New era, old budget | The Indian Express–05.02.2018

I did not participate in the post-budget reflections on TV. I declined all invitations, in part, because it was not a novelty and in part because I knew that I would spend most of the time staring at the camera, mute and captive. I also declined because I acknowledged that I would most likely trot out superficial bromides to no avail and zero impact. That is to say, the budget is along predictable lines. The focus on agriculture, health, education and infrastructure had to be expected given the onset of general elections. It is a mistake to have excluded energy from the speech (other than the familiar and politically “non negotiable” promise to provide free/subsidised electricity and fuel to indigent households), especially in view of the hardening of oil and coal prices. The fiscal arithmetic looks stretched, the thrust towards “import substitution” is worrying and everything will depend on the efficiency of implementation of the announced programmes (particularly those related to health coverage). I might have pointed to the accounting sleight of hand that enables the finance minister to claim the proceeds from the sale of one state-owned entity (HPCL) for another state-owned entity (ONGC) as part of disinvestment proceeds. These were my reasons for declining even before the FM began his budget speech.
But during the course of the FM’s speech, I found a further reason for not going in front of the cameras. This reason had less to do with the specifics of individual proposals than the structure and presentation of his speech. It seemed to me that the approach was out of sync with the new world order of the 21st century and that the FM’s speech reflected a disconnect between the nature of domestic policy formulation and the paradigmatic changes taking place across the world. I could never have communicated these somewhat inchoate thoughts in bite-sized TV language. The anchor would most certainly have interrupted me and I would have felt frustrated.
We have entered a new era — defined by explosive technology, instantaneous communication, “stigmatised capitalism”, unpredictable politics and existential challenges. The recently-concluded gathering of global elites in Davos gave forceful expression to these developments. Our prime minister kicked off that meeting by reminding everyone of the virtues of globalisation and open trade for goods and services. And the dangers of terrorism and climate change. He called for a collaborative global effort to manage and mitigate these existential risks. Other leaders followed with similar messages. Emmanuel Macron, Angela Merkel and even Donald Trump talked of the transformative changes heralded by technology but also forewarned of the consequences to liberal values of a two-track world in which a minority have acquired the relevant skills to move onto the track of prosperity and the majority find themselves on the track to unemployment, irrelevance and despair.
This “new era” is not, however, reflected in the vocabulary of politics or the models of public policy. Global warming, terrorism and pandemics are problems that recognise no national boundaries. But the solutions to these problems are culled from the politics of nationalism. Politicians talk of the connected and common bonds of humanity in international fora. But faced with domestic pressures, they peg their electoral appeals on the narrow and ascriptive dividers of caste, class, ethnicity and religion.
The fact is that leaders are struggling to find a new approach to reconcile the demands of the “new era” with the existing processes of politics and policy formulation. Most prefer to fall back on “old world “ ideas and models in the hope, perhaps belief, that it will provide the compass to navigate emergent discontinuities. The French epigram “plus ca change, plus c’est la meme chose” or “the more things change, the more they remain the same” captures well the current state of affairs.
I found myself reflecting on this disconnect during the course of the FM’s speech because of the exclusion of energy from his script. It is not that I expected energy to be included — it is too complex a subject to be covered in a statement on essentially the arithmetic of the government’s annual expenditure and revenue plans. But I did think that, given how critical this sector is to the fulfillment of the budget proposals, and, more importantly, the fact that it is in the throes of a near-revolutionary change, the FM would dedicate a few sentences to, at least, alert everyone of the potentially strategic implications of these changes. That he did not but spent instead 55 minutes on agriculture, health and education and mentioned only en passant “new era” disrupters like cryptocurrency and block chain is what prompted me to wonder why, in a world overflowing with innovative and creative thought, political leaders and processes are so out of sync with the “disruptive” new era. And what might be the social and economic consequences, if leaders continue to settle for the “dubious compromises” of ideas that no longer inspire.
Why did energy trigger this thought process? It is because its narrative has radically altered. Fossil fuels remain, of course, the dominant source of energy. But the narrative is now about the transition to the non-fossil fuel era. It will take a long time for this transition to be completed but the fact that most of the developed world is focused on developing technology alternatives to the internal combustion engine and the millennials have a growing antipathy towards dirty fuels and are questioning the owner-operator model of mobility suggests that energy management needs a different model — “new ideas”. I was hoping this would be acknowledged in the budget speech especially since our economy is entering its most energy-intensive phase and our environment is under stress.
I support the idea of simultaneous elections for state assemblies and Lok Sabha even though it is conceptually flawed because it is a “new idea”. We need thinking that compels the development of new political, social and economic models.
The writer is chairman and senior fellow, Brookings India

via New era, old budget | The Indian Express

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