Was Modi’s philosophy of minimum government, which meant curbing of red tape and erasing corruption for better governance, sidelined by the debacles in Delhi polls of February last year and Bihar elections in November 2015, leaving a greater space for politics than actual reforms? Or, was the Cabinet reshuffle more of an expansion and not really a shake-up?

There was almost no change in the Cabinet rank ministers (excepting Minster of Human Resource and Development) and the ministers of states (with independent charges). It was the number of Ministers of State, which swelled up, with the fresh induction of 19 new faces. Since the Cabinet is the core group for decision-making, followed by independent in-charge Ministers of states, no major alteration in these groups of ministers did send a message that Modi was sticking to the philosophy of better governance. In the new council of ministers, Modi has 26 Cabinet rank ministers and 13 ministers of state (independent charges) against 23 and 10 respectively in 2014.

The expansion was made based on calculations of caste and regions, keeping an eye on the six state assembly elections in 2017. Ten states were represented in the new 19 faces, including the major and influencing states for the 2019 general election, such as UP, Gujarat and MP.

UP and Gujarat will go for assembly elections in 2017. Caste-based Dalit and Patidar factors played a key role in the new faces from UP and Gujarat. Overall, the merits of the Cabinet expansion and reshuffle were decided based on a) voters perception, b) parliamentary performances, and c) ministry performances. No addition was made from southern states.

In the Cabinet expansion, where politics overrides the “Minimum Government, Maximum Governance” and reforms, it seems that a lesson from the Manmohanic government was drawn. According to Dr Manmohan Singh, politics cannot be overridden or sidelined in the Indian brand of governance. This was proved by Manmohanomics during 1991-1996 and 2004 -2014 stints. Politics is an embedded part of governance to fructify the reforms. During 1991-1996, despite the great reforms, which bailed out the country from a big defaulter in the world and drew up the roadmap for open economy, the reforms failed to give a victory to the Narasimha Rao government for the second term. Reason, the benefits of the reforms did not reach the have-nots, the vote bank of Indian politics.

According to Dr. Manmohan Singh, “the reforms process and the economic management of the country require a broad-based political consensus in our country”. This was the philosophy of the Indian brand of governance, he advised to Modi government in an interview. Quoting an example from his submission to politics over reforms, he said that he had to bend down to subsidy-run economy, despite his stiff reluctance to giving out a huge subsidy to fertilisers in 1991 reforms.

Modi’s minimum government and maximum government initially pandered to India’s image of a poster child of the emerging economies. It is relatively insulated from the vulnerability to the global financial tsunamis, caused first by the Lehman Brothers crisis and Wall Street meltdown and now by Brexit. Inflation nosedived to 5 percent – economically known as the comfortable zone to sustain highest GDP growth of 7 to 8 percent in the world. The CAD (current account deficit) plunged to 1 percent from 5 per cent of GDP and foreign exchange reserves shot up to ten month’s imports. Bold reforms in FDI made India a highly competitive destination for the foreign investors, letting FDI surge by 78 percent during the first two-year period of Modi government.

Green shoots of minimum government and maximum government are visible. The recalcitrant bureaucracy, which did not serve the people but rules over them, received backlash by the rule of “perish or perform”. Earlier, a Cabinet note used to take at least three months to get prepared. Now, files are getting cleared in 15 days to one month.

Multiple layers in decision-making process at the Centre have drastically been reduced. The secretaries were asked to reduce the decision-making processes into four layers. According to a Cabinet note, all Secretaries from each Department were asked to repeal at least 10 rules or procedures, which were redundant and affected the efficiency. The Secretaries were asked to identify forms and shorten them into one all-purpose form.

Mr Modi dissolved a number of Cabinet committees, which were overlapping in their mandates. The number of Cabinet committees were reduced from 12 to 6.

Will the Cabinet expansion decelerate the investors’ confidence and growth of the economy? Will the new faces in ministries be deployed to accelerate political outreach only, but will also be engaged with active role for governance? Concerns are surfacing for the return of the cumbersome multi-layer decision-making processes, after the PMO declared new work norms for the State Ministers, empowering them with responsibilities in their respective divisions before they reach the Cabinet for final decisions.

In this perspective, it is vital for Modi government to clarify that this expansion was not the obstruction to governance. Modi government should assert that having almost no change in the Cabinet rank ministries and ministers for independent in-charges, the government continues to be small with the same ministers representing same ministries, who gathered experiences during the two-year period. Had there been a reshuffle in the Cabinet, there would have been chances of government to have actually erred.
Another factor, which will nix the negative believe on expansion, is the strong economic parameters of the country, established during the two years period of Modi government. The country has proved its strong insulation against the recent global turmoil, Brexit, and earlier the Lehman shock in 2008. Stock market has returned to boom and the rupee has stabilised. Given these, investors’ confidence is unlikely to be shaken by the expansion of council of ministers. (IPA Service)