Wednesday, September 9, 2015

Mani Shankar Aiyar - Modi's Reforms Lie in Tatters

So what was this new formula? As MK Venu points out in a perceptive blog worth reading, it consisted essentially of three magic wands. One, unfettered land acquisition to bring in Big Boy investment both from India and abroad. Second, radical undermining of current labor laws to promote "hire-and-fire". Third, a Goods and Services Tax to transform the whole country into a single common market. 

500 days into office, Modi is discovering that what seemed obvious to him in Ahmedabad does not appear quite so obvious in Delhi. Ironically, it was principally his unyielding opposition as Chief Minister Gujarat to the Goods and Services Bill 2011 that scuppered Pranab Mukherjee's initiative. Modi had to go into complete U-turn for GST to suddenly become the BJP's touchstone for faster growth. Now he and Jaitley find themselves stymied by Congress' better understanding of what kind of GST is required to really accelerate economic growth - no GST is better than a poorly-drafted GST. We'll explain that to them once they start consulting us as earnestly as Jairam Ramesh did with them over the Land Acquisition Act, 2013.

Modi's proposed changes to labour laws led to such a furious reaction in organized labour circles, including the BJP's own trade union wing, that the labour reforms he sought in mid-2014 soon after becoming PM had to be postponed to bring the Sangh Parivar on board. The BJP's union might have been dissuaded from participation in the nation-wide labour strike on  September 2 against the proposed amendments, but the BJP union remains firm in its opposition to the changes in labour laws that the Modi government wants to bring in.

And now comes the humiliation of having to eat humble pie over the land acquisition legislation. The Modi model lies in tatters. And the Patidar agitation in his home state shows that the Modi model is being challenged even in Gujarat.. read the whole article: