Three years of Modi’s systemic reforms presage the next seven

Three years of Modi’s systemic reforms presage the next seven

By Gautam Mukherjee | 20 May, 2017
Narendra Modi, NDA,  Shiromani Akali Dal, Shiv Sena, CAG, Modi government, Aadhaar card
Prime Minister Narendra Modi and BJP veteran L.K. Advani during the BJP National Executive Committee meeting in Bhubaneswar on 15 April. Photo: IANS
GDP growth will probably return 7.5% for this fiscal, and over 8% in 2018, after GST has contributed its mite.

There is not a thought that is being thought in the West or the East that is not active in some Indian mind.

E.P. Thompson

The unprecedented hallmark of the Narendra Modi administration at the three-year mark is an almost total absence of corruption and scams in high places. This is in sharp contrast to the procession of corruption charges against senior members of the previous dispensation, and indeed much of the present Opposition. Charges that are coming home to roost now. And yet, the BJP in governance is only almost clean. Vestiges of the mid 1990s Vyapam scam still cling to its state of Madhya Pradesh. Besides, not everything in the domain of the NDA allies, such as the Shiromani Akali Dal and Shiv Sena, comes up roses.

However, in a relativist world, the Modi government is determined to make its zero tolerance for corruption the leitmotif. Not content with running a clean administration, it is going after black money. Post-demonetisation, it has become easier. This plus the mother lode of benaami property, armed with a revived law, with teeth.

From erstwhile Comptroller & Auditor General (CAG) charges of crony capitalism, the Modi government claims governance victories out of auctioning coal and mineral mining blocks, as well as the telecommunications spectrum. Together, these are projected to earn more than Rs 5 lakh crore for the government.

Linking disbursements of government payments with the bio-metric Aadhaar card, bolstered by an Act of Parliament, has led to an avoidance of over Rs 50,000 crore in fraudulent payments.

Many millions of the unbanked poor have been recruited into the system, well before demonetisation, and its narrative of a cashless economy in its aftermath.

Demonetisation has not only turned the country far more digital financially, but has also netted nearly a crore of fat new income tax assessees. This, even as 96% of the existing assessees, with income under a taxable Rs 5 lakh, have been rendered practically tax free.

The government also has not shied away from tackling the Rs 10 lakh crore non performing asset (NPA) mountain. Using an ordinance for quick activation of the Banking Regulations Act, it has armed the Reserve Bank of India (RBI) with powers to go after the bad corporate debtors and their assets. Another law to seize assets of run-aways and absconders is in the works.

Apart from a clean administration and its physical clean ups as in Swacchh Bharat, inclusive of its toilet-building push, and the elusive Ganga Clean Mission, other great themes are also discernible. These are its beavering away at systemic, enabling, reform.

Juxtaposed with this is a revamping of India’s foreign policy and a raising of its profile. One, that not only acknowledges the importance of individual Indians in distress abroad for the first time, but is confident enough to trade favours with other countries. This, more often than not, on a bilateral basis.

A tinge of militarism, forced upon the policy landscape by frequent provocations from Pakistan and sly barbs from China, is a departure from the submissiveness of the previous government. Combined with a massive buying/manufacturing push in this area, India is clearly arming to take on both its unfriendly neighbours, if necessary.

Domestically, Narendra Modi and Amit Shah have shown their ability to win elections at various levels most of the time.

Collectively, these broad streams presage the progress to come.

Together they will transform not only our expectations of national growth/well-being and our place in the world, but qualitative skilling, jobs generation, and freedom of choice. Even those initiatives that have failed for now, such as the attempt to reform the judiciary, and reform labour laws, show promise.

And those that are working—solar and nuclear power development, satellites, missiles, space—are indeed good to behold.

A recent online poll conducted with 40,000 participants from 200 cities around the country, gives Modi a 61% approval rating for meeting expectations, and a 69% rating of optimism about the future.

