More moderniser than market reformer, Narendra Modi relies on his bureaucrats Oct 18th 2014
THOSE who hoped that Narendra Modi would prove a busy liberal reformer as prime minister have so far been disappointed. But that, says Gurcharan Das, a writer and former businessman who now advises the government, is to judge the man by the wrong measure. Rather than being mad about markets, he says, Mr Modi is a strong-willed moderniser, a man who thinks a capable bureaucracy can fix much of what ails India. It is the lesson of Mr Modi’s running of Gujarat, where he relied heavily on his civil service and got public-sector firms to flourish.
But the bureaucracy is very far from capable. Lant Pritchett of Harvard University has described India as a “flailing state” thanks to its rotten administration. Bureaucrats are incompetent and corrupt when they are not simply absent. India struggles to implement even well-found policy. India’s head, in Mr Pritchett’s metaphor, is not reliably connected to its limbs.
Mr Modi appears bent on changing that. In office for only five months, he spends a lot of time with civil servants, preferring to meet them instead of ministers. He and they have been looking for fixes, such as shifting the paperwork needed to open a business onto the internet, or freeing firms from petty inspections. Meetings are said to have a corporate air, with Mr Modi as chief executive. Dates for specific targets—the “deliverables” of corporate jargon—are set. Resistant bureaucrats are transferred. On October 16th Mr Modi announced a big reshuffle, with a liberal reformer from Rajasthan becoming the finance ministry’s top bureaucrat.
Mr Modi presses his civil servants to think big. In August he called for 75m more Indian households to have bank accounts by February. The scheme, called Pradhan Mantri Jan Dhan Yojana, involves state banks and could prove transformational if households get in the habit of using their accounts rather than keeping cash under the mattress. Officials say over 55m new accounts have been opened and nearly $700m deposited. The aim is to increase access to banking in a country where two-fifths of households lack it.
An obvious opportunity is for such new accounts to serve as conduits for the government to distribute welfare as cash rather than, as at present, to supply the needy with wasteful subsidies in kind. It helps that Mr Modi, though once a sceptic, is now an enthusiast for India’s most modernising effort by a mile: Aadhaar, the unique-identity scheme, in which biometric data are to be recorded to create a digital identity for every Indian. This can now be used, say, to open a bank account or get a passport. Some 690m people are enrolled in Aadhaar, the world’s biggest biometric database. The target for next year is 1 billion out of India’s 1.2 billion citizens.