With GST launch, Narendra Modi looks for greatness: Four reasons why his timing is perfect

There is a difference between success and greatness. When citizens vote or the media lauds a politician, it can be called a success. But greatness happens when historians take note.

It was clear at midnight on Saturday as a bell sounded to usher in a nationwide goods and services tax (GST) that Prime Minister Narendra Modi was batting for greatness beyond success. And he seems to be blessed by an immaculate sense of timing that enabled such deft political stroke play, not to speak of a by-now-familiar strategy of blending glitz, sound bites and pageantry to draw the world's attention.

Modi left little to imagination as he invoked the Constituent Assembly's inauguration 70 years ago to draft a Constitution in the same Central Hall, mentioning the great leaders of the Independence movement and above all, recounting how the economic union that his government was ushering in on 1 July was in the footsteps of Sardar Vallabhbhai Patel unifying India's fragmented princely states and British territories into a modern republic.

Prime Minister Narendra Modi. PTI

Prime Minister Narendra Modi. PTI

You could almost picture Modi visualising himself on some hazy future date, with his portrait hanging among the pantheon of statespersons in the self-same Central Hall. The state that gave India Mahatma Gandhi and Patel now has a third claimant to national glory.

Looming questions on implementation, the conspicuous absence of opposition Congress in the celebrations, its nitpicking on a bipartisan GST amendment, and the irony of Modi championing the cause that he once criticised as Gujarat chief minister may be for the pessimistically inclined. For the moment, bright lights and big talk carried the day.

It helps that Modi painted an image that would remind people of a World Cup cricket victory blended with a solemnly nationalist occasion. Drumbeats and dances broke out after midnight, with the crown jewel buildings of Lutyens' New Delhi — the Parliament House, the Rashtrapati Bhavan and the adjacent North and South Blocks (where GST dreams were plotted) sparkled with illuminating lights.

Modi's reference to ‘Team India’ was a clue for those less familiar with the labyrinthine details of the GST patchwork to imagine that this occasion was akin to a big sporting win. Modi's talking of a good and simple tax and front page ads that screamed One Nation, One Tax, One Market completed the government's razzmatazz. If there was anything left to say, it was amply done by prime-time anchors burning their midnight LED lamps drawing parallels with Jawaharlal Nehru's Tryst With Destiny speech in August 1947.

There are lingering fears  of an Inspector Raj linked to anti-profiteering provisions of the GST even as Modi thinks this will end, and not revive, the pains that businesses faced prior to the Big Bang reforms of 1991. Whatever the details, the timing of Modi's GST stroke is perfect for four reasons.

1. Global economy is in a big revival phase: The ‘India Story’ is on solid ground after three years of policy reforms to improve the country's ranking in the ‘ease of doing business’ charts, even as interest rate hikes are planned across advanced economies in Europe and the US, signalling a growing hunger for a growth destination. The script that Modi is reading fits perfectly with a general air of optimism and a ‘synchronised improvement’ in both advanced and emerging economies.

2. Low inflation is a boon: Even if pessimists are proved right in GST burdens being passed on to consumers through a cost-push route, the record lows on the inflation front is a cushion that might help Modi weather any shock.

3. Fiscal elbow room improves: If the NDA government changes its financial year to January-December as is widely expected, there are two budgets ahead in which any startup confusion around revenues generated by the GST can be passed off by the government as a legitimate issue in a restructuring phase. That can help the government claim higher revenues and boost spending.

4. Elections are not near: The government has nearly two years to revise or improve any implementation issue linked to GST. Any political opposition to GST may be handled sufficiently before the rhetoric gets louder.

Given all this, Modi can hope to treat GST more like a long-drawn cricket Test match than a time-bound one-dayer. The devil may lie in the details, but for now, God is kind to the government.

(The author is a senior journalist. He tweets as @madversity)

Updated Date: Jul 01, 2017 13:14 PM

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