Blow to Modi's reforms agenda

The big bang FDI reforms announced by the Cabinet Tuesday last, easing norms across 15 key sectors, soon after BJP’s comprehensive electoral defeat in Bihar and on the eve of Prime Minister Narendra Modi’s visit to the United Kingdom has sent the right signal to foreign as well as domestic investors.

Though RSS affiliates, Bharatiya Kisan Sangh, Bharatiya Mazdoor Sangh and Swadeshi Jagran Manch, have red flagged FDI and skeptics in the Opposition are not impressed with the prime minister’s handling of the economy, the BJP’s defeat in the crucial Bihar elections last week has cast a shadow over the government’s ability to aggressively push the reforms agenda.

The Bihar debacle is not only a personal blow to Modi and his man friday and BJP president Amit Shah, but also galling for the policy makers. The rout in Bihar has diminished Modi’s moral authority vis-à-vis the Opposition, further complicating the government’s equations in Parliament, especially in the Rajya Sabha where it lacks majority.

Several crucial reform legislations such as Goods and Services Tax (GST) Bill, Real Estate Regulation, and Land Acquisition Bills are stuck in the Upper House mainly as a result of confrontation between the government and a combative Opposition.

After the monsoon session was washed out, Modi and the BJP honchos had pinned their hopes on the Winter Session to pass these bills. A win in Bihar would have given the BJP three distinct advantages. It would have augmented Modi’s fire power and demoralised the Opposition. A buoyed party could have driven a wedge in the Opposition ranks and isolate the Congress. But the outcome is now expected to make the Congress, JD(U), RJD and the Left combine more belligerent in Parliament. Contrary to expectations, the government is unlikely to mop up a majority in the Rajya Sabha during its tenure.

The BJP secured just 53 seats in the 243-member Bihar Assembly, and if a Bihar type anti-BJP Grand Alliance---a BSP, Congress, RLD plus---is replicated for the 400-member UP Assembly, the government is in real danger of being a lame duck for its remaining term. A good performance in these Hindi heartland states together having 643 MLAs would have correspondingly swelled the BJP’s rank in the Rajya Sabha. The reason why Bihar election was so important for the Centre and Modi.

Rajya Sabha equation

In the five states going to polls next year--West Bengal, Assam, Tamil Nadu, Kerala and Puducherry---the BJP is inconsequential, barring Assam. As such, by losing Bihar, the government is in danger of losing momentum with regard to reforms. The BJP has just 47 MPs in the 245-member Rajya Sabha and it needs 123 seats to muster a majority in the Upper House, that is an accretion of 65 members as early as possible. If the party wins Uttar Pradesh with over 200 seats, only then can it expect to get some 8-9 seats in the Rajya Sabha from the state by 2018. 

Around 10 states will elect Rajya Sabha MPs  in the next three years and according to a rough estimate, the BJP may not be able to add more than 40 seats. That means, the party’s tally will have about 90 seats, some 30 to 32 seats less than the majority mark. How Modi is going to counter the Rajya Sabha roadblock remains to be seen. By 2018, the countdown for the 2019 Lok Sabha polls will begin and the Modi government is in real danger of missing the bus.

Apart from Parliament numbers and uniting the Opposition, the Bihar results have opened yet another front against Modi. Several senior leaders have united against the prime minister, criticising his style of functioning, which would have emboldened the Opposition.

So, what are the options before the prime minister? Modi can make up for the lack of majority in the Upper House by adopting a conciliatory attitude towards the Opposition. The Congress has gone public saying that it is willing to back the GST Bill provided the government incorporates some of its suggestions to fine tune the legislation.  

The government also has the option of convening a joint session of Parliament to pass the GST Bill, a last ditch effort. Its managers may also be tempted to look at the possibility of converting the GST and Real Estate Bill into money bills -  that do not require the Rajya Sabha’s approval.

All three are unpopular options in a parliamentary democracy and the best way for Modi would be to shed hubris, buy peace with the Opposition, rein in hotheads who hijack his governance agenda and stop “managing media headlines”, as Arun Shourie put it.

(The writer is a Delhi-based political commentator)