Two Years of Modi government
Promise of democracy is not merely counting of heads instead of breaking them, it also provides an arena for the battle of ideas. Ever since Independence, India is ruled by one party and with one idea - eradication of poverty through socialism ( planned economy, commanding heights of the economy in the hands of politicians and bureaucrats ). There were many slogans - socialist pattern of society, 'garibi hatao' , nationalisation of banks & insurance companies. The slogan of 'garibi hatao' remained just a slogan. Things started changing after Prime Minister P.V.Narasimha Rao liberalised Indian economy in 1991. He was forced to do so by the economic logic. There was no foreign exchange to pay for some essential imports. The Congress and their friends continued that policy as it increased the growth of the Indian economy and helped the governments to spend more money on the welfare activities. The change of policy was not because of conviction but because of convenience.
During the 2014 general election campaign Narendra Modi, NDA's prime ministerial candidate, offered the Indian people change and development based on his experience in Gujarat and his conviction. He believed in 'minimum government and maximum governance' and empowerment of the people. During his tenure in Gujarat, he provided water and electricity to all the villages of the state. The semi-arid state notched almost 10 percent agricultural growth for 10 years. His slogans, " India First " and " sabka saath, sabka vikas" were the result of his experience and they won him the confidence of the electorate. He won with a clear majority - a majority no other government had received in the last 30 years.
New ideas and new initiatives
Modi government seeks to empower the people, especially the poor. Jan Dhan Yojana, a zero-balance bank account, enables the poorest of the poor to save his hard-earned money and avail credit needs as well. The government was able to enroll 21.56 crore poor in this scheme. It redeems the promise of the nationalisation of banks - helping the poor. The JAM ( Jan dhan, aadhar,mobile) scheme thought of during the UPA regime, is being implemented now. This scheme has the potential to stop leakages in all the government programmes for the poor. Modi government has introduced Life Insurance and Accident Insurance schemes for the poor with small premiums. There is a pension scheme for the old. This again is a promise made long ago by Shrimati Indira Gandhi. Modi can claim ' I have come to fulfill, not to destroy'.
To meet the needs of the small traders and businessmen, the government has launched Mudra Bank which provides loans from Rs.50,000 to Rs.10,00,000. An amount of Rs. 1.25 lakh crore has been disbursed to 3.30 lakh small enterprises. This section of our people depend more on a money lender than a bank. Mudra Bank is a bank for the unbanked.
Agriculture has received special attention. Crop insurance with a low premium and distribution of urea with neem-coating has benefitted the farmers. Under the programme, Pradhan Mantri Krishi Sinchayee Yojana, an amount of Rs.50,000 would be spent to improve irrigation in five years.Priority is being given to drip and sprinkler irrigation. Soil and seed testing facilities are being provided in 2000 outlets of fertilizer companies. Another major initiative is the e-auction in mandis all over the country. This will enable the farmers to sell their produce at the maximum price in the market.
The number of approvals/permits which delay the implementation of industrial units have been brought down to enable Indian and foreign businessmen to invest in India. India is today second only to China under the ' Ease of doing business' index among the developing countries. Many states have relaxed labour laws to attract more investment. Foreign investment in insurance industry has been increased to 49 percent to widen insurance coverage in the country. And the increased foreign investment ( 49 %) in defense sector will bring in new technology and employment to India. Now India imports almost 70 percent of its armaments from foreign countries which is rich source of corruption.
The Modi government has initiated some 30 programmes such as Digital India, Make in India, Smart cities, Skill India, Swachh Bharat, Beti Bachao and Beti Padhao Yojana covering all aspects of national life. The government has injected new energy, purpose and dynamism in the moribund Indian Postal Department and the Railways. With a network of post offices in most of the Indian villages it has the potential to be the lead banker of the poor and the farmer. Efficient, clean and fast railway network would reduce carbon foot-print. For the first time the railway network is being expanded with funds and technologies from Japan and Spain.
Modi himself has visited many countries to get more investment. Many countries such as USA, Japan, China have pledged to invest in India and to provide technology as well. His passion and fervour has changed the perception of India in the world. India is truly is 'on the go.'
Modi has not forgotten his promise to stop black money growth in the country and bringing back black money held in banks in safe havens abroad by Indian citizens. Many countries, including Switzerland and Mauritius, have agreed to share information on Indian citizens who have bank accounts and bank deposits in their countries. Recently, the government has been able to amend the double taxation avoidance treaty with Mauritius which is supposed to have been used by some businessmen to bring their black money to India. Many schemes such as Digital India, JAM, neem-coating of urea are aimed to reduce black money in the economy.
This is a good beginning for any government, and good beginning, is, indeed, half done. Most of his initiatives will bear fruit within the next few years.
Assessment by experts and critics.
India Today, a leading weekly, has a comprehensive report on the two years of Modi government under the head, 'Now Go For Gold', with the sub-title, 'Two years on, Modi still sets the pace, but could have done better'. Aroon Purie, editor-in-chief, concludes, " It's good that the era of corruption and policy paralysis is behind us. It is now time to up the run rate. As the government enters the middle overs,Modi is still our best bet." He says the Indian political class has no appetite for big bank reforms and that there is more focus on streamlining processes than on structural reforms.
