Modi – government has come under flak for not redeeming its pledge made in the election manifesto to provide 20 million jobs every year. On the face of it, the charge may stick as the actual job creation during the last three years of its stint is a few hundred thousand.
But, on a closure look, it turns out that during the last 7 decades since independence, if there is any political dispensation that has worked sincerely and with full dedication for solving problems facing the people including unemployment, it is the present government. All those watching the actions of Team Modi ‘objectively’ and ‘dispassionately’ will not reach any other conclusion.
On jobs, which depend on expansion of economic activity across various sectors viz. industry, services, agriculture etc, it is working hard to give a boost to all these areas besides making the macro-economic environment conducive.
It is focusing on restoring confidence in the ability of the government to take decisions, getting rid-off bureaucratic red-tape, simplifying procedures, expediting project approvals, improving the ease of doing business, eliminating cascading effect of taxes and duties, bringing the informal sector in to the mainstream economy and taking all steps needed to empower the people.
A big bottleneck in the way is lack of infrastructure. In this regard, the government has taken the lead in building highways, roads [including rural roads], ports, rails, airports, waterways, irrigation etc. Equally crucial, it is investing heavily in social infrastructure viz. schools, hospitals, colleges, houses, toilets etc. It is undertaking massive investment at a time when, spend by private sector is sluggish [courtesy, the over-leveraged balance sheets of corporate and high non-performing assets (NPAs) of banks]. These steps will go a long way in laying the foundation for fast growth.
The biggest enemy of development is corruption which was causing leakages from welfare schemes, delivery of services and taxes payable. Put simply, it involved mis-appropriation of resources – meant for development and welfare of the poor – by corrupt politicians and bureaucrats. The situation was akin to a container with a big hole in it. Team Modi has taken some bold steps such as demonetization, introduction of GST [Goods and Services Tax] and transparency in decision making to plug it.
These are all works-in-progress – a marathon mission undertaken by the government to fill the void from the past. It is funding these from additional revenue [including tax garnered from dodgers/hoarders of black money] and money saved by plugging leakages. When, complete the deliverables will be high octane. This will open up opportunities for employment on a gargantuan scale.
Meanwhile, the government has brought about a paradigm shift in the way income of the majority of unemployed can be increased and they are made economically less vulnerable. Unlike in the past, when successive dispensations followed a stereotyped course of giving jobs in formal sector [with very limited scope], Modi’s main focus is on helping people in the ‘informal’ sector to stand on their own feet. In this regard, two flagship schemes deserve special mention.
First, Prime Minister’s Jan Dhan Yojana [PMJDY] – launched by Modi in August, 2014 – is a mammoth nation-wide financial inclusion project that seeks to bring every household in India within the ambit of the banking system. Under it, a poor family can open an account each with ‘zero’ balance and get a RuPay debit card. It comes with an overdraft facility of Rs 5000/- and an accident insurance cover of Rs 100,000/- . Persons who opened account before January, 2015 also get life cover for Rs 30,000/-.
Already, 300 million accounts have been opened under PMJDY with deposit of more than Rs 60,000 crores alluding to substantial increase in savings. A study by State Bank of India [SBI] shows that “village residents who opened bank accounts under the scheme may be saving more and cutting back on their consumption of alcohol and tobacco”. The study also points to “meaningful drop in retail inflation in states with more than 50% share of Jan Dhan accounts in villages”. It also found an increase in household medical expenditure in some states viz. Bihar, West Bengal, Maharashtra and Rajasthan.
The scheme has helped poor families keeping their savings safe and increasing their spending on health care besides help in reining in inflation. It also provides ‘social safety’ by way of accident insurance cover for Rs 100,000/-. Additionally, under PM Suraksha Bima Yojna [PMSBY], by contributing just Rs 1 per month [to be diverted from Jan Dhan account], a person gets an accident insurance cover of Rs 200,000/-. Under PM Jeevan Jyoti Bima Yojna [PMJJBY], a contribution of Rs 1/- per day gets it life insurance cover of Rs 200,000/- Further, under Atal Pension Yojna, the government contributes 50% of premium limited to Rs 1000 a year.
The Jan Dhan account also helps the poor receive in full financial assistance/subsidies given by the state under various schemes viz. subsidy on food, fertilizer, LPG, kerosene etc. For entrepreneurs, running their small businesses, it helps them better manage their cash as also loans available under government sponsored schemes.
Second, under Micro Units Development and Refinance Agency [MUDRA] Yojna – launched in 2015 – loans are given to persons such as vegetable vendors, small shop-keepers, beauty parlors & boutiques, mechanics, electricians, plumbers etc who have so far been denied access to formal sources of finance. The loans are provided under three broad categories viz., Shishu – up to Rs 50,000/-; Kishore – Rs 500,000/- and Tarun – Rs 1000,000/-. These are given without insisting on security as collateral. The banks have so far disbursed loans worth Rs 320,000 crores to about 75 million persons.
Besides, for small and medium enterprises [SMEs], the government has increased credit guarantee limit by Deposit Insurance and Credit Guarantee Corporation [DICGC] from existing Rs 10 million to Rs 20 million and working capital [WC] limit from 20% to 25% [for borrowers transacting on digital mode, this is 30%]. For enterprises with turnover up to Rs 20 million annually and conducting all of their transactions in digital mode, applicable profit for ‘presumptive’ tax will be reduced from existing 8% to 6%.
To sum up, Modi – government has not only taken steps to boost economic growth which will deliver millions of jobs in the medium to long-run, it has also helped millions to set up their own businesses which unfortunately, do not get reflected in job data [courtesy, poor collection and record keeping]. The public must not allow itself to be swayed by the critics whose sole aim is to malign its image.