2024-08-04 - #266 Complex Questions and Easy Answers - Omnivore

# #266 Complex Questions and Easy Answers #Omnivore ## Colophon title:: #266 Complex Questions and Easy Answers type:: [[clipped-note]] tags:: [[&omnivore]] Newsletter url:: https://publicpolicy.substack.com/p/266-complex-questions-and-easy-answers archive:: https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0 date:: [[2024-08-04]] ## Highlights tags:: > India Policy Watch #1: _Jaat Na Poochho Sadhu Ki\*_ [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#505c85ac-9628-48e5-8983-94367e04b382) ^505c85ac tags:: > At various times I have written on these pages the very familiar and now well understood truth about Indian politics. For about four decades now, the fundamental political contest in India has been between forces of consolidation of the Hindu identity largely on the _Hindutva_ plank and the forces that battle this coalescing of sub-identities by highlighting the uniqueness of their aspirations and the fear of being subjugated all over again under a monolith Hindutva project. The genius of BJP and PM Modi in the last decade or so has been their ability to keep the cohering forces of identity consolidation stronger than the natural, centrifugal force of identity division. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#3cd7c857-4ad6-47b3-a396-7e3b476d96ed) ^3cd7c857 tags:: > a well-chosen set of welfare initiatives aimed at the poor allowed the BJP to build a much wider Hindu coalition, which worked like a charm in the 2019 elections and held its own since then in various state elections. Till 2024 happened, and it hit what seems like the limit of the consolidation strategy. So, the question is, has the BJP maxed out on this? To answer this, let’s understand the factors that helped it in the unprecedented consolidation of Hindu identity for electoral gains and how strong they are in today’s context. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#4df39537-881f-4c17-a63c-1df018c783cb) ^4df39537 tags:: > The first factor was the way PM Modi came to represent the most potent challenge to the entrenched power structure of Indian politics. Everything from dynasty politics, secularism, minority appeasement, corruption, lack of accountability, poor execution - all the reasons that ordinary citizens believed held India back were the target of PM Modi’s attack. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#3e223b56-01f5-4ac3-99f9-086f072561e6) ^3e223b56 tags:: > But ten years of being in power, especially the very personalised way that he has governed has blunted his outsider, challenger persona. You can still speak of 60 years of Congress misrule and rally your supporters but there’s a new generation that has grown up seeing you as the representation of power structure. Further, you have to defend your own track record of a decade that has missteps, which gives the opposition reasons to show you as part of the problem rather than the solution. And this will continue to weaken every additional day you are in power. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#1e5c36e3-2d6e-4bd8-89ac-a05d620452e1) ^1e5c36e3 tags:: > I expect a significant emphasis on these in the coming days. Expect more ED raids on opposition on corruption charges, targeted legal attacks on non-mainstream media stars who speak against the government and more emphasis on the _fakiri_ image of the PM. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#ac77463e-71d0-4ce5-b872-6eb494dff389) ^ac77463e tags:: > That apart, the other factor that helped in majority consolidation in the past decade was the new and innovative ways to blame the “other” for everything plaguing the nation. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#84284f6f-100a-40dc-b6ad-ce1e2a097fcf) ^84284f6f Is this really new, though? tags:: > problem is that of diminishing returns. Until the temple at Ayodhya wasn’t built, you could milk the issue. Once it is built, you cannot live off that credit forever. People move on to other things. Similarly, you can rile up the people with ‘Hindu jaag gaya hai’ once to get things done. Build a temple, muffle comedians who joke about Hindu religious figures, change the history textbooks or whatever else catches your fancy. But once the majority is awake, how do you send it back to sleep for it to be roused again? The problem of getting a large part of your majoritarian consolidation agenda done is what do you do after that? [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#2353aadb-950a-4d97-8d63-218d9a454d41) ^2353aadb tags:: > Lastly, there’s the question of the economic benefits that the sub-identities who have been consolidated get for participating in the project. After all, a temple or a legislation isn’t going to make their daily lives or the future of their children better. So, two questions come up. Is the economic pie growing well and is it getting distributed equitably among those who joined this monolith? [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#4d1c3c28-d098-4a4c-8a3a-5b5c84ee3db2) ^4d1c3c28 tags:: > As you can see, the deck is stacked against the forces of consolidation. It will require some kind of genuine political masterstroke to continue with the consolidation. The conservative option for the BJP is to realise this difficulty and focus on rebuilding alliances with partners. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#50712b13-e11c-47d1-b9ba-5853b03d488f) ^50712b13 tags:: > Left to itself, all the opposition needs to do is to do what it is doing. Let the limits of consolidation come into play and wean away one sub-identity at a time from the consolidated base. Politically, it is a no-brainer to do this. But there are consequences to this approach. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#006f941f-78cd-4570-9298-840a2adf006d) ^006f941f tags:: > delivering social justice through its arithmetic runs the risk of the Balkanisation of all political formations into smaller caste-based interests. Then, there is the risk on the economic front. Faced with the risk of disaggregation of their vote base, the current government could double down on redistribution to stem the tide. Redistribution, like we never tire of telling, should follow growth. Not come before it. