Gautam Mukherjee
George Danton, a leader of the French Revolution, extolled the virtues of audacity, first, as it is recorded, followed later by Emperor Napoleon Bonaparte, and US General Patton, later still. ‘Audacity of Hope’ was also the name of one of President Barack Obama’s books, much publicised and analysed in the run-up to his first term in office. The word is certainly a morale-booster with its hint of impetuosity. It is another matter that audacity seems to serve only in short bursts.
Narendra Modi, with his spectacular rise from humble beginnings, is probably cut from similarly audacious cloth, though, loner that he is, he mostly goads himself into ever more spectacular performance. But a lot of it so far as Prime Minister has been electoral in nature, inclusive of something of a victory lap through some international capitals gathering pledges of future investment.
The hard, if mundane business of day-to-day governance, and far-reaching economic reform, are yet to receive that audacious touch. In fact, in matters economic and domestic, there is a curious display of an abundance of caution. And his ministerial council appears to be, one and all, marking time and awaiting further orders. Audacity and caution then, in a potentially combustible political mix – where is it all headed?
Others in the party have no doubt played their part, but it is the ‘dynamic duo’ of Modi and Amit Shah that calls all the important shots. That is how it is, and will be, going forward, the tried and tested partnership, cemented by past and impending success.
Both men will give credence to the policy adopted, of going it practically alone in the Assembly elections wherever possible. This, in order to establish BJP firmly as the only national party of governance in due course.
These victories, Maharashtra for its many very useful Rajya Sabha seats, and the moneyed influence from the commercial capital of Mumbai; and Haryana for its glittering Gurgaon District, are definitely prizes well worth having.
But hopefully, soon after the results are announced, and the hosannas have receded, Modi will make bold to pump-prime the languishing economy, waiting on him for specific moves, ever since the BJP won power in May. Consumer price index inflation is down, likewise wholesale price index, the computer-aided design is looking good, but industrial output, and core sector data are languishing. International money flows are in go-slow mode, awaiting developments.
Many things need to be done urgently. Interest rates need to be lowered to bring cheer to business and industry. Labour laws need to be changed. Extraneous taxes on manufacturing have to be scrapped. The linking of General Anti-Avoidance Rule to at least seven per cent growth in gross domestic product, a good move recently announced, is a way of putting it in cold storage. We need more business confidence- building measures like this. The Bombay High Court judgement last week, exempting Vodafone from taxes applied, if left unchallenged, will also send out the right signal. Land has to be quickly acquired for roads, railways, factories, ports and utilities. The legal system needs to become more efficient. The slogans of ‘minimum government, maximum governance’ and ‘red carpet not red tape’, have to be given content to. The list of pending items is indeed very long, because India has never really had an efficient Government before either.
In tackling the ills of our economy, the steadily reducing oil prices are a great and timely boon. Organisation of the Petroleum Exporting Countries members have even begun to disagree amongst themselves on whether to cut prices or production. Oil prices are already in the eighties and tending lower from all-time highs of around $115 per barrel.
Saudi Arabia, the biggest producer, long held fast for an average yield of $100 per barrel, partly because its expenditure was just below its revenue yield at that price. It has now opened the floodgates to lower prices by saying informally that it is willing to take $80 per barrel if need be. Saudi Arabia is contemplating building up deficits instead of surpluses for the first time in decades. This is a changed world of too much oil and not enough demand. Some international brokerages have indicated oil prices will reduce further to around $ 70 a barrel, and Saudi Arabia probably knows this.
Of course, the price at present is still holding up at about $88 a barrel, but Iraq has already followed the theme, with discounts. Venezuela wants to cut production but is not getting any support for its stance from the others. The powerful oil cartels, ruling the roost since the Seventies, is slipping, and prices going forward may well be determined by demand and supply after all.