The fact that notable reformist legislation, pending for years, such as the GST has been passed in the face of intense obstruction shows the determination of this government. Compared to the battle for GST, other path-breaking laws such as the Insolvency & Bankruptcy Code, the Land Acquisition Act, and RERA, to regulate the real estate space, seem almost facile.

The Indian government today, is, above all, on a massive infrastructure build-up to drive GDP growth, provide employment and boost modernisation.  It is building city metros for mass transportation, putting in new-fangled bullet trains and modernising the long neglected Railways.

Even the struggle to amalgamate the hearts and minds of the people in Jammu and Kashmir, while subduing the insurgency in the Kashmir Valley, is making dogged progress, much to the anger of those opposed to it.

Mixed results against the Maoists and other insurgents show that the government is reluctant to seek a purely military solution against such internal militants. However, the position, under intense provocation and many casualties, is hardening.

The old RSS/VHP/SS/BJP promise of a Ram temple in Ayodhya is inching forward, with the government content to back the judicial outcome expected to sanction its building.

In a departure from its much vilified past, the Sangh Parivar, in most of its components, has been unabashedly admitted into the mainstream. This, with deserved gratitude for its contribution towards the success of the NDA at various levels. Hindutva may not be everybody’s cup of tea, but it is, under the Modi administration, allowed to contend along with the Bishops, Maulanas and the Godless Communists. No one can accuse this government fairly of a lack of tolerance, given the virulence of the regular attacks against its policies and actions.

Foreign Direct Investment (FDI) has picked up, aggregating to $156 billion in the three years, with $56 billion of it coming in 2016-17 alone. Likewise, Foreign Institutional Investors (FII) have, along with Domestic Institutional Investors (DII), taken the stock market to all-time highs at present.

Defence Manufacturing, just beginning to operationalise, alone has the potential to absorb $150 billion in investment per annum.

The Make in India programme has been most successful so far in the automotive and electronic industries, accounting for some $56 billion in investment.

FII jumps every time there are administrative reforms to widen and deepen the debt market in particular and as our companies at the top end get bigger. DII has grown substantially and the mutual fund industry is bigger than it has ever been.

GDP growth will probably return 7.5% for this fiscal, and over 8% in 2018, after GST has contributed its mite.

Inflation, thanks in part to persistently low oil prices and a strengthening rupee, has halved, falling to 4% from 8%. The fiscal deficit is now targeting 3.2%, with 3% in 2018.

Rural electrification and roads are other success stories. Every village is slated to be electrified by mid 2018. Two crore poor households have received LPG.

The Indian government today, is, above all, on a massive infrastructure build-up to drive GDP growth, provide employment and boost modernisation.

It is building city metros for mass transportation, putting in new-fangled bullet trains and modernising the long neglected Railways. The Northeast of the country is being inducted into the mainstream. The aviation sector too has been made more accessible.

Its divestment and privatisation drives have been muted, and the Modi government does not seem to be on a particularly strong privatisation drive in areas other than defence production.

Socially, it is on a drive to reform the narrative of India, from reservations, quotas and vote-bank based development to its sabka saath, sabka vikas platform.

This government appeals not only to India’s youthful voter, now in a 65% majority at least till 2035, but also to Muslim women, long suppressed by medieval practices, and the Shia minority, shunted aside quite often by Sunni, even Salafist majorities. This is being borne out by rising voting percentages in BJP’s favour, trending towards 40% or even more.

The old “secularist” versus Hindu “communal” divide seems to have collapsed decisively.

Meanwhile, Modi, supported in this by the Election Commission (EC) is pressing for simultaneous elections to be held for the Centre and the states. This will also free up more time to concentrate on governance.

In the end, is the “True North” for electoral politics changing towards a more inclusive polity? One composed of those not served by the old order. If that is so, it is the most hopeful prospect to emerge out of Narendra Modi’s first 1,000 days.

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