Shortcut Nation

Change takes long-term thinking. Our politicians only care about short-term optics.

We Indians love shortcuts.

Thousands of us perish every year crossing railway tracks, rather than climbing foot over-bridges. On Delhi’s arterial Ring Road, motorbikes cheerfully dive into the wrong side of a torrential traffic flow, to save driving an extra kilometer. Jugaad is our national ode to patchwork and improvisation.

If there is a logic to crossing railway tracks or driving against traffic, it must lie either in under-estimating risk, or in placing a very low value on one’s life and limbs. Similarly, the make-shift solutions of jugaad can be understood in the lack of cash to fund the more permanent solution. Well-endowed individuals and societies can afford solutions that have a lower life-cycle cost, but need to be funded up-front; the poor are cash-constrained, and opt for solutions that require smaller, more frequent outlays.

Our politicians are by no means poor, but because of the electoral cycle, they, too, are conditioned to take a short-term view of the world. They assume office with five-year plans, and when the next elections loom, their worldview is down to one week, as they rush around to install plaques and launch boats before the Election Commission rules kick in. When deep-rooted problems require solutions that will take years to rectify, there is simply no incentive to get down to the task. Instead there is a tendency to look at what Raghuram Rajan called ‘clever solutions’, which detract “from less attractive, painful reform that is ultimately necessary.”

Think ‘black money’, which has been the subject of government reports since 1956. In his electoral speeches, our Prime Minister promised that he would bring back so much illegal money from abroad that each Indian would find an extra Rs 15 lakhs in his bank account. After the Modi government came into power, much song and dance was made about the strenuous efforts being made. When they came to naught, BJP party chief, Shri Amit Shah, cheerfully informed us this was just an election jumla, never meant to be taken seriously. More fools, us.

The fact remained that Mr. Modi had painted a black-and-white picture of the poor getting robbed by the rich, who don’t pay taxes. His political instinct told him he needed to show he was doing something about ill-gotten gains. At 8 pm on November 8, 2016, he announced ‘notebandi’, or demonetisation. Raghuram Rajan, no longer the RBI governor, had warned that the measure wouldn’t work. Though often “cited as a solution, the clever find ways around it.” This did not deter the government from touting the enormous sums of money that the rich would set afire, or float down the Ganga, and the sleepless nights they would suffer. Rajan should have called his recent book I Told You So, because 98% of the money came back. Millions of lives were disrupted, many lost; supply chains were disrupted, informal jobs evaporated, and the RBI, under its new, more pliable governor, saw its profits plummet.

Immediate economic costs apart, the polarised debate around notebandi shut down discussion of the deeper issues that engender black money. Electoral funding is regarded as a prime motive force for the flow of unaccounted cash. Rather than analyse this complex subject, a token gesture was made, reducing the limit for political donations in cash. At the same time, a deeply insidious measure against transparency was introduced, by allowing banks to issue anonymous electoral bonds, without limit. (And parties are allowed to receive anonymous donations below Rs 2000)

In the Business Standard of Oct 16, finance commentator Ajay Shah wrote, of the current government: “Ministers and officials are keen for action and there is a cult of speed, but there is a distressing performative element.”

Modi is not alone in the desire to be perpetually in costume drama, campaigning for votes from public stages. In claiming to tackle air pollution in Delhi, Chief Minister Arvind Kejriwal demonstrated the same instinct for the showy gesture. The more such diktats throw people out of gear, the better they perform the key task of mass mobilisation. The rhetoric of political theater does not bow to the complexities of policy making.

Delhi’s air pollution has turned increasingly vicious, and the incidence of pulmonary disease spirals every winter, when a range of seasonal factors ensure the Air Quality Index (AQI) is permanently in the ‘Hazardous’ zone. In an excellent paper written in 2015, IIT Kanpur traced the sources of the pollutants, and suggested a range of policy measures to be considered. I read the report with increasing dismay – with our limited state capacity, I could not see how we would enact the necessary measures, and enforce them, across the several states whose economic activity affects the air of Delhi.

Like Modi, Kejriwal loves the morality tale, the simplistic, grand gesture. His response to Delhi’s air pollution was to order half of its private cars – the playthings of the rich – off Delhi’s roads. The IIT data suggested this would achieve little: road dust, against which he took no action, accounts for almost 40% of Delhi’s pollution; all vehicles together contribute between a quarter and half as much. This includes buses, trucks, which were not impacted, and cabs, which got a fillip from the measure. Predictably, Kejriwal’s policy gesture did not move the needle on Delhi’s AQI.

What Ajay Shah wrote of financial policy is true across the political spectrum: “Pulling these things off takes years; we should not crowd out the slow long process of fundamental change by insisting on quick results.”

But our politicians will, and we will.

Jugaad ki Jai.

About the author

Mohit Satyanand

Mohit is an entrepreneur, investor, and economy watcher. He is Chairman of Teamwork Arts, which produces the Jaipur Literature Festival, and has business interests in food processing, education, and a wide range of start-ups.