Purie forgets what Modi said long ago that he has brought a changes in Gujarat with the same bureaucrats and the same laws. " Modi government@2 : Small changes have unlocked big bottlenecks", says Neelkanth Mishra, India Equity Strategist for Credit Suisse, and adds, " execution of plans has improved". This is exactly what he did in Gujarat. He motivated and encouraged the bureaucracy to give good results. He had 'chintan shivirs' with the top bureaucrats, and he asked them not to think in 'silos'. Many programmes are delayed because one arm of the government coming in the way of another. Everybody knows government is the biggest litigant in the country. His government has removed many bottlenecks for economic growth. Forest department, environmental department, tribal department and many others always carry on their differences for ever without any pragmatic solution.
Aroon Purie notes that there are no big-ticket scandals, and there is more transparency in the government through public auctions of natural resources. His foreign trips have helped change the image of the country globally. He bemoans 'the poor bench-strength' of the cabinet and his silence on 'decisive issues'.
" While the Modi Sarkar has done well on economy, infrastructure and foreign policy," writes Raj Chengappa, Group Editorial Director, " it has been dragged down by setbacks on the political and social fronts." Modi deserves high marks for his management of the economy, and the government has increased investment in railways, highways, ports, power plants and in the petroleum sector. India is buying oil wells in many countries. He personally monitors the progress of these sectors, he observes. His fiscal prudence, notching up 7.6 percent GDP growth in spite of two consecutive droughts and maintaining low inflation does credit to him and his team. Arun Jaitley, Nitin Gadkari, Suresh Prabhu, Piyush Goyal and Dharmendra Pradhan have called "Panchratna" ( five diamonds) by the writer.
" All things considered," observes Surjit Bhalla, a leading economist, " it is only fair to conclude that economic performance during the first two years of Modi were second-best in the last 20 years. Now think about this : If the Monsoon in 2016 is as expected, then the first three years of Modi will be the best three years since 1996, and possibly the best three consecutive years for Indian economy since Independence."
" The sense of defeatism has abated " writes Pratap Bhanu Mehta ( President, Centre for Policy Research), And adds, " But India is far from a deep transformation." He says several schemes, like taking LPG to the poor, are potentially life transformative. There is no sense of a framework for the single most important challenge for India: Jobs. This is manifesting in social challenges bubbling from below.
This analysis will not be complete without mentioning the evaluation by the farmer Finance Minister, P.Chidambaram, who writes in his column, Across the Aisle, " The once-in-a-generation mandate had endowed the government with enormous political capital that could be used to implement any reform, including some long-pending and difficult reforms. Alas, two years after May 2014, the government has become a punchline for jokes." He calls Modi government's land acquisition bill, Aadhar bill and GST bill as 'legislative misadventures'. Congress-mukta Bharat, pseudo-nationalism, toppling governments and clean chits to terror accused are attempt to target Congress. Foreign policy is a failure in Nepal, Pakistan and China.
One may agree or disagree with the bouquets and the brickbats by the economic and political observers, a few things are irrefutable. Modi and his team have maintained high probity, notched a high rate of GDP growth in spite of two consecutive droughts, have stuck to the fiscal deficit norms and controlled inflation, have attracted more foreign investment, and people of the country are optimistic about the future under their government. He and his team have continued with their development agenda in spite of obstruction by their friends and their foes.
Two years is a short time.
Two years is a short time to evaluate Modi government. All schemes take time to bear fruit. However, one thing is certain : Modi has generated optimism about India's economic growth among the people of India, and even abroad. He exudes dynamism whatever he goes. He has 'out-of-the-box' ideas. He invited all the prime ministers from the SAARC countries for his oath-taking ceremony signifying his efforts to start a new chapter of friendship. He has reached out to neighbours and all major countries of the world without any 'hesitations of history'. He wants India to play its legitimate role in the world.
Modi appealed to the rich and middle class to give up subsidy for LPG and enable the government to give it the poor. Almost one crore responded. Five crore poor will get LPG within a short period. This would save the eyesight of the poor and improve environment. His appeal reminds us the similar appeal by Prime Minister Lal Bahadur Shastri to miss a meal to feed the poor during the drought. People respond when a genuine leader asks people to sacrifice for a genuine cause.
The response for ' Swachh Bharat Abhiyan' has been heartening. One survey mentions 52 percent found it making impact. Number of public toilets have increased, and now many houses in the villages have toilets. Infrastructure - railways, roads, power generation - are doing well. The power ministry is expecting to provide 24 X 7 electric power to all over India by 2017. GST is likely to be passed during this fiscal year which is expected to add one to two percent to GDP.
The most important change Modi is striving to do is to change the mind-set of the people. He wants people to be the change-makers. He always talks about mass movement for all changes in the society and the country. He has taken a leaf from the life of Mahatma Gandhi who awakened the people for swaraj through mass movement. The 'ma-baap' sarkar curbs the initiative of the people. Empowered people create a future for themselves, and that is why the government has set up Mudra Bank, Skilled India, Digital India, hubs which offer government venture funds to young technocrats with new ideas to set up enterprises, and create employment opportunities. Who wants charity and subsidy if he gets opportunity to build his own future and his own fortune ?
The writer M.D. Kini is a commentator on Indian Affairs.