ON TRACK TO BRING ‘ACHHE DIN’
Despite facing several challenges on the political and economical front, Narendra Modi- led NDA government, riding high on its development agenda, has successfully put the country on the path of social development and economic growth.
There were multi- faceted challenges – two years of successive droughts and suicides by debt- ridden farmers, economic slowdown, social tensions, adverse poll verdicts in state assemblies like Delhi and Bihar which the government weathered. And NDA’s fresh resounding victory in Assam, has established that government committed to its pro- development agenda, continues to appeal masses.
The first two years of Modi government’s tenure was marked with ups and downs, lows and highs, slippages and successes, but one thing that stood out , was unblemished and highly energetic leadership of PM, Modi and resolve of his government to carry forward corruption- free agenda for the inclusive development (Sabka saath, sabka vikaas) and successfully steering economy on the path of development and growth. However, from the common man’s point of view, government’s inability to check retail inflation (price rise) and its failure to generate jobs as promised in the election manifesto of NDA were disappointing.
In contrast to UPA 2 which was known for its inertia, Modi government started with a bang to rejuvenate economy and to transform the lives of the common man as it embarked on the reform path. The government rolled out several well- meaning schemes like Start up India, Make in India, Digital India, Swatchh Bharat, besides missions on Smart Cities and Skill Development.
After a smooth take off, Modi government faced lot of turbulence. Particularly after NDA’s electoral losses in Delhi and Bihar, Modi had to face the onslaught of rejuvenated opposition, out to derail him from the path of reforms. Because of NDA’s minority in Rajya Sabha, opposition, led by Congress was successful in stalling many key reform bills. Aam Aadmi Party which stormed into power in Delhi, had running feud with the Centre and there were blistering attacks by AAP supremo and Delhi Chief Minister, Arvind Kejriwal on Modi over central government’s alleged interference in the affairs of Delhi government and Modi’s ‘anti- poor’ policies In the wake of Modi calling for ‘Congress- Mukt Bharat’, there were fierce attacks by Congress which described Modi government as ‘Suit Boot ki Sarkaar’- the government meant to benefit business class. What could be worse, NDA’s coalition partner in Maharashtra- Shiv Sena, missed no opportunity in running down Modi government. BJP forming government with PDP in J&K was though a high point, yet the party faced turbulence after the death of coalition CM, Mufti Mohammed Sayeed of PDP.
Modi faced opposition’s onslaught which dubbed him as a dictator, out to demolish democracy and democratic institutions, toppling democratically elected state governments, especially after the installation of BJP government in Arunachal following the fall of Congress government and imposition of President’s rule in Congress- ruled state Uttarakhand. The central government had to even face indictment by the Uttarakhand High Court. In fact Modi government has been enjoying uneasy relationship with judiciary. It was clearly established after Union Finance Minister, Arun Jaitley told Rajya Sabha that judiciary had been encroaching on legislative and executive authority and that step by step, brick by brick, the edifice of India’s legislature was being destroyed.
The government’s two years in office were marked by social tensions with quota agitations in Gujarat and Haryana and student unrest in Delhi’s JNU campus, Jadhavpur University, Kolkata, Film Institute Pune, NIIT Campus, Srinagar and suicide by a Dalit scholar in Hyderabad. There were controversies over beef eating and ‘Award Wapsi’ by noted writers, artists, litterateurs, against what they call growing intolerance of government. Human Resource Development Ministry also kicked up controversy for its attempts to rewrite history. These controversies rocked Parliament as well.
The biggest challenge before the government was to repair the damaged economy. In the words of Vikram S Mehta, Chairman, Brookings India, “The economy slowed in the last few years of UPA government. This was because of policy mistakes, bureaucratic inertia, delayed approvals, crony capitalism and market conditions”. However, Modi government is credited with ending the policy paralysis of UPA 2 government, instead firmly putting the economy on the growth path with excellent macroeconomic management. Notwithstanding computing discrepancies in GDP data, the positive impulses in India’s economy cannot be under estimated and there are clear indications that economy is on the upswing. The prediction of above normal monsoons suggests that India is set to surpass the 7.6 percent growth rate achieved in 2015-16, with agriculture likely to lead demand revival especially in the back drop of 2.3 percent growth rate in farm sector in Q4. Another bright spot is in the form of Q4 manufacturing growth rate of 9.3 percent, besides buoyancy in services sector. Experts believe that increase in capital expenditure by the government in infrastructure projects, will help the economy grow faster, topping 8 percent in FY 17, on the back of better monsoon, rural demand and ongoing reforms The government has rolled out majority of stuck projects worth 3.85 lakh cr. and investments worth 25 lakh cr. are expected in next three years which are likely to boost GDP by 3 percent. Going forward, there is a need to build on the gains and maintain momentum besides continuously focusing on agriculture to bolster private investment, which will be strong catalyst for job creation and achieving the ultimate objective of sustainable growth.
