On completion of three years in office, even as Team Modi gears itself to celebrate with focus on disseminating to public at large its achievements, opposition parties [mainly Congress] have projected a counter narrative purportedly to show it in poor light.
Picking on BJP’s promise of creating 10 million jobs every year, they point towards a few hundred thousand jobs generated during the last 3 years to proclaim that the performance of this government is dismal. Coming from a party whose own record on all crucial economic parameters [including jobs] was abysmal, such criticism is laughable. During a decade [2004-2014] of UPA rule led by Congress, employment increased by a meager 15 million which is one-fourth of an increase of 60 million during the 6 year stint of NDA [1998-2004] led by charismatic Vajpayee.
Even so, looking at the job data in isolation from what all is being done to the overall economy would be a grave mistake. The more important aspects to look at are:(i) investment in infrastructure viz. building roads [including rural roads], rails, ports, airports, affordable housing, toilets, electricity for every home, schools, hospitals etc; (ii) creating a conducive policy environment for attracting private investment; (iii) increasing the ease of doing business and (iv) push to small and medium enterprises [therein lie prospects of creating new jobs]. .
Too early to look for jobs
The flaw in merely looking at jobs per se becomes more apparent when one considers the fundamental fact that employment can only follow [not precede] investment in building infrastructure and setting up projects. For instance, only after a road project is approved, all clearances obtained, land acquired and finances tied up can the work be started. Only then, we can see jobs via engagement of people on work contracts [direct employment] and indirect jobs via complementary industries supplying materials and services to said projects. You cannot put the cart before the horse!
So, a pertinent question to ask is whether Modi – dispensation has done the right things in all these areas. The answer to this is a resounding ‘yes’. There is evidence galore to demonstrate that it has acted with alacrity mobilizing necessary wherewithal to make it happen. Six broad areas of action need mention here.
End to ‘policy paralysis’
First, the government has put an end to the policy paralysis that had characterized the erstwhile UPA dispensation with an utterly weak head and multiple centers of decision making each acting as per its own whims and fancies. In contrast, now we have a decisive and dynamic prime minister who has a clear vision, knows what to do [and what not to do] and has the capacity to steer things on a well defined trajectory taking the entire cabinet along. This ensures that decisions are taken on fast track and implemented within strict deadlines.
Stumbling blocs in the way of investment – removed
Second, it has removed all stumbling blocs in the way of investment. The governance structures have been altered and procedures streamlined to make decisions ‘policy- driven’. All approvals and clearances relating to environment, forest, land et al have been put on electronic mode and are done in a transparent manner. The net result is projects worth hundreds of thousands of crores that were stuck for several years have been unclogged leading to surge in activities.
In roads and highways alone, projects worth Rs 600,000 crores are under implementation and within a year, this will touch Rs 1000,000 crores. This will give a fillip to investment in private sector which until hitherto has been languishing due to lack of demand. The government is also helping private corporate by resolving the problem of NPAs [non-performing assets] of banks in a fast track mode. This includes policy related support [e.g. anti-dumping duty on steel] as also restructuring of loans in specific cases.
Third, things won’t move unless resources are available. For funding its massive capital spending plans without compromising on fiscal consolidation, Team Modi has unleashed a two pronged strategy of increasing tax collection on the one hand and plugging leakages in implementation of welfare schemes on the other.
Boost to tax revenue
On tax front, it has used a mix of carrot and stick to entice people to pay up. For honest citizens, it has reduced tax rate and simplified procedures with emphasis on reducing harassment. For dodgers, first it gave them an opportunity to come clean using the income declaration scheme [IDS] window. Thereafter, demonetization [November 8, 2016] forced dodgers to disclose their black money leading to a record increase of close to 10 million in the number of returns filed. Concurrently, intensified search and seizures led to unearthing of thousands of crores.
As regards leakages, over three decades back, former prime minister, Rajiv Gandhi had observed “only 15 paise [100 paise make one rupee] out of every rupee allocated for the poor under welfare schemes actually reached the beneficiaries”. This was a tacit admission that brazen loot of public funds was going on but he did nothing to curb it. Indeed, successive political establishments felt elated recalling the statement but never introspected on its seriousness.
Leakages plugged
Modi has not only catapulted this grave crime perpetrated on the poor to the center-stage but also taken stringent measures to curb it. He has brought about a drastic reduction in leakages in major subsidy schemes viz. LPG, food under public distribution system [PDS], kerosene, pension and payments under Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA].
Using Aadhaar based system for direct benefit transfer [DBT], the government has ripped these schemes off “bogus” beneficiaries saving thousands of crores. Putting the entire PDS and MGNREGA payments under Aadhaar would save about Rs 100,000 crores annually. This money has come handy not only for funding its massive capital spend programs but also supporting welfare for the poor [for instance, 20 million gas connections were given in last 2 years and 30 million more will be given in next 3 years].
Doing business made easier
Fourth, the entire government machinery has been orchestrated to improve the ease of doing business. Thus, procedures have been streamlined, red-tape cut, efficiency improved and all approvals put on e-mode virtually eliminating physical interface. A dedicated team works in commerce ministry round-the-clock to provide one shot information relating project approval and even more crucially, to coordinate with concerned states for hassle free implementation of projects.
A ‘Shram Subidha’ [labour facilitation portal] is in place to help businesses in easy compliance with labor laws. The number of forms that an employer has to file related to these compliance has dropped to 1 [from 16 earlier]. This one consolidated return can be filed on-line. The businesses [and individuals] can submit ‘self-certified’ documents and for those with annual turnover below Rs 50 lakhs, the authorities trust the income declared by them for tax purpose.
The government has also implemented big-bang policy reforms like increase in foreign direct investment (FDI) cap in defense, opening up investment in railways, relaxation of guidelines for real estate sector, abolition of the archaic FIPB [Foreign Investment Promotion Board] and committed to avoid retrospective amendment in tax laws etc. These serve as icing on the cake leading to quantum jump in FDI [besides billions of dollars coming in via portfolio route].
Poor empowered
Fifth, taking a big leap forward in empowering the poor, Modi – dispensation launched the iconic PM Jan Dhan Yojna [PMJDY] under which over 250 million accounts have been opened with total deposits of close to Rs 90,000 crores. Moreover, to help people set up their own business and become self-employed, under MUDRA [Micro Units Development & Refinance Agency] scheme, about Rs 300,000 crores were disbursed to over 60 million persons in last two years – majority of these loans going to women.
Assault on corruption
Sixth, the most extraordinary achievement of this government is its success in the fight against corruption and black money [it was leading to wrong policy choices, disastrous results even from a good policy and prevented welfare money from reaching the poor]. Apart from a series of steps including demonetization and benami law, the most potent and effective fireball Modi built against this menace was his passionate call ‘na khaoonga, na khane doonga’ [neither I take bribe nor let anyone else]. This resonates in the entire political establishment & bureaucracy and deters them from indulging in corrupt practices. The result is there is not even one case of corruption in the last 3 years.
1.3 billion Indians trust Modi
To conclude, Modi deserves full marks for delivering on all that he promised and winning the hearts of 1.3 billion people by his steadfast devotion [he has not taken a single day leave during last 3 years, says it all] and sincerity of purpose.