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Thursday, November 26, 2015

LADY LUCK STILL SMILING ON PRIME MINISTER MODI? He may have lost political capital in 18 months, but still has a great opportunity

This week Prime Minister Narendra Modi completed a tumultuous 18 months in Delhi. After winning a historic mandate, not seen in the country in the last 30 years, his party has been rocked by two electoral reverals – one in Delhi in February and the next, more recent, in Bihar.

The political capital that his win had generated seems to have evaporated as a number of experts are now questioning not just his style of functioning but also how the government may have missed a step of two during the 18 month period. 

Experts like Pratap Bhanu Mehta of the Centre for Policy Research and Washington-based Sadanand Dhume seem to suggest that his followers need to mend their way or Modi has to find a way to rein them. Former Hindustan Times Editor Vir Sanghvi says that it is time that the Prime Minister stops campaigning and starts governing. Former Indian Express Editor Shekhar Gupta is convinced that the momentum that the party got after the 2014 is now “fully over”. Research house CLSA’s Rajeev Malik was even more scathing when he said that either the BJP underestimated the complexity of the economic inheritance or overestimated its ability to fix the problems quickly.

But the good news is that some of the luck that is needed to turn the tables on the Opposition, which has suddenly got a new lease of life, has still not deserted him. 

Global crude prices are still hovering at very comfortable levels. India’s crude basket is hovering around the $40/barrel mark. The opportunity to fix the oil sector and the pricing mechanism for energy products is screaming for his attention and he will be found wanting if he chooses not to exercise the option. Letting consumers pay for higher oil prices is one of the ways to keep 2015 fiscal’s $112 billion oil import bill in check.

In July 2008, crude prices had hit an all time high of $147.27/barrel, throwing the UPA government’s finances in a complete mess. Since then it hovered around the $100/barrel mark for several months well into 2012 before the producers flooded the market which consumes about 87-88 million barrels every day, driving down prices to current levels. NDA has been very lucky and it seems, on this front, it will continue to thrive on its luck.

Coal imports have been showing a declining trend for four consecutive months and last week Power Minister Piyush Goyal said that the country will not need to import coal, except for power plants located near the coastal area. Since coal accounts for two-thirds of India’s power plants’ needs, this could turn out to be big change.

With Solar power, NTPC has already received bids below Rs 5/unit and that could prove to be the game changer for India. With its target to achieve 20 gigawatt of solar power by 2020, India will need to better that target to emerge as a renewable superpower on the global stage.

While these look like interesting opportunities, it is now time to talk about the problem. 

Those who still want to still retain control over the direction of policies refuse to let any opportunity go when they can go muscle flexing. Several times when their views are in stark contrast of those of the under-25 teeming millions in the country, the faultlines are clearly visible. It is here that the hothead supporters of the party step in, again, hopelessly out of sync with the reality.

The hotheads sometime reason that their party has the nation’s backing, pointing out to the 282 seats it had in the 545-member Lok Sabha. 

30 years ago, Congress under Rajiv Gandhi faced a similar situation, some of its party members resorted to arson and looting during the anti-Sikh riots of 1984. Brazenly, they party thought it could brush the need for justice. The party managed 404 seats and BJP could manage just two. Five years later, it was reduced to 197 seats and BJP had jumped to 85. 

The nation has given BJP, and Prime Minister Modi, a never before opportunity. As the Congress has learnt, never having got a majority since 1984, the nation can be unforgiving.

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