On the infrastructure front, the performance of highways and railways ministries has been quite commendable. Highway construction is set to cross record 6000 km this fiscal, surpassing the previous best of 5700 km achieved in 2012-13 during UPA 2 government. Indian Railways commissioned 4800 km of broad gauge track in the last two financial years against 1530 km in a financial year during the tenure of UPA 2. In a massive boost to railways, the ministry is setting up $30 billion fund with World Bank as anchor investor, to implement rail projects.
Modi government which is fully aware that like infrastructure, housing has a potential to boost economy , create large scale jobs, usher in inclusive development, launched Housing for All mission, aimed at constructing 5 cr. affordable housing units in urban & 1 cr. Houses in rural areas. Further to tap the potential of urbanisation in improving the living standard of people, the government launched a mission to develop 100 smart cities, besides AMRUT and PM Awas Yojana.
In the first two years, Modi government has also focused on energy sector. Considering that most of India’s energy need is met with the import of oil which is a big drain on country’s foreign currency reserves, the government has given priority to renewable energy. There is a clear road map to meet 40 percent of country’s energy needs from non-fossil fuels by 2030, scaling up solar power generation capacity from 6.7 GW to 100 GW by 2022. And the results are there to be seen – clean energy sector has achieved record capacity addition of 6937 MW in FY 16, with investments in renewable energy totaling 86000 cr. in last three years and installed solar capacity touching 7000 MW by April 2016. This remarkable achievement gets reflected in Renewable Energy Country Attractiveness Index in which India ranks third, next to US and china.
On the investment front, the government has undertaken reforms to boost the confidence of foreign investors like liberalisation of FDI in different sectors, tax reforms and policy initiatives for the purpose of ease of doing business. From the day one, Modi government has embarked on an exercise to streamline tax regime and usher in much- needed clarity, certainty and predictability. The crucial GST Bill which the government hopes to pass in the Monsoon session will turn out to be a game changer for both foreign and domestic investment. In order to woo investors, government clearances have become faster and as per CMIE data, problems limited to environmental and other clearances are no longer key impediments to progress of projects. And with the task of ironing out procedural bottlenecks showing tangible results, stage may well be set up for an up stick in investments. According to Environment Minister, Prakash Javadekar , faster approvals will unlock investments of Rs 10 lakh cr.
Counting Modi government’s achievements, it has given outstanding performance on foreign policy front. Notwithstanding, criticism of PM Modi’s frequent foreign trips by his detractors, the two years of government exemplify the robust foreign policy approach and widening strategic footprint. His diplomatic initiatives have not just raised India’s stature at global level, but also helped in addressing security concerns and improving trade relations. Modi successfully courted the US as an ally and befriended Japan with ‘Act East’ policy. Barring Pakistan and Nepal, Modi’s neighborhood outreach has paid rich dividends, especially with strategically important Iran and Afghanistan. India- Iran agreement to develop Chabahar Port and India- Iran- Afghanistan agreement for the development of trade corridor for the Iranian port through Central asia 9Especially after Pakistan put a spanner in giving land access) is considered to be a great game changer. Modi’s initiative of North East- Myanmar- Thailand highway is set to boost trade. India’s diplomatic outreach to major oil producing nations like Saudi Arabia, Iran, Qatar, Venezuela, etc. has ensured its energy security interests. One major diplomatic initiative of Modi government has been setting up of International Solar Alliance that will drive the future investment and innovation in solar sector. Modi’s ability to develop personal chemistry with US President, Barack Obama, helped to take India- US relations to newer heights, enhancing cooperation in security, defence and counter terrorism, besides other bilateral issues.
Notwithstanding this good record of clean and effective governance, Modi government faces a number of challenges ahead. On the political level, it faces the challenge of capturing power in crucial states like Uttar Pradesh besides others which go to poll in the coming years and increasing party’s strength in Rajya Sabha to ensure that its crucial reform bills don’t get stuck. Though Modi government has succeeded in getting Double Tax Avoidance Treaty with Mauritius to block flow of black money and secured Switzerland’s cooperation in hunt for black money, there is a real challenge to unearth the black money stashed by Indians in Swiss banks which was promised in BJP’s election manifesto. Modi government also needs to effectively deliver another promise of job generation. Though the government is credited with passing landmark Bankruptcy Bill, it faces the big challenge of tackling the large scale stressed assets of banks as Finance Minister Arun Jaitly says that improved health of banks is key to support the growth of economy by maintaining credit lending. The government has a cut out task to get crucial GST and Land Acquisition Bills passed. Moreover, it has to ensure that even important bills like Real estate Regulation Bill which have been already passed, are adopted by state governments. And while the government is well on the track, the real success of the government will depend upon on the ground change it brings in the life of a common man.