express column, is particularly critical of the confused tax policy. The retrospective Minimum Alternate Tax (MAT) has led to Foreign Institutional Investment outflow and a loss of confidence in the Indian economy. The data on FDI for the popular ‘Make in India’ campaign does not match the brouhaha. The Urbanization agenda also scores rather poorly, with no real activity on the ‘100 smart cities’ project. The government’s track record on education and health is not impressive either, as argued by Tavleen Singh. Another article in the Hindustan Times also severely attacked the government for reducing the budget in areas like food subsidies, health, education, etc.

Social Policies

Subir Gokarn’s one year report card in Business Standard positively assessed the progress on three critical structural challenges: food, infrastructure and employment.

The PM has, however, been applauded for the announcement of various social schemes such as the Pradhan Mantri Jan-Dhan Yojana and the Atal Pension Yojana that will improve the financial inclusion of the people. However, G. Sampath has dubbed these financial inclusion schemes as Modi’s war on welfare as they have come at the cost of poverty alleviating ones. While the MGNREGA and the Food Security Act were rights-based social provisions, the Pradhan Mantri Yojanas “put the onus of social security on those who lack it the most — the poor themselves”.

PM Narendra Modi and President Obama

Foreign Policy 

An Open magazine article by Brahma Chellaney commented that pragmatism, zeal and showmanship were the trademarks of the PM’s foreign policy. He describes the PM as a ‘a realist who loves to play on the grand chessboard of geopolitics’ and postulates that the foreign policy strategy is to revitalise India’s economic and military security. He does appreciate the PM’s “non-doctrinaire foreign-policy approach powered by ideas”. In a Hindu article, Chellaney states that “for a politician who came to office with virtually no foreign-policy experience, Mr. Modi has demonstrated impressive diplomatic acumen”.

The Diplomat’s two part review of the PM’s one year by Rohan Joshi complimented the PM on his efforts ‘to correct the faltering trajectory of India’s relationship’ with the United States and China and described them as “a positive departure from the past”. Joshi also acknowledged the PM’s attempt to strengthen relations with “Asian Sates that share India’s anxieties over China’s aggressiveness in its neighbourhood.” He goes on to commend the PM’s indifference to Pakistan and his work to build relations with Bangladesh.

It is generally agreed that Narendra Modi has been the most active PM in India’s recent history with regard to foreign policy. However, critics have questioned the timing and number of Modi’s foreign visits as it has left Modi with little time for domestic affairs. Chellaney points out that the Sri Lanka visit could have been extended till after their domestic elections and that his visit to China within 8 months of Xi’s visit to India can be considered too soon.

The Autocratic ruler

The PM’s micro-managerial style has come under intense scrutiny. The Economist ran a cover story on “India’s one man band” where the PM was appreciated for his move to devolve powers to the states. According to The Economist, this would help in creating a manufacturing boom in the country. However, the magazine contends that Modi’s biggest mistake is to believe that he alone can transform India.

The PM is however, having an impact on the bureaucratic culture in India. One of his first reforms was to push for the self attestation of documents. The fastidious whip of the PM has made the bureaucratic staff more efficient and punctual. According to the New York Times article, the PM has ensured that all business deals by ministries are routed through his office to remove the “informal meetings that business leaders used to hold with ministry officials.” This opinion was also backed by Mint, which dubbed the PM an effective administrator.

Brahma Chellany also supported this view by pointing out that the PM has realised the negative impact that corruption would have on internal security and foreign- policy options, and is seeking to bring it under control.

However, not everyone is happy with Modi’s style of governance. The biggest criticism against Modi and his government is that it is hard to distinguish between the two. Santosh Tiwari, in his Financial Express column, contends that the fallout from PM Modi projecting himself as the sole panacea to all of India’s woes is that there is a genuine lack of second rung leadership in the party and the government. The result is that the PM is the final authority on all matters, which hampers the ability of other ministers/leaders to act competently and independently.

Mihir S Sharma, in his acutely critical article “Wasting 282” in the Business Standard, argues that Modi has wasted the enormous mandate presented to him in his first year and attributes this to the lack of direction of top officials.  Ministers and bureaucrats are confused and pulled in different directions because there are no clear set of guiding principles from the PM. The PM insists that “hands-on, case-by-case action such as he delivered in Gujarat, is enough”. This explains the piece meal reforms and lack of big sweeping reforms.

The final word:

Given the nature and enormity of expectations, PM Modi’s government was bound to fall short. As Rajiv Kumar puts it “surprisingly, thus, at the end of one year, Modi finds himself facing disquietude and impatience from the middle, neo-middle and business classes who were his star supporters during the campaign”.  In one year, the PM has made incremental changes to the economy, government structure, and foreign policy but the lack of the game-changing reforms expected of him renders the year marginally above average.

Anupam Manur is a policy analyst at Takshashila Institute and tweets @anupammanur

Devika Kher is a Research Associate at Takshashila Institution. Her twitter handle is @DevikaKher

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