No risk, no reward: Lessons from Kashmir

Venky Vembu | Updated on August 09, 2019 Published on August 09, 2019

Bumpy ride: For far too long, governments have thrown good money after bad to keep loss-making ventures such as Air India running   -  PTI

The Modi government’s readiness to change the ‘consensus narrative’, as it did on Kashmir, doesn’t extend to the economy

The hardest hurdles to overcome are, in many cases, entrenchments of the mind. Even well-intentioned ideas may, over time, lose their way in the dreary desert sands of dead habit, and become fossilised in the deepest recesses of human understanding. In that calcified state, they exert a disproportionate influence in shaping responses to the underlying problems. They also cramp the space for unhindered thought, inhibit policymakers from extending themselves, and have a chilling effect on any meaningful action.

The tectonic shifts in Kashmir’s political landscape this week indicate, however, that even the most formidable hurdle isn’t an impediment when political resolve propels a player into framing unconventional responses in a cause it is committed to.

The backstory to the most recent developments — which culminated in the Narendra Modi-led BJP government’s move to substantially dilute Article 370 of the Constitution, which had invested Jammu and Kashmir (J&K) with a special status in the Indian Union — is educative.

The ‘special status’ granted under that provision (and under Article 35A) had come about as a concession to the peculiar circumstances at the time of Independence and soon after, in which the then princely state — with a Hindu king but a Muslim-majority population — had acceded to the Dominion of India.

Article 370 was always intended as a temporary measure to becalm Kashmiri sentiments and grease the tracks for the accession to India. However, the compulsions of realpolitik over the decades had ossified the ‘special status’ provision in politicians’ minds.

Perversely, that ‘special status’ manifestly led to the build-up of political entrenchments, from which only a few political dynasties in the state benefited at the expense of laypersons. It also gave rise to discrimination of women and people belonging to the Scheduled Castes and Scheduled Tribes, and, more generally, to people from other states, who could not secure ‘permanent residence’ or procure property in J&K.

The BJP had, in its manifestos over the years, repeatedly pledged to do away with Article 370 on the grounds that it impeded a true union of Kashmir with the rest of India, and was the root cause of separatist tendencies in the Valley. But given that the mainstream political consensus framed Article 370 as immutable, the BJP’s pledges were dismissed as ritualistic invocations intended to pander to its nationalist base. So brashly smug was former chief minister Farooq Abdullah that he once taunted Modi, saying that he would never be able to trifle with Article 370 — even if he were to become the prime minister 10 times over!

On Monday, the air was deflated from that dare. The eventual denouement of these risk-laden developments must await the verdict of time, of the judiciary, and of politics, but there are lessons to be drawn in the economic sphere from the BJP’s against-the-grain approach on Kashmir.

The state of the economy today is distinctly downbeat, as the data streams of recent weeks and months bear out. Some of this bad news is the result of a structural slowdown, which traces its origins to a number of factors. The turmoil on the external front, induced by ongoing trade wars and geopolitical tensions, accounts for one strand of this narrative. In equal measure, some of the policy missteps in the first term of the Modi government are biting now, with a lag effect.

But one other causal factor that has weakened the economy over time is the inability of successive governments to get public finances in order. This demonstrates a feckless incapacity to break out of the ‘consensus narrative’ over the many heads of expenditure that make impositions on the exchequer without contributing to any economic or social good.

For far too long, governments have thrown good money after bad — in keeping the loss-making Air India airborne, or in keeping ailing public sector units on life support, or in recapitalising NPA-laden banks without getting them to mend their ways. Newer infirmities keep cropping up from time to time — BSNL and MTNL are the latest in line for bailouts. But the reflexive response on every occasion has been to kick the can down the road rather than dealing with the problem.

Such an approach represents risk aversion of a high order, the cost of which is eventually borne by taxpayers. The blame for this is, of course, widely shared, which is why there is manifestly little by way of incentive to break out of step and do anything new.

In spirit, this echoes the same ‘consensus narrative’ that characterised the discourse over Article 370 — until the BJP dramatically changed it this week. That was a function of its long-held commitment to the cause of the ‘true integration’ of J&K, and of its resolve to stand out in a crowded political space. Sadly, the party does not appear to have quite the same appetite for risk in matters that relate to the economy, which is why it, too, has yielded too readily to the entrenchments of the mind.

Venky Vembu   -  BUSINESS LINE


Venky Vembu is Associate Editor, BusinessLine; Email:

Published on August 09, 2019
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