While excellent newsletters on specific themes within public policy already exist, this thought letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways. If this post was forwarded to you and you liked it, consider subscribing. It’s free. India Policy Watch #1: No One Knows AnythingTalking policy in India— RSJNo one saw it coming. Not me, for sure. That the BJP won’t muster up a simple majority on its own seemed an impossibility going into the elections. But the great Indian electorate had other ideas, and here we are in the 18th Lok Sabha, where the BJP with its 240 seats, will need its motley group of coalition partners to run the government. I’m sure you haven’t been starved of post-election analysis so far to look forward to another one on these pages. But you have no choice except to read through my take. Any analysis of a national election in India runs the risk of searching for a grand narrative that explains the mandate and the moment. The problem that bedevils every such attempt is the set of stark exceptions that are immediately available to counter any narrative. You think people are tired of Hindu-Muslim rhetoric looking at the UP results, and you are presented with data from Uttarakhand, MP and Gujarat. The Agniveer scheme has created resentment against the BJP in the eastern UP, but that doesn’t align with the NDA performance just across the state border in Bihar. This kind of thing is endless. Only after all the polling data is available and some rigorous analysis is done on those datasets will we come to a few statistically significant and consistent conclusions. Till then, every post-mortem is good old kite flying. With that caveat out of the way, let me dive into armchair analysis. There are five conclusions that I take away from these elections. First, this government had created, possibly, the most favourable set of circumstances in the history of Indian elections to win in a canter: a fawning media that had built a cult of personality that was unprecedented, huge funding advantage for fighting the polls that showed up in the skew of media ads favouring the ruling party, use of investigative agencies like ED and CBI to make lives of political opponents difficult, freezing bank accounts of opposition parties, keeping inflation under check, timing the big emotive issue like the inauguration of the Ram temple in Ayodhya to perfection; using every event, every news item to play up the story of India being a vishwaguru and entering into Amrit kaal and finally the ab ki baar, chaar sau paar cry that was meant to convey the inevitability of the outcome. You couldn’t do any better than this in building a mahaul as they say. There was hardly any reason for opposition party workers to go out canvassing for votes faced with this tsunami of odds. Yet, the BJP ended up with 240 seats. And one shouldn’t forget the almost universal popularity of PM Modi and his draw among voters especially in urban areas. It will be safe to say he is easily the sole reason for winning in anywhere between 60-80 seats. So, the question is what happens in 2029? How easy will it be to top the mahaul that was built for 2024? Will PM Modi, aged 78 then, be the same force after the sheen of invincibility that has been diminished in this election? And what will be the BJP’s answer to the question of succession planning in 2029 as that will be a question that will be asked with more vehemence than it was asked in this election by Arvind Kejriwal. Whichever way you look at it, the run-up to 2029 will be a far tougher course. Second, it will be interesting to see if there’s any real succession planning in light of the above challenge. The problem of any such planning in a heavily centralised form of leadership style is two-fold: a) there is no natural process of arriving at a successor based on performance and acceptance among party workers. Every post within the party or in the government is a proxy for the leader. b) since the centralised model of leadership is deeply internalised, no one is willing to let someone else be seen as a successor because, unlike in ‘normal’ democracy, it will be impossible to dislodge a leader once entrenched. These were the reasons why Congress could never find a successor outside the family to run the party. Who will want to let someone else take control of a setup where the design is to concentrate power deeply in one hand. BJP will be in the same boat without a family line to fall back upon. And to expect the current leadership to change and decentralise power in order for a successor to emerge naturally is a bit much. It goes against the natural leadership instincts of those in power now. A fratricidal scuffle and some kind of splintering is inevitable and some of it might have already started playing out if the results in UP are anything to go by. Third, a lot has been made about how the results suggest a return to politics of identity or recognition based on the caste arithmetic that Akhilesh Yadav could manage in UP. In my view, it is not about what he could manage but more about the nature of the politics of recognition. The BJP, like the