Decoding Modi’s Comments On Raghuram Rajan And Others On Times Now: Part I

In typical NaMo style, the Prime Minister chose his own timing and his own preferred platform to speak his mind on a host of important issues facing the nation. For me, the most striking were his insights on how he handles bureaucrats.

He has not only disappointed all those who expected a hostile and jingoistic approach towards Pakistan and other Muslim countries but also those who expected him to lash out at the opposition parties for blocking many key legislations in parliament. The deftness with which he isolated the obstructionism of the Congress high command from the rest of the opposition parties as well as several Congress chief ministers, who seem willing to go along with new initiatives and proposed new laws of the Narendra Modi government, showed a well crafted Chanakya niti at play.

However, the only parts of the interview that have caused widespread uproar are the ones dealing with Subramaniam Swamy’s attack on the RBI Governor Raghuram Rajan, Chief Economic Advisor Arvind Subramaniam and Economic Affairs Secretary Shaktikanti Das. These have been widely interpreted as a royal snub to Swamy and endorsement of Raghuram Rajan’s banking policies and style of functioning.

In my view this is not an adequate explanation and may even be misleading.

Most Modi enthusiasts had expected him to not just shake up the hold of the Lutyen’s establishment over government but also get rid of those who were appointed by the UPA. As Modi said in his interview to Arnab Goswami, the moment he became PM, people assumed he would fire Raghuram Rajan and other UPA/P Chidambram favorites in key finance-related posts. But he puzzled and disappointed many by not doing so.

However, this was in tune with Modi’s tried and tested strategy of not causing a swift reshuffle of the bureaucracy on assuming power, thereby making the already hostile elements among officers more hostile.

In Delhi, as also in Gujarat, Modi had inherited a bureaucracy and police establishment with deeply entrenched pro-Congress leanings. He had no loyalists to fall back on when he joined as CM in Gandhinagar. Nor did he have any loyalists in the Delhi establishment. Therefore, he chose to make do with whatever human material was available to him in both these positions.

The first conversation between Modi and the then chief secretary of Gujarat, Subba Rao, has become part of Modi lore among bureaucrats. It offers valuable insights into his governance style. Here is Modi’s own version, which I also cross checked with Subba Rao:

When the chief secretary Subba Rao came to meet me, his first question was, which officers I wanted posted as part of the chief minister’s staff. I was genuinely puzzled and asked him: Don’t you already have some officers in the CM’s office? Rao explained that each chief minister has the power to handpick a certain number of officers of his choice. I told him: Look I don’t know any of the government officers. You decide and post the officers you consider suitable. But I want you to keep in mind the following criteria:

i. Officers you pick should be persons of unquestioned integrity.

ii. They should have the stamina to put in long hours because I’m a workaholic.

iii. They should be techno-savvy because I intend to use a great deal of technology to streamline governance.

iv. They should be capable of teamwork.

When I asked Modi whether the officers assigned to him by Subba Rao turned out to be the right choice, his answer was revealing:

This is an accurate description. He worked with the same officers, same staff, same driver and telephone operator that were serving Keshubhai Patel, the earlier chief minister. The fact that Modi neither handpicked officers to work in the CM’s office nor transferred out any officer who was close to his sworn rival Keshubhai or the earlier Congress governments, gave a very positive message.

This became the signature tune of Modi’s administration – no major shakeup of administration but reorienting the work culture of bureaucrats to fall in line with his work style. His adopting the same approach in Delhi has deeply disappointed and upset those who expected him to get rid of the established coterie of Lutyen’s Delhi because it has not worked as well in his tenure as PM as it did in Gandhinagar.

However, not giving Rajan another term is also in tune with his strategy of distancing quietly and gracefully from those who exceed their brief, which Raghuram Rajan did fairly often. For instance, Rajan readily joined the anti-Modi brigade in smearing this government for having Hitlerian propensity. He publicly snubbed the “Make in India” programme – one of the PM’s pet projects by saying it didn’t stand a chance to emerge as a manufacturing hub to rival China.

