MON, MAR 02 2015. 12 24 AM
The NDA has exhibited two qualities: it has not cared about the intellectual property of ideas and it has worked hard on executing them Anil Padmanabhan
Arun Jaitley in his first budget had accelerated the process to transfer money for centrally sponsored schemes directly to the states, which was started by his predecessor, the UPA’s P. Chidambaram. Photo: PTI
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A key takeaway of the Union Budget presented by finance minister Arun Jaitley over the weekend is the acronym JAM. It stands for Jan Dhan (bank accounts for all), Aadhaar (unique identity for all) and Mobile (phone). Two of these, Jan Dhan and Aadhaar, are legacies of the Congress-led United Progressive Alliance (UPA); and so is the message for targeting of subsidies to reach those who deserve it by enabling JAM. But from the way things look, it will be the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) that will be credited with the likely success of JAM’s implementation. What could the NDA do that the UPA could not? In one word, execution. Ever since it took charge, the NDA has exhibited two qualities. It has not cared about the intellectual property of ideas (Jaitley himself put it most succinctly in the Rajya Sabha a year ago after a Congress member accused the NDA of stealing its ideas: “There is no copyright on good ideas”). Second, it has worked hard on executing these ideas, embracing them as they were its own. The other good news is that there is a clear continuity of policy thought between two otherwise ideologically opposed regimes; which can only mean a good thing and also rest fears about how reform initiatives will be reversed by fringe elements of the BJP.
The policy continuity sounds ironic given the ongoing rhetorical exchanges between the NDA and the UPA over increasing foreign investment limits in insurance—something that was first proposed by Yashwant Sinha in the previous stint of the NDA and rejected by the UPA; and then proposed by P. Chidambaram when the UPA was in power and duly rejected by the NDA. Take Aadhaar for example. It was an idea which was first proposed by Arvind Virmani during his stint with the Planning Commission. He was tasked to head a working group of the 11th Plan and it eventually submitted its report “Entitlement Reform for Empowering the Poor: The integrated Smart Card System” in November 2006. A key recommendation was that such a scheme should be premised on the Unique Identification Number (UID): “The concept of a unique national level citizens’ identity number developed from these initiatives as well as aspirations for a Pan-India e-governance system. This unique ID could form the fulcrum around which all other smart card applications and e-governance initiatives would revolve.” This was eventually productionized under Nandan Nilekani, a former CEO of Infosys Ltd, and assumed the name Aadhaar. Unfortunately, Nilekani was severely distracted by the resistance from within the UPA. Eventually, it took the intervention of Congress president Sonia Gandhi to get some of the senior ministers to back off, with the idea just a whisker away from being aborted. Thereafter, the Congress went to the other extreme and owned Aadhaar, shaping it as a political weapon to enable cash transfers (Apna paisa, apna haath). It had, however, left it too late. The alleged misdeeds in office were getting far more attention than the cash transfer idea.
Once again the UPA had failed in executing what was otherwise a brilliant conceptualization of an idea by Nilekani. Same is the case with the idea of economically empowering states. It was Chidambaram, who in his final budget moved ahead to transfer money for centrally sponsored schemes directly to the states. Jaitley accelerated this process in his first budget.
Subsequently, he embraced the recommendations of the 14th Finance Commission—which enhanced states’ share in the centre’s net tax receipts to 42% from the existing level of 32%—and in the process etched his spot in India’s modern economic history. From now on, states are considered equally fiscally responsible as the centre and hence free to spend the money to suit their local social agenda. At a broad level, the big difference between the UPA and the NDA is the leadership. There is no ambiguity about who heads the NDA, unlike the dual power sharing arrangement—between prime minister Manmohan Singh and Congress president Sonia Gandhi—pursued by the UPA. It is as a senior BJP minister recently admitted in private. “Every time I have engaged Manmohan Singh I have been struck by his erudition. He was probably the most hard-working person in the UPA government. Yet, none of it seemed to permeate into policy.” A lesson I wonder if the Congress has absorbed. Not even after its crushing defeat in the 16th general election. Anil Padmanabhan is deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com. His Twitter handle is @capitalcalculus.