Congress in the past, would like to create as big a tent as possible to bring all kinds of identities together under it. For the BJP, the basis for such a tent has always been Hindutva, which, in an ideal scenario for them, would consolidate Hindus cutting across caste and community lines with them. The basis for holding them together is some notion of ‘enemy’, which could be the Muslims, Pakistan, Leftists or the West who want to keep India down. The problem with any such large tent, which continues to get bigger and where the attempt is to meld them all into a single identity, is a simple and obvious one. After a while, there isn’t enough fight left in those outside of the tent, and soon, people within the tent realise their old identities aren’t receiving the recognition they should. Because more dominant identities than them are cornering most of the benefits. There’s a natural limit to how big a tent you can make before it starts splintering. And to help it splinter, you need an opposition party that’s able to remind them of what they are missing out by going to the big tent and melding their identity into a common pot. This is what happened in UP. There was an undercurrent of the need for recognition among those who had moved to the big BJP tent, and there was also a political leader or formation that could tap into that desire. It is possibly there in other states, too, but it could not be tapped into by a smart opposition. It would be foolish to assume this will last till 2029. Fourth, the two primary allies of the BJP in the NDA won’t get in the way of the economic agenda of this government beyond asking for special status for their states. There is no strong ideological orientation to statism among these parties and they aren’t far away from the BJP on it. That apart, the momentum of the economic agenda set over the last two terms will carry through for some time even if newer, bigger ideas aren’t on the table now. The non-economic agenda is where the allies will weigh in more. This will include everything from UCC, reservations, delimitation, federalism and a point of view on the cult of personality. Now this might not be a negative for the government overall. A concern among long-term investors about India is always about how strong will its democratic institutions remain to support rule of law and fairness in relationships. And a coalition offers the best check on attempts to weaken institutions. In that sense, I suspect after the initial turbulence, we might see more long-term interest in India. Lastly, the nature of a coalition government is that the allies will never be sated. The more you yield, the more they will ask. And that ask will be tempered by electoral performance in the interim of the BJP in the assembly elections that are due over the next couple of years. The assembly elections that are due at the end of 2024 ( Maharashtra, Haryana, Jharkhand), therefore, assume a very different significance now. A continuation of the trend where the BJP loses ground in these states will embolden the allies which will then require further yielding of the ground. This will be totally new territory for this leadership. Things will only get interesting from here on politically. To that extent, it will have some impact on the economy. But the past 33 years have shown we have managed to stay on course on a broad economic consensus. That will continue. On the balance, as I wrote earlier, elections are a great disciplining force in a democracy. They shouldn’t become a mere formality, especially in India, where the state has disproportionate power and monopoly. When the disciplining force works, like it did last week, it can only be good for a democracy. ** I will leave you with a couple of extracts from Devesh Kapur’s piece on the results in Foreign Policy on why dominant parties fade:
Thanks for reading Anticipating the Unintended. Subscribe for free to receive new posts and support our work. India Policy Watch #2: Thinking Through Agniveer2.0Talking policy in India— Pranay KotasthaneFor someone like me who observes politics through rose-tinted glasses on even-numbered days, the election results can be interpreted as a sign of homeostasis. Homeostasis means self-correction. The human body has several self-correcting mechanisms that prevent it from going off track. Observe how the average body temperature is maintained at around 37 degrees Celsius. If the body gets too hot, we sweat, thereby lowering our body temperature. If it is too cold, blood circulation to our skin reduces, thereby minimising heat loss. Those familiar with control systems literature will relate this concept to negative feedback loops that induce stability. We can apply this concept of homeostasis to a variety of social phenomena. If market forces of supply and demand are allowed to operate, for instance, they can stabilise prices without runaway effects. So, one optimistic post hoc analysis can be that after some years of diversion from the mean, our political system is finally restraining runaway tendencies towards centralisation and reverting to the mean of consensus-building. Folk