Rajan’s frequent adverse comments on government policy are bound to have irked and annoyed the PM who doesn’t tolerate hyperactive officers given to publicly ventilating their opinions on issues that fall outside their domain or those who fall prey to party politics driven agendas. His preferred officers are invariably those who play it low key while flamboyant officers who exceed their brief are distanced fairly fast.

But Modi never let his annoyance become publicly visible, though he could well have snubbed Rajan as he did Swamy. But by refusing to give Rajan another term despite a powerful campaign in his favour, NaMo clearly indicated that he found him dispensable.

Then came the publicly-aired stout defence of Rajan which has puzzled and created intellectual disarray in the BJP camp while boosting the morale of pro-Rajan enthusiasts. The Indian Express, the most aggressive cheerleader for Rajan, even published an interview with Rajan’s father ruing that if the PM had spoken earlier, Rajan would not have announced he is quitting. But the PM has ignored the hint.

Those who know Modi or have worked closely with him are not likely to find his gracious defence of Rajan surprising or out of sync with his carefully thought out strategy of dealing with bureaucrats. Once again, I quote his video recorded conversations with me in 2013, where he explains how he tried to ensure that at the point of retirement no officer left angry and cursing, no matter what his past record. To quote him:

(To hear Modi’s original remarks in Hindi, click here.)

Thus, by defending Rajan and by certifying his patriotism, the Prime Minister has sent a strong message to the entire officialdom that he will protect them from unmerited attacks from even his close associates. Their izzat is his izzat. At the same time, there has been no move on his part to retain Rajan for a second term. These two apparently contradictory gestures are actually two sides of the same coin.

Modi remains unfazed by attacks on his own person. No matter how vicious and unmerited the smear campaign, he rarely condescends to respond or offer explanations to clear his name. However, he is very zealous about guarding the izzat and honour of his officers. During the course of his long conversations with me as Gujarat chief minister, he explained at length how he chose to take the full-blast attack for 2002 riots on his own person rather than make a scapegoat of this or that group of bureaucrats and police officers, including those whose lapses were apparent and cost him heavy.

His explanation was that he could not possibly run the state and help it move out of the many serious challenges it was facing without the cooperation of the bureaucracy and police. If he began exposing those whose intended or unintended lapses had led to riots, he would have created fear and insecurity among the entire range of officers who would have then closed ranks. He left the task of punishment to due process through courts.

This strategy of giving a sense of security to his officers is related to the fact that he relies much more on bureaucrats than his political colleagues to deliver his pet projects and schemes. This was true throughout his tenure as CM of Gujarat and the same pattern continues after Modi became PM. That is why we have the largest ever PMO today.

Is Jaitley the super boss?

Many have interpreted this strong defence of Rajan and two other finance ministry bureaucrats as a clear tilt in favour of Jaitley against Swamy. Some media persons have even described it as open admission by Modi that Jaitley is super boss, a de facto PM whose wishes are Modi’s command. This too may be simplistic reading if we closely examine another significant portion of PM’s interview with Arnab Goswami regarding affairs that comes under the Finance Ministry:

Modi is thus making a very forthright statement/admission that he is that dynamo behind key decisions of the Finance Ministry. He takes personal credit for firing corrupt Income Tax officers. He also takes personal credit for issuing a dire warning to black money hoarders.

One may or may not agree with the approach being adopted by the Modi government in tracking and curbing black money. But one thing is clear; the policy has the direct imprint of the Prime Minister. The tone and tenor of the PM’s statements indicate that he is not only giving direction to the decisions in the ministry but micro managing its affairs in key areas.

Thus, far from upgrading the status of the Finance Minister to that of a super boss or a de facto PM – as he is widely referred to, Modi seems to have indicated that even the ministry under Jaitley’s charge is working under the PM’s close supervision.

Please await the second part of this series, which should appear in Swarajya within the next few days.

(For more on Narendra Modi’s governance style in his own words read my book Modi, Muslims & Media, available at Amazon or can be ordered directly from Manushi at mail@manushi-india.org)