Most of the assessments of Narendra Modi's first year in office have focused on his hits and misses. There are useful lessons to be learnt from hindsight, but the real lesson to learn is always this: the next war cannot be won with the tactics and strategies learnt from the last war. The battlefield scenario is constantly changing, and so the successful general focuses on what he needs to do now in the emerging context, and not on what he could have done differently the last time he fought a war.
The one thing Modi can learn from his first year’s experience is something no will tell him about: do less, not more. He should not launch so many initiatives that he under-delivers on most of them. This way, he will be a sitting duck for his opponents, who can pick and choose his failures to paint him as a gasbag who talks more than he acts. From Jan Dhan to Niti Aayog to Namami Gange to Make in India to Jan Suraksha to Swachch Bharat to Smart Cities, to bullet trains, to Sagar Mala and the pursuit of black money - to name only some of Modi’s trademark schemes and catchwords from Year One - Modi's biggest risk going forward is failure due to initiative overload.
He will surely fail substantially if he does not imbibe the central message of effectiveness as enunciated by late management guru Peter Drucker in The Effective Executive. Since Modi's government is driven by the idea of an Executive Prime Ministership, he has to focus, focus, focus.
The central message of Peter Drucker's book is to "get the right things done", and this means focusing on the one or two things that matter, and not spread executive time too thinly over many objectives. Drucker reckons that no executive can be successful if he or she focuses on more than two goals at any one time.
The challenge for Modi is clear; in the next four years, he has to put his signature on and deliver in spades on the one major objective that is supreme. He has to choose secondary objectives that support this one over-arching goal so that he has a chance of being re-elected in 2019.
The question then is simple: what is the most important goal to achieve that will ensure his re-election? This question necessarily has to be political, but it is also pregnant with economic content.
The one over-arching goal of Modi’s prime ministership is jobs. If he can revive growth in such a way as to create plenty of jobs everywhere, India will vote for him again. Toilet-building, cleaning the Ganga and Make in India will mean nothing without jobs.
The central theme of the remaining four years of the Modi government must thus be job creation through enabling executive and legislative action. Modi has to use each succeeding year to define the secondary objectives that will support his primary objective of jobs.
The UPA failed miserably in job creation because it focused on entitlement over enablement and empowerment, doles and handouts over skills and employability. It threw sand in the fuel-tank of an already stalling economic engine with its growth-sapping land bill, trapping millions in low-income agriculture, even while placing roadblocks to industrial growth.
So, Modi's work in Year Two is to think, speak and act only on jobs, jobs and more jobs. Every action of his must have jobs as his theme. The corollary to this theme is that Modi must be directly involved in achieving this goal; when it comes to other objectives, he should empower and devolve it to competent ministers.
Five ministries hold the key to delivering jobs growth. These are railways, surface transport, rural development, defence and finance, which is the enabler of productive government spending.
This means Modi must preside over two cabinets - the general cabinet which will have all ministers (as now), and a jobs super-cabinet comprising himself, Finance Minister Arun Jaitley, Transport and Ports Minister Nitin Gadkari, Railway Minister Suresh Prabhu, Rural Development Minister Rao Birendra Singh and Defence Minister Manohar Parrikar.
This super-cabinet must be driven to achieve very high stretch goals as quickly as possible. The turnaround must happen this year, so that the economy is chugging along nicely by 2019. Luckily, all the members of this super-cabinet are competent individuals.
Gadkari, whose dynamism as Maharashtra PWD Minister saw huge infrastructure development during the Sena-BJP government of the 1990s (the Mumbai flyover building programme and the Mumbai-Pune Expressway were his big achievements), has to raise the rate of national highway building from 12 km a day currently to 25-30 km. This will create millions of jobs over the next two years. He can also corporatise ports and build mini smart cities in excess port land. Whether Modi's main smart cities programme takes off or flounders on the rocks on state-level and bureaucratic incompetence, Gadkari can get his mini cities kicked off as he already owns much of the land required and in the right places. Using the Drucker principle, Modi’s brief for Gadkari is to get national highway building up to 30 km a day, and develop 12 port cities by 2015, as reported by Economic Times. Gadkari seems upto the task.
Suresh Prabhu has to make the Indian Railways the engine of growth by investing in new tracks, high-speed freight corridors, and extend the rail network. What Vajpayee did with his Golden Quadrilateral national highways project, Prabhu has to do with the railways. We need a Golden Quadrilateral Rail Network by 2019. An efficient and fast railway network will do for the Indian economy what the telecom revolution did for us in the first decade of the 21st century. Rao Birendra Singh has to build rural roads and get the Land Acquisition Bill passed so that infrastructure can be built and farmers provided higher paying jobs outside low-value agriculture. And yes, while building rural roads is a no-brainer, he would do well to reposition the Land Bill as a jobs and incomes effort, and not about confiscating the poor farmer's only asset. If the Rajya Sabha defeats the Land Bill, the Modi government should appear suitably apologetic and return with a new farm incomes and land-for-jobs bill focused on improving the lot of the rural masses, with land acquisition being a secondary objective (read more on what could be done here). If Birendra Singh improves rural infrastructure, rural wages will start rising again, reviving demand and rural spending power. Another growth engine would have been kickstarted in the process.
But what is a defence minister doing on the jobs super-cabinet? Simple: defence is the easiest sector to kick off a Make in India and manufacturing revival. Parrikar has to use his defence budget to build more armaments projects in India - from guns to tanks to howitzers to fighter aircraft to warships and submarines. Modi's Make in India has its best chance of success in defence because unlike normal manufacturing industry, which has to be competitive and profitable (and also require land, which may become expensive), industries in the defence business need to pass only one crucial test: whether they are good for national security or not.
India has for too long been importing defence goods and armaments, spending huge amounts of foreign exchange and helping jobs elsewhere. Making defence items in the country will not only make us less dependent on foreign suppliers but also boost local manufacturing and improve our ability to develop and absorb high technology. Remember the ability to make war has huge beneficial impact on civilian technology. It is worth recalling that the internet itself was the creation of the US defence establishment.
Arun Jaitley's main job, apart from passing the GST bill, will be to raise resources for helping his four key spending ministers to invest in projects and create jobs. Jaitley has to facilitate the shift of government spending from wasteful subsidies to productive investment. This means he has to speed up the disinvestment process and recapitalise banks quickly so that the capital spending and lending cycle can be revived quickly.
Modi's political future depends on these five ministers - Jaitley, Gadkari, Prabhu, Parrikar, and Birendra Singh.
A super-cabinet with jobs as its only focus is both a political and economic imperative for Modi. Good politics can then drive good economics.
Year Two goals for Modi are thus clear: drive spending on job-creating infrastructure, with the finance ministry providing the support function of raising money and easing rules for business.
The rest of the ministers should be given broad objectives and empowered to achieve the same through quarterly reviews. If they deliver, it would be an icing on the cake; if they don't they will not queer the pitch for Modi since the real delivery will be on jobs. Only Modi can deliver this.
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Updated Date: May 26, 2015 22:18:41 IST