political analysis apart, an important policy question for the incoming government will be the Agniveer scheme’s future. The narrative that this scheme hurt the NDA’s electoral prospects has gathered steam. The spokesperson of a key coalition partner has said on record that the scheme has upset some sections and must be altered. Thankfully, he is asking for an alteration and not an outright cancellation because the scheme is addressing a vital public finance problem. Here are a few possibilities. The ContextThe quality of defence expenditure in India has worsened over the past couple of decades. The One Rank One Pension (OROP) scheme further meant that the personnel costs would eventually become fiscally unsustainable. By FY20, the defence pension expenditure had exceeded the outlay marked for defence equipment purchases. Meanwhile, worsening relations with a technologically superior power made India realise that merely spending more on a human-heavy force is of no use. Its forces need to make a decisive shift from ‘humanpower’ to ‘firepower’. Around the same time, COVID-19 happened, which meant that the normal cycle of armed forces recruitment was paused. In these circumstances, the government was earnestly looking for reform ideas. Of all the ideas on the table, it chose the most disruptive option, one which would lead to a significant drop in personnel costs in the least amount of time. That idea was a ‘Tour of Duty’ scheme under which only a quarter of the recruits would be retained for permanent service. The logic seemed sound — introduce exit ramps to improve the quality of personnel. Except that the government did this in conjunction with a sudden drop in the overall hiring. There was hardly any recruitment during the pandemic, creating a gap of approximately 1.7 lakh positions that weren’t filled by June 2022 (nearly 66000 retire every year). However, all that the aspirants got was 46000 Agniveer positions that year, with a one-fourth probability of securing a permanent position. Possibly, the government wanted to achieve two goals at once— immediately reduce the size of the standing army and change the quality of future defence expenditure by breaking the link between an armed forces job and an assured OROP pension. Overall, the government tried to achieve way too many objectives with one instrument without aligning the cognitive maps of people who felt entitled to land a soldier’s job. That led to massive protests in 2022, which we covered in edition #173. Options Before the Government as of TodayThere are two broad forks available. One is to cancel the Agnipath altogether and instead move all future soldiers and officers to the National Pension System (NPS). NPS is a defined contribution scheme where the pension is paid out of a corpus the government and the soldier co-contribute to, quite similar to the Employees’ Provident Fund. This method is unlike the current approach, in which the government promises a lifetime pension to armed forces personnel and finances it by raising taxes from current and future citizens. This option would require a few years to fructify because the thinking required for an NPS customised for the short service tenure of soldiers (15-20 years) and a higher risk profile hasn’t been developed yet. Given that the government didn’t pick this option the last time around, a full rollback of Agnipath seems unlikely. That leaves us with modifications in the Agnipath scheme, of which a few variants are possible. First, the government could increase the proportion of people being retained for permanent service from the current 25%. To make this fiscally sustainable, this move would be accompanied by a reduction in the ‘SevaNidhi’ package received by soldiers exiting after their four-year service term. Not happening. Or it could increase the intake for a few cohorts to increase opportunities. However, this would depend on military preparedness requirements and the scaling-up of training capabilities. Both of these alternatives don’t seem enough to win over the votes of people who blame the government for snatching a permanent job away from them. A third option is to retain soldiers in the national security system (in state and central paramilitary forces) after their four-year term ends. This applies to the 75 per cent of Agniveers per cohort who otherwise face an uncertain future. Soldiers who land a job in the paramilitary forces will not receive their ‘SevaNidhi’ package until they quit the paramilitary setup, after which they will also receive direct contribution pensions as all paramilitary force soldiers currently do. Apart from reducing the pension burden for the government, this option can fill critical personnel gaps in State and central armed police forces. However, realising this option requires extensive coordination with other state governments, not a strength of the current dispensation. Whichever path the government chooses here on, it should come clean and explain the fiscal reasons for this reform. HomeWorkReading and listening recommendations on public policy matters
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