Long Read: Why BJP Needs An Independent Political Offspring Just To Own The Narrative On Wealth Creation

Only last week, the Haryana Pollution Control Board issued a voluntary closure notice to 228 factories across the state for violating the pollution norms. One of these factories was the Hindustan Syringes and Medical Devices Ltd (HMD), responsible for the production of two-third syringes in the country.

While the Union Ministry, immediately, swung into action, seeking exemption for the HMD plant, questions must be asked of the state pollution control board and the procedures governing it, for what else explains the sanity behind shutting HMD in the middle of the pandemic and 227 other factories just as the economy is beginning to recover?

Not long ago, it was reported that as many as 438 infrastructure projects, each worth at least Rs. 150 Crore, were facing significant delays, resulting in cost overruns to the tune of Rs. 4.3 Lakh Crore. Of the 1,670 projects monitored, 438 had cost overruns, 563 were plagued by delays, thus pushing the cost of completion to around Rs. 26 Lakh Crore from around Rs. 22.5 Lakh Crore.

Of the 563 delayed projects, 127 projects had a delay time of 5 years or more. The major reasons cited for the delay were delay in land acquisition, obtaining forest and environmental clearances, and lack of infrastructure support.

Earlier this year, during Diwali, the government in the national capital put curbs on gatherings and sale of firecrackers in the name of tackling pollution and Covid-19. The curb had a domino effect on the sale of other goods in the markets, and even the hospitality sector, beginning to recover from Covid-19.

The desperation to sound politically correct on the issue of climate change came close to wiping out the entire firecracker industry in India. Similar curbs were extended to the construction sector as well, further adding to the uncertainty. As was the case with the Sterlite plant in Tamil Nadu, the judiciary backed the ban on firecrackers, and went as far as suggesting that a lockdown was needed in the region of NCR!

Now, a few stories from the other side.

In the last 10 years, China has created more than 26,000 kilometres (km) of dedicated high-speed railway (HSR) lines. China’s HSR lines alone constitute 66 per cent of the HSR lines across the globe. As per a report from 2018, China then had 26,869 km HSR lines in operation with another 10,738 km under construction. In comparison, the next best was France with 3,220 km HSR lines in operation with 125 km under construction.

In 2016, as it was reported recently, Apple’s Tim Cook signed a five-year agreement with the Chinese government promising investments, business deals, retail stores, manufacturing plants, and other skill development programmes in the country worth $275 billion.

For Apple, the motivation was to get rid of the disruptions that came from the CCP, especially with respect to the regulatory framework. Post-2016, Apple made some changes within the Apple Maps for some islands in the East China Sea, and during the Hong Kong protests, even took down an app that helped protesters. However, Apple is just one of the scores of companies lobbying in the White House on behalf of Beijing.

Post-Covid-19, China, anticipating the vulnerability of both the supply chains and sanctions from the governments in the West, increased its investing heavily in the semiconductor industry, to the tune of $1.4 trillion across the next five years. China has not restricted itself to semiconductors alone, but made massive investments in Africa and South America, ensuring an undisputed supply of rare-earth metals for its other industries, especially electric vehicles (EVs).

In India, a common mistake made, in evaluating China, is to view its development and evolution as an economy through a Western lens. That 'China is not a democracy and hence it is bound to implode sooner or later', is a common notion. Interestingly, this was the notion the West held after the 1991 Tiananmen Square fiasco, and the integration of China in early 2000s to the World Trade Organisation, and very recently, after the outbreak of Covid-19.

The other problem when it comes to China is that the focus is more on their political system than the reforms undertaken for wealth creation. Not to say that China is without its set of problems, but then that is unique to every country, including India, or the European states, or the United States.

Before the pandemic struck, the Prime Minister spoke about India being a $5 trillion economy. Even though ambiguous, the goal showcased intent, rightfully so, to give China a run for its money. However, in a post-pandemic world, this pursuit will require some hard decisions and the capacity to compete with China cannot be built by reckless state-support for everything under the sun.

To visualise how India and China will look 10 years from now, the author indulged in some back of the envelope calculations. For the sake of argument, assume the exchange rates to be more or less the same for the next ten years.

Assuming India is a $3 trillion dollar economy in 2022, and grows at 8 per cent until 2031, it would be a $6 trillion economy. An achievable goal, yes, but if India were to unleash some of its untapped potential, mainly through infrastructure, privatisation, and other reforms, and grow at 10 per cent for the same period, it would be a $7 trillion economy by 2031.

Let’s assume the worst for China within the same parameters. If China, being a $15 trillion economy in 2022, were to grow at merely 2 per cent for the same period, it would be an $18 trillion economy by 2031. At 3 per cent, 4 per cent, and 5 per cent, it would be a $19.5 trillion, $21.3 trillion, and $23.2 trillion economy respectively. Even with all its faults, China is expected to grow anywhere between 3 to 4 per cent for the next ten years, pushing its economy closer to the US.

For India, to get anywhere remotely closer to China growing at 2 per cent, it would need to grow at 20 per cent, for 10 years. Clearly not happening.

Thus, India’s best bet is to grow at 10-12 per cent, aim to become a $7-$9 trillion economy by 2031, and as China enters an age of new leadership and weakening demography, use the window to up the ante, and the BJP government in the Centre is best suited to undertake this herculean pursuit. However, for reasons good or bad, there is a limit to what the party can do, as the recent repeal of farm laws showcased.

