Modi’s political opponents have often accused him of dovetailing his policies and programs for the benefit of industrialists and businessmen ignoring farmers and workers. Nothing could be farther from the truth. If, there is any prime minister who has devoted maximum time to this vast constituency, it is none other than Modi.
For generations, poor farmers, landless workers and millions of others were made to survive on subsidies even as a big slice of that never reached them as stated by former prime minister Rajiv Gandhi in a most condescending manner “only 15 paise out of Rs 1 allocated under welfare schemes actually reaches the beneficiaries”. There was not even a whisper of making them economically self-reliant.
Modi has brought about a metaphorical change in. First, he has made a paradigm shift in the way subsidies are administered using technology to ensure that these directly reach their bank accounts with ‘zero’ leakage. Second, he has taken credible steps to empower them so that they develop the capacity to increase their income in a sustained manner and do not have to depend on doles eternally.
The successful direct transfer of LPG subsidy resulting in huge saving of Rs 15,000 crores annually and re-directing these to give subsidized LPG to the poor provides a vivid demonstration of his efforts on this front. He is replicating this for a host of other schemes including MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act], kerosene subsidy, food, fertilizers etc.
The benefits of this are unprecedented. Apart from gargantuan savings to national exchequer [around Rs 50,000-60,000 crores annually when all subsidies are delivered on direct transfer mode] and more widespread coverage of poor under state support [at present restricted due to paucity of resources], this will also help in curbing a major source of black money generation and associated ills.
Modi’s clamour for ‘economic empowerment’ of poor is even more praise worthy. It spans a wide spectrum embracing every section of the society who is disadvantaged and vulnerable. He has mounted this mission on the edifice of ‘financial inclusion’ by galvanizing financial institutions to reach out to their doorsteps.
For over 6 decades, the poor were condemned to ‘financial exclusion’ even as banking was the exclusive preserve of the rich and better-off. Within over 2 months of taking charge, on August 15, 2014, Modi vowed to remove the scourge of ‘financial un-touch ability’ and on August 28, launched the Prime Minister Jan Dhan Yojna [PMJDY], a versatile platform for their financial empowerment.
Under PMJDY, anyone can open an account in a bank with zero balance [known as ‘no frills’ account in common parlance]. It comes with a RuPay debit card, 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/-].
The scheme has met with resounding success with a record 200 million accounts opened under it and attracting deposits worth Rs 35,000 crores [as on February, 2016]. The banks who were initially reluctant to take it on board fearing burden on their balance sheets [courtesy, no-frills account] have reason to cheer. For poor households, the lady at home can keep her money safe in the bank and leverage this for meeting contingencies.
Modi ice-caked this with a ‘social safety’ for those families who have nothing to fall back when out of work or the earning member meets with an accident. Thus, by contributing just Rs 1 per month (to be diverted from PMJDY account), a person gets an accident cover of Rs 200,000/-. Further, by paying Rs 1 per day, he gets life cover of Rs 200,000/-. Under Atal Pension Yojna [APY], the government contributes 50% of premium [limited to Rs 1000 a year] to enable him get a pension of Rs 5000/- per month.
At present, more than 100 million persons are engaged in occupations such as vegetable/fruits vendor, small shop-keepers, beauty parlours & boutiques, mechanics, electricians, plumbers etc all in so called “un-organized” sector. They are at the bottom of economic pyramid and depend on money lenders for funds at exorbitant rates [24%-36%] as financial institutions do not even look at them. In a first ever, Modi has come forward to support them.
Under Micro Units Development and Refinance Agency [MUDRA] Yojna – launched last year – government has made arrangements to give them financial support. The loans are provided under three broad heads viz., Shishu – up to Rs 50,000/-; Kishore – Rs 500,000/- and Tarun – Rs 1000,000/- purely on the strength of business proposals and no security is insisted. They are issued debit cards which enables them withdraw money from ATM.
During 2015-16, a total of Rs 122,000 crores loans were disbursed to these groups. The target for 2016-17 has been increased to Rs 180,000 crores. The Yojna will continue for next few years till such time the government reaches a target of 60 million beneficiaries who will be developed in to India’s small entrepreneurs.
Any apprehension that directing banks to lend to weaker sections could affect their financial viability is without any valid basis. This is because past experience of MFIs [mutual fund institutions] giving loans to small enterprises shows that there is minimal risk of default from these sections.
A third major initiative is “Start-up India; Stand-up India” recently launched by Modi. Under it, each bank branch [currently, there are 125,000 branches] will encourage at least one Dalit or adivasi and at least one woman entrepreneur by providing loan and guidance. This way, we will have 250,000 entrepreneurs every year. In turn, this will create millions of jobs providing succor to over 10 million youth who enter job market every year.
Viewed in juxtaposition, the aforementioned three pioneering schemes viz., PMJDY, MUDRA and “Start-up India; Stand-up India” will provide the much needed bull work for metamorphosing the millions of hitherto vulnerable [and much neglected] groups to emerge as an independent economically powerful force.
For the farmers too, Modi – government has come up with structural solutions [boost to irrigation, soil health cards, rural roads, e-marketing of agri-produce, diversified agriculture etc] to increase crop yield and income on a sustainable basis. It has also launched Pradhan Mantri Phasal Bima Yojna [PMPBY] to salvage them from the vagaries of drought and floods etc for a miniscule premium 1.5-2%.
In short, Modi has made a genuine effort to lift majority of India’s poor out of their present dire straits and make them partners in development unlike the “Garibi Hatao” of late Indira Gandhi in the 70s [legacy carried forward by Rajiv Gandhi in the 80s] which was a mere slogan to hoodwink the masses and catch their votes.