On completion of 2 years in office, Modi – government is presently taking stock of what it has done and its achievements. Even while directing all his cabinet ministers to disseminate their work to the public at large, prime minister himself has taken the lead and is addressing a number of public rallies to highlight key thrust areas.
Undoubtedly, this government has many achievements to its credit and as rightly observed during his address at India Gate on May 28, 2016, highlighting all its major programs/schemes and initiatives will consume a full week of broadcast from Doordarshan [the official channel of the Government of India].
While, every bit of Team Modi’s dedicated and relentless work is worth capturing for its impact on ameliorating the conditions of millions of poor, empowering them and involving them in the process of development, the most notable achievement has been in regard to its fight against corruption and black money.
In prime minister’s own words, corruption has afflicted the entire government machinery like termite. Pertinently, for the first time ever in the history of independent India, Modi has catapulted discourse on this menace to the centre-stage and put his might to deal with it head on. And, the best part is that he is doing it in an open and transparent manner to take public in full confidence at every step.
Every year, hundreds of thousands of crores are being spent on a host of welfare schemes and programs purportedly to benefit the poor. But, in the past, the benefits never reached them or delivered partially. The sole reason behind this was corruption indulged in by those who were in charge of implementing schemes and delivering benefits. These included dubious players acting in concert with politicians and bureaucrats who pocketed the money that did not reach the poor.
Our former prime minister, Rajiv Gandhi exemplified this when he 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.
Modi has not only introspected and comprehensively analyzed the modus operandi of how the resources meant for the poor were being mis-appropriated but also, galvanized the entire government machinery to stem the rot. This is precisely what he shared with 1.25 billion people of India especially in key areas of subsidy on LPG, food under public distribution system [PDS], kerosene, pension and payments under Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA].
Using the Aadhaar based system for direct benefit transfer [DBT] under all mentioned welfare schemes [under it, subsidy is directly credited to the beneficiary’s bank account duly authenticated with Aadhaar], the government has identified “bogus” beneficiaries and excluded them from their purview. It has achieved maximum success in the LPG segment where a whopping 35 million bogus beneficiaries have been weeded out leading to saving of Rs 21,672 crores [Rs 14,672 crores during 2014-15 & Rs 7000 crores during 2015-16].
In the food sector, a total of 16 million bogus ration cards were identified in 4 states viz., Andhra Pradesh, Telengana, Puducherry and Delhi. By stopping release of subsidized food on these cards, the government has saved about Rs 10,000 crores. A similar exercise for weeding out duplicates under MGNREGA has resulted in saving of Rs 3000 crores during 2014-15. Likewise, savings in scholarships and pension schemes are Rs 2000 crores in Uttar Pradesh, Haryana, Kerala and Madhya Pradesh.
All put together, the government has saved Rs 36,500 crores. These are from a few states and on limited coverage. This is just tip of the iceberg. When, wholesome coverage all-over India embracing every nook and corner is achieved, savings would be mammoth. According to officials, putting the entire PDS and MGNREGA payments under Aadhaar-based system would save about Rs 100,000 crores. And, these savings will accrue every year.
These savings translate to 0.8% of India’s GDP. In other words, if the fiscal deficit target for current year is 3.5%, by eliminating bogus beneficiaries alone, the government can touch 2.7% and for 2017-18 when the target – as per fiscal consolidation road map laid down by finance minister, Arun Jaitely – will be 3.0% it can actually achieve 2.2%. This in turn, will have unprecedented beneficial effect on the economy by way of lower inflation, lower interest rates, higher sovereign rating and more of foreign direct investment [FDI].
Second, the savings can be used for increasing coverage of the poor under welfare schemes who have been left out. Modi has amply demonstrated this in case of LPG. By leveraging exclusion of 35 million bogus connections and another over 10 million households surrendering under “GiveUp” campaign last year, the government provided connections to 30 million poor households and another 50 million will be covered in next 3 years.
The same approach is being adopted for kerosene wherein in Haryana alone 600,000 bogus connections were stopped and more will follow as DBT started in April, 2016 catches momentum. This will be good for the environment as well as kerosene is currently being diverted for mixing with diesel adding to pollutants in the air.
A third positive spin-off would be increased availability of resources for investment in infrastructure viz., roads [including rural roads], highways, ports, railways etc. For building infrastructure to the required level, the country needs an investment of US$ 1 trillion [equivalent to half of India’s GDP] of which 50% has to be contributed by the government. The savings by plugging leakages in subsidy pipes will come in very handy for achieving this goal.
Finally, let us not forget that the corruption money is laundered producing all sorts of ill-effects on the economic system. This money is used for hoarding food grain, pulses, vegetables etc creating artificial scarcity and in turn, inflation. It goes for hoarding real estate/property leading to skyrocketing prices. In short, it can inflict serious damage in every sector of the economy. Most of it will stop once the leakages from welfare schemes are plugged.
In a nutshell, the biggest gift that Modi has given to the nation during last 2 years is that he is putting a stop to the loot of resources and giving back to millions of the poor to whom these actually belong or using for building infrastructure. This prime minister deserves a resounding applause for the spectacular feat that none of his predecessors even thought through forget making result-oriented efforts in this direction.