The three farm laws were a universe more than merely MSP and Ambani. From a policy perspective, they were about getting the private sector involved, through a set of uniform laws across the country, into various levels of agriculture, from procuring seeds to retail.

From a farmer perspective, it was about giving them a shot at doubling, or perhaps quadrupling, their income while inviting greater investments, technology, and infrastructure for their lands. From a growth perspective, it was about unleashing the potential of a sector that contributes almost 20 per cent to the GDP.

Yet, the Prime Minister admitted that they could not convince the farmers. Perhaps, the BJP, within its leadership, had access to a separate set of readings from the ground that confirmed the eroding support amongst the farmers, almost 50 per cent of the population, if the family labour and other unaccounted helps are to be factored.

The repeal, irrespective of the politics behind it, has stunted the pursuit of privatisation. Today, it was agriculture. Tomorrow, the same resistance will likely be met for banks, then BSNL, and then for the National Monetisation Pipeline. Put simply, the repeal has done to privatisation what the Church did to Science in the 1600s.

The irony is that amongst all the parties in India, it is the BJP, under Narendra Modi, that has done the most for rural welfare through what the author calls ‘BMW Socialism’ (read more about it here).

With its foundation in the JAM Trinity, the Modi-led government has ensured food security during the pandemic and beyond, clean water, houses for the rural population, electricity, vaccines, health insurances, and much more, and yet, it is proclaimed as anti-socalist or overtly pro-capitalist by all other parties, from AAP to TMC to Congress, who have done nothing but protest against all such moves for the last seven years.

More than the BJP, the downward socialist spiral this country is on the edge of must be attributed to the likes of AAP and Congress who have ushered the freebie culture.

For instance, Punjab, ahead of its elections, is not debating or deliberating on serious policies or economic reforms to pull back the state on the path of prosperity, but is instead fixated on which party can promise more cash transfers in the garb of welfare, and this is when it stares at an imminent ecological disaster.

The wealth creation narrative is nowhere on the cards, for such is the politics of the land. Come 2024, Congress will again float a newer version of NYAY, promising a few thousand rupees to every household without any fiscal explanation.

The socialist romanticisation and contempt for capitalism is not restricted to the rural population alone, but is now beginning to plague the minds of the younger generations, even the ones working in the corporate sector.

Ideally, one must get rich before they get philosophical, but in India it works the other way, not just with all political parties, barring the BJP, but also the people, the judiciary, and other stakeholders. Perhaps, it is something we have inherited from Mahatma Gandhi as a cultural trait, that is to quote philosophy while piously looking for silver linings in poverty.

For the BJP, it is imperative to invest in a narrative that solely focuses on wealth creation. However, there are limits to what the party can do, and even the Prime Minister himself, and therefore, it is time for the mothership to invest in a political offspring.

A political offspring of the BJP should not be focussed on vote-cutting or winning elections, as is the case of AAP when it comes to Congress, but taking back narrative from the anti-capitalist forces, eager to reduce India to a begging bowl of the West and export market of China.

This offspring must bring together the best minds from the private sector, be it technocrats, CXOs, market experts, people working on senior levels within the corporates, or anyone with the experience of running a real business, anywhere in the world. This party must be given an identity and branding, independent of the BJP, and have a set number of priorities.

One, to educate people on the importance of wealth creation and privatisation.

Be it television, digital channels, or any other medium on the internet, say the metaverse in the future, the political offspring, comprising of CXOs and tycoons, must usher literature that helps people understand the difference between a person who is given a fish as a charity and the person who learns to fish as a practice. This political network will also be critical in addressing the freebie culture, beginning to plague the Indian political scene.

Two, the political offspring, while coordinating with the Ministry of Finance or Commerce, must act as the representatives of the government across the world, inviting the biggest of the companies to come make in India.

Of course, the finishing touches from the government will be imperative, but you need business leaders from India imparting some confidence to their global counterparts. Similarly, at the state level, this political offspring can inculcate entrepreneurs at a district and village level to make people understand the importance of wealth creation and even push for faster completion of infrastructure projects.

Three, and most importantly, the existence of this political offspring must not be reduced to an election cycle, as is the case with other parties.

Irrespective of how they perform during the elections, lose all seats, or even forfeiting the deposit, or even not contesting, the objective of this party must be to complement the ideas of the mothership with information and awareness on the ground. The nation, in the long run, will require the intellect and wisdom of people with skin in the business, and not those politicians who bless the rowdy mob bringing down telecom towers.

The ideal window for the BJP to launch this offspring is post the UP elections, one they are favourites to win. Assuming they do make the cut, the BJP must focus on a seven-year agenda, until 2029, focussing on reforms, infrastructure, and the government exiting businesses it is not meant to be in, and getting the economy on a track where it grows at least 10 per cent every year.

Looking back, we missed the industrialisation bus, and therefore, we were always trailing the West. Then, in the 1980s, we missed the manufacturing bus, and hence, we are trailing China even today. However, if we miss the bus of demography in a multipolar world because we were too busy obsessing over free electricity and water, the consequences in the 2030s would be dire for us as an economy.

Modi has set the ideal foundations for growth with BMW socialism, enabling 800 million people, but a decade from now, people migrating from villages to cities would need employment and better living standards, and that warrants a spree of wealth creation and private sector fueled development, beginning today.

Thus, BJP, the party needs a small upgrade to its operating system, and this is precisely where having an offspring can help.