Context is always important when judging a government’s performance on reforms. Many commentators who believe in free markets tend to rate Atal Bihari Vajpayee’s reforms higher than Narendra Modi’s, possibly because the former led a messy coalition while the latter has an absolute Lok Sabha majority. But look deeper, and the answer to the question – who did better, Vajpayee or Modi? – is not that simple.

Let us start with Vajpayee. The key reform initiatives in NDA-1 were the following: privatisation of many public sector companies; mending the broken electricity and telecom sectors by enacting changes to the Electricity Act and reworking telecom policy; funnelling major public investments towards infrastructure, including national highways and rural roads; and, enactment of the Fiscal Responsibility and Budget Management (FRBM) Act.

Of these initiatives, three have stood the test of time. In privatisation, the Vajpayee era’s performance has been unequalled till today. The infrastructure building programme is now part of a national consensus. And teledensity has been achieved, albeit with several scams punctuating its progress during UPA’s tenure.

But fiscal irresponsibility got worse under UPA-2, which modified the FRBM Act according to its political convenience, and the same practice continues under Modi’s NDA-2, even though overall fiscal performance has been better. The law enacted under Vajpayee has failed to deter frequent shifts in fiscal goalposts.

The problem of unviable state electricity companies has not been fixed even today; Vajpayee allowed their overdues to be converted into bonds, and Piyush Goyal, power minister till last year’s reshuffle, had to repeat the exercise under NDA-2 with his Uday scheme. But the problem will not go away till state distribution agencies become viable on their own, with tariffs being adjusted to cover higher costs, when needed. The setting up of state and central electricity regulatory commissions has not helped much. The changes in the Electricity Act, which allow power consumers to choose their own suppliers, have not been fully utilised to drive competition and cost efficiencies.

Under Modi, the Goods & Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) stand out as two outstanding reforms; the smaller reforms or initiatives relate to cleaning up the mess left behind by UPA and decent execution of the reforms half-begun. With the Supreme Court annulling the arbitrary grant of coal blocks and spectrum licences to private parties, the Modi government has done the cleanup act by amending the Mines & Minerals and Coal Mines Nationalisation Acts to allow for legal auctions to private parties. Spectrum has been sold to the highest bidders transparently, though the process started under UPA-2 reluctantly. Old reform initiatives have been rejuvenated, and executed well.

Reforms attempted through legislation include the following: subsidy rationalisation through direct cash transfers using Aadhaar biometrics to eliminate fake beneficiaries; liberalised insurance and pension laws to allow for 49% FDI; “managed” deregulation of petrol and diesel prices, where oil companies change prices daily, but may call a halt temporarily whenever there are whispers from the top during election time.

Demonetisation can be called reform only by tweaking the meaning of the word; in any case, it did not manage to trap any black money since almost all the old Rs 500 and Rs 1,000 notes came back to the system. Demo was an attempt at reform that did not pan out, and, moreover, caused damage to the informal economy. The continuing efforts to digitise financial transactions and various voluntary disclosure schemes for enticing black money back into the system have met with only mixed success.

The three big successes under Modi have thus been GST (though still in need of fine tuning), the bankruptcy code and the rejuvenation of highways and waterways under more difficult conditions than in Vajpayee’s time. GST has subsumed a multitude of taxes into one tax, and taken India closer to becoming one national market. IBC is the first serious effort to not only clean up bank balance-sheets, but also to force old promoters who ran their companies into the ditch to relinquish control. Crony capital has had to eat humble pie under Modi.

These are huge achievements not only because they needed consensus legislation, but also because they had to negotiate UPA-era laws that prevented cheap land acquisitions for road building. Vajpayee did not operate with this constraint, and land for highways was acquired under British era laws.

It also appears that under Vajpayee some of the privatisations were illegal; when challenged in court by public interest litigants, it was discovered that companies that were nationalised through specific acts of Parliament could not have been privatised merely by executive fiat. Parliament has to rescind these Acts, and with NDA-2 not having a Rajya Sabha majority, further privatisation has been severely constrained. In fact, the privatisation process had stalled even under Vajpayee, when BPCL and HPCL were put on the block and faced court challenges; the sale of residual government equity in HZL, though privatised under Vajpayee, remains stuck even today.

Net-net, this is the verdict: Vajpayee’s reforms were visionary and had a big picture approach, but ignored a lot of the details needed to make them long-lasting and permanent. Modi’s reforms were tougher and harder to implement, but have often been more about fixing the plumbing in order to make them work.

True reforms need a mix of both Vajpayee and Modi. When we stack up Vajpayee’s reforms against Modi’s, we can give high marks to both, but not credit victory to either.