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Three years after, and two to go

The biggest disappointment for industry and for the economists who rooted for Modi was the way in which he could do nothing for the big promises he had made to them

Monday May 29, 2017 1:58 PM, Amir Ullah Khan,

Three Years of Modi Govt

The NDA government has completed three years and there are large advertisements in all newspapers reminding us of the same. Actually no one even refers to it as the NDA government, it is appropriately called the Modi Sarkar. No Prime Minister has held sway over his cabinet like Modi has. The previous two terms were always referred to as UPA 1 and UPA 2. But this government is known by the person who leads it, with an iron hand, in absolute control and the lord and master of all he surveys.

There has been enough written and discussed about PM Modi’s failures on the social front. He is seen as a Hindu leader and prides himself on his background in the sectarian RSS. His friend and collaborator Amit Shah comes with a formidable reputation similar to Modi’s. Together they have created a stranglehold over Indian politics that has given their government at the center a clear majority and their latest triumph in UP has resulted in a brutal majority. Politically speaking, Modi is the heavyweight champion in India today.

The issue that is far less debated in the performance of the government on the economic front. While the overarching theme was polarization and majoritarianism, Modi often about development. He surprised many when he even went so far as to promise development for all. The presumption was that sabka vikas would include Muslims, Dalits and women. While he himself never explicitly said so, his secular minded supporters kept repeating the sabka saath phrase, possibly to convince themselves that they had backed the right man. Some of them are definitely in doubt now.

However, let us focus on the economy here. How has PM Modi performed on overall development? The PM promised to give LPG cylinders and connections to all women under the poverty line in rural areas. There is no data on how many of the 5 crore connections promised have been delivered. All villages are to be electrified under another scheme by the end of 2018. Again we don’t know how much has been achieved. The problem with this government is that it does not encourage the media to question it. We may never know what the achievement level is. Rural roads, most people say have been constructed at a brisk pace.

There is a housing scheme that will provide Housing for all by 2022 and 4 crores houses will be built. The Jan Dhan Yojana has resulted in about 28 crores accounts being opened. But a large proportion of India’s poor still have limited or no access to formal financial institutions. Digital Baharat is supposed to get high speed connectivity to the entire country in the next couple of years, but even now internet penetration is less than 20% and the gender divide in digital inclusion is massive. Development for all clearly has not happened and is unlikely to happen soon.

There were other promises that were made. 9 per cent growth, Bullet trains, Skill India, Startup India, UDAY, Mnimum Government and maximum Governance were announcements long ago with little action thereafter. Much like the slogans on Clean Ganga and Swatch Bharat. The promises made through some really catchy phrases have all but been forgotten. Beti Bachao Beti padhao is not heard of anymore, like the Bharat Mata ki Jai slogan that was almost declared mandatory recitation a few months ago. It is however Gau raksha that has been successful through various draconian beef ban laws and vigilante groups in place.

The Prime Minister and his gang had declared several people corrupt and promised the electorate that people like Robert Vadra would be sent to jail almost immediately. There is no mention of Vadra these days and people like Mallya and Lalit Modi are sitting happily in London. On black money and money stashed in Swiss banks, less said the better as the sloganeering resulted in at best some miniscule collections under the various amnesty schemes launched. Demonetisation was a reckless experiment and the Finance ministry and RBI underline this by refusing to give any data.

There have been some successes though. Aadhar is clearly taking off now and with more than a billion people registered is a massive exercise that will definitely benefit the nation. However, the scheme is mired in controversies yet, with data privacy being a major problem. The GST is another big gain; the constitutional amendment has been carried out, and states have now signed up to implement GST this July. Despite the mindless slabs that have been put in place and the obviously fallout of lobbies wanting to get to lower rates, the GST is on its way. What is common to both these schemes is that they are both at least ten years old and will truly be useful a few years from now.

Ease of doing business is floundering. India’s rank refuses to go up. Rating agencies are loath to upgrade India’s position and true to form we will sulk and call them names. Make in India has nothing to show but iPhones that will now get assembled in India. Unemployment is growing leaps and bounds Government data from its major sectors shows job growth is at its lowest in ten years, with only 1.35 lakhs new jobs being created. The software sector is in chaos and the thousands of IT employees getting laid off is not a good sign of things to come.

The biggest disappointment for industry and for the economists who rooted for Modi was the way in which he could do nothing for the big promises he had made to them. Land acquisition has been completely forgotten and big projects continue to suffer on this count. Labour reforms have been buried under various layers, and state governments have been told to handle the issue by themselves. And of course, populism is back almost like never before. Forget subsidy rationalization, we now have the PM and the UP CM promise loan waivers and hand them out too.

There is very little that the economy scorecard has to show after three years of governance. Will the two remaining years result in some magical last minute sprint that will allow the government to make good some of its promises


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