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#f4dcb57e-b376-4d3f-a244-620564c49cd7) ^f4dcb57e tags:: > The corollary to this is the opposition gets wedded to these ideas that are good politically to upstage this government but terrible if you actually follow through on them when in power. That should worry anyone who is looking forward to this sequel. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#8770b6fc-6b04-437f-8e26-54d4c09138a6) ^8770b6fc tags:: > Addendum [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#71514908-a070-4baf-999d-8f9f89226404) ^71514908 tags:: > I find it odd when people argue that reservations should be retained regardless of income level because ‘increasing one’s wealth doesn’t address the problems of historical marginalisation’. In fact, such an argument is an admission of the fact that quotas are a grossly inappropriate tool. The whole premise of reserving economic opportunities for individuals from historically marginalised backgrounds is to compensate for past social injustices through economic and political means. Of course, that will never set right historical injustices by itself. If addressing historical injustices were the aim, the State could deploy other tools. Perhaps the law banning untouchability alone would suffice. Or maybe it needs to be supplemented with a South African-style truth and reconciliation commission. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#2ec7eadf-7ab3-46c5-97e8-44953523a626) ^2ec7eadf tags:: > To argue that reservations for jobs cannot set right historical injustices but should nevertheless continue across generations is convoluted logic. You can’t argue for correcting past injustices through favourable economic opportunities while arguing that better economic opportunities can never address past injustices. Because if you do, quotas become a policy with an undefined _output_ (measurable target) and an undefined _outcome_ (the desired long-term social change). A discussion on alternatives to quotas should definitely be welcomed from a public policy perspective alone. No policy made seventy-five years ago can be defended on the grounds that improving it isn’t possible. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#46f45166-c46d-4927-a969-79121de3674a) ^46f45166 tags:: > India Policy Watch #2: Promise vs Reality [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#b0a0c652-57a7-4595-8c8f-c6a02b2387cf) ^b0a0c652 tags:: > A defining characteristic of low state capacity is the difference between funding promises and funding deployment. In other words, ex-ante Industrial Policy promises can be orders of magnitude higher than the actual disbursement. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#61d1df2b-4565-438b-abde-5aa6a5273360) ^61d1df2b tags:: > This is a typical problem with the umpteen (fourteen, to be precise) Production-linked Incentive schemes. Out of the promised outlay of ₹1.97 lakh crore, the actual cumulative disbursement has only been around ₹9500 crore, i.e. 5 per cent of the total outlay. If the government were to continue at this run rate, it would take another twenty years for the promised outlay to be deployed. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#f88b81fa-b07d-435f-be35-7fcc5c83eab7) ^f88b81fa tags:: > reasons for this vast gap are twofold. In the first stage, ministries promise hefty PLI outlays to signal their relative importance—the more the outlay, the more prestige they get. These outlays span across multiple years. Given that budgetary allocations are done on an annual basis using cash accounting principles, the PLI outlay figure is a pie in the sky. Sometimes, these outlays don’t figure even in budget estimates because the line ministries can’t even get them off the ground. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#5a7b5f5e-f11b-4bd6-a8d7-f9e2453450cc) ^5a7b5f5e tags:: > Secondly, even when budget estimates take PLI expenses into account, the actual disbursements often fall far short of them. This can be due to investment delays by firms, bureaucratic delays in approving PLI claims, or both. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#f67e3018-e596-42dc-b28e-7c7daeed5620) ^f67e3018 tags:: > Nowhere is this difference between ex-ante Industrial Policy promise vs on-ground reality starker than in semiconductors. The government promised a $ 10 billion (₹76000 crores) incentive package in December 2021 with much fanfare. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#44f33638-c1ec-4f93-8692-e2950cc3a1ed) ^44f33638 tags:: > The above chart contains all budgeted and disbursed amounts thus far. The government expects to disburse a total of ₹11419 crores, or 15 per cent of the promised outlay, by the end of this financial year. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#952e7fab-67b3-4bf4-b050-1cc6c1c6a468) ^952e7fab tags:: > These incentives aren’t going to be disastrous, as much of the recent commentary judging these fantastical outlays only on the basis of the jobs they create indicates. Neither are they putting India on the path to becoming a manufacturing superpower. These subsidies can, at best, be described as cute solutions pretending to address a much deeper problem. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#620ac908-8018-4779-9be1-9de30a10b3e5) ^620ac908 tags:: > \[[Paper](https://substack.com/redirect/defa29be-9c82-4395-bee4-7028f44f7cad?j=eyJ1IjoiZHI5OW4ifQ.TkB5aaK3urcRAoIqMo7i4RAYnb5GuIc-u8FFruB7GjU)\] This paper on the economics of the Summer Olympics is worth a read given that India is planning to submit a bid for the Olympics next decade. [⤴️](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0#bfa23926-445e-40bc-adf5-77dcbdba102e) ^bfa23926 [Read on Omnivore](https://omnivore.app/me/266-complex-questions-and-easy-answers-1911b330ab0) [Read Original](https://publicpolicy.substack.com/p/266-complex-questions-and-easy-answers)