Eighteen months into the National Democratic Alliance’s term, rumours about a ministerial reshuffle between the winter and Budget sessions of Parliament are everywhere. I don’t buy it myself – I think only one man knows the prime minister’s mind, and that’s Narendra Modi, and besides the Bharatiya Janata Party is seriously short of talent worth inducting into government – but it’s important to recognise why these rumours won’t die. It’s because of the feeling that too many ministries are under-performing. Here’s a very brief report card.
First in class:
Highways (Nitin Gadkari): It is almost universally agreed that Gadkari’s the stand-out performer. Road-building has taken off (though not at the rate he boasted or promise, a standard problem in a government that has dismally failed to manage expectations). More than that, he appears to have worked hard to tackle the rather complex issues surrounding private investment in highways. His personal political clout helps – it has been noted that he doesn’t look to or thank the PM for guidance as much as his colleagues, and yet he can get the Cabinet Committee to meet to essentially just approve three projects he wants pushed. Why has he a shot at success? Partly because, unlike pretty much everyone else, he actually understands contractors, having been one himself. He is focused on saving money and clear contracting. And perhaps because he has a clear mandate, without too many competing priorities.
Front row:
Power and coal (Piyush Goyal): Goyal’s ministry gets big credit for managing the coal auctions well. Some must be taken away for his refusal to accept that private companies have over-bid, storing up trouble for down the road. A similar problem surrounds solar energy pricing, where pleasingly big ambition is undermined by excessive confidence in the accuracy of the prices discovered – something reminiscent of the early years of the previous government. Again similarly, the UDAY restructuring of state power debt will certainly work to revive investment in the short-run – but, as RaghuramRajan pointed out recently, too little has changed fundamentally, and another bail-out in the future looks inevitable. But, on electrification, which is the clearest mandate for the ministry and one in which problems cannot be kicked down the road, it looks like progress is being made.
Oil and gas (Dharmendra Pradhan): Pradhan’s ministry is helped by low fuel prices meaning the stakes are suddenly lower. Under his watch – although in some ways, according to a report in this newspaper, in spite of Pradhan’s antipathy for the officer concerned – ONGC took on Reliance over the “diversion” of natural gas in fields they shared and won. A policy has been announced for further exploration that pleases industry, and at a possible cost of government revenue, which is a brave decision in the current environment. The problem is subsidies: while the UPA’s time-table on diesel has been adhered to, Pradhan’s own inclination to end the liquid petroleum gas subsidy for the well-off has not been followed through, with a ridiculous “voluntary” scheme to give up the cylinder subsidy announced instead. (And, giving it up requires paperwork. The Indian state loves paperwork so much that in order to not take its money, you have to submit proof of address.) And while the kerosene subsidy has been capped, there’s no timeline to end it.
Underperforming
Too many to mention, but these in particular:
Railways (Suresh Prabhu): Prabhu came into office with an enviable reputation. The road forward for the Railways is clear, with at least two recent reports – by committees led by Bibek Debroy and Rakesh Mohan – providing a clear road-map. No action has been taken on these. In fact, I don’t even know if the Debroy Report has been accepted or rejected. Instead of a focus on improving service, on investment and on sustainable financing, we hear too much about little consumer-facing innovations – and, of course, a Rs 98,000-crore bullet train to Ahmedabad.
Finance (ArunJaitley): The ministryis not the disaster it is being made out to be even in BJP-friendly circles. But there’s no question that two under-whelming Budgets later, it hasn’t been the brightest star in the NDA firmament. Sometimes finance ministries are judged on what is beyond their control, so let us judge this one on its most core responsibility: tax reform. It is only now another committee on tax reform has been set up – although the Shome Committee’s sensible recommendations are already known and haven’t been acted on – and we don’t know if it will have any recommendations out in time for the next Budget. The Expenditure Management Commission’s report seems to have vanished from sight. Meanwhile, nobody has been held accountable for the various screw-ups on tax demands and complicated tax forms that marked the past year.
Close to dropping out:
Commerce and industry (Nirmala Sitharaman): An especially grave disappointment. The ministry in charge of trade and ‘Make in India’ is effectively scuppering the programme by being protectionist and distrustful of trade. Its greatest success is a rise in foreign direct investment. But that’s not a consequence of any changes to policy. Even the recent relaxation in FDI norms was, even Sitharaman insisted, “not a new policy”. What should have been a laser-like focus on reducing paperwork and compliance and increasing service efficiency has been effectively diluted by one headline-grabbing campaign after another.
Human resources development (SmritiIrani): Progress on fixing anomalies in the Right to Education: negligible. On expanding the community-college network: negligible. Model schools: passed on to states. Expanding technical education: negligible, or passed on to skills ministry. Performance on raising school standards: abysmal. Performance in Twitter debates and on TV: awesome. Performance in meeting SanghParivar expectations on saffronisation: awesome.
Telecom (Ravi Shankar Prasad): Call quality has declined so much that Prasad is being called “call drop minister” in his native Bihar. A root cause: the inability of the ministry to “harmonise” contiguous blocks of spectrum. Legacy issues are considerable, but too little has been done to overcome them. Instead, the focus is on penalising telecom companies for call drops, a basically unworkable concept. And BSNL and MTNL continue to be a drain on national resources, and Prasad insists on their “revival”.
Would a reshuffle help? I’m not that certain. In several of these cases, the problem is competing priorities – in HRD, the Sangh’s priorities are more important than others, for example; and railways has to waste time thinking about bullet trains. In others, the problem is a basic anti-market philosophy, which is still visible in commerce and industry’s import-substitution focus, the action on call drop penalties by the telecom ministry, and in the civil aviation ministry’s ridiculous decision to try and cap airfares. And wait: what do much of these have in common? Yes; they’re Modi’s priorities and suggestions, too. What’s the point in a reshuffle, then, if the PM remains the same?
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
