Addressing NRIs and Indian-origin people at the inauguration of the 15th Pravasi Bharatiya Divas convention in his parliamentary constituency of Varanasi in Uttar Pradesh on January 22, 2019, Prime Minister Narendra Modi referred to former premier Rajiv Gandhi’s remarks on corruption in the country saying Congress that ruled for years did nothing to stop the “loot”, while his Government put an end to it and transferred about Rs 5,80,000 crore directly to the people under various schemes.
Modi recalled what Rajiv Gandhi had stated “of the funds Central Government sends, only 15 per cent of that reaches the people. If one rupee is sent from Delhi, only 15 paise reaches the villages, 85 paise disappear. Even as the country’s middle class kept giving tax honestly and this “loot” of 85 per cent also continued”. He added “I also want to tell you today’s truth as well. We used technology to end this loot of 85 per cent completely.”
“In the last four-and-a-half years, about Rs 5,80,000 crore, our Government, through various schemes viz. for a home, for education, for scholarship, for gas cylinder, and to other such ends etc directly gives to the people, transferring it in their bank accounts. Now, just consider that if the country was being run through the old system, then even today from this Rs 5,80,000 crore, about Rs 4,50,000 crore would have disappeared or leaked. If we would not have brought a change in the system then this amount would have been looted like the former Prime Minister had accepted…,” Modi said.
Modi also alluded to as to how the money was looted in the past and how his Government has stopped the loot. The modus operandi was to have fake people [who existed only on paper] in whose names the subsidy/financial assistance meant for the poor/beneficiaries was taken and pocketed by corrupt politicians and bureaucrats. The present dispensation has identified about seven crore such fake persons who have now been eliminated. This has been made possible by using the Aadhaar based system for direct benefit transfer [DBT] of subsidy/financial help to the beneficiary’s bank account.
This is hugely positive for peoples’ welfare and economic growth. The savings of Rs 4,50,000 crore is a mammoth amount. Instead of going into the pocket of a handful of corrupt politicians and bureaucrats, this money has actually gone to millions of poor for whom it was actually meant under the welfare schemes. This has bolstered their purchasing power leading to corresponding increase in spending on a wide range of goods and services thereby contributing to growth.
If, it had been business as usual i.e. the money landing in a handful of pockets as ‘corruption money’, then forget contribution to growth, this would have triggered all sorts of ill-effects such as hoarding food grain, pulses etc creating artificial scarcity, triggering inflationary pressure, hoarding real estate and their sky-rocketing prices, putting homes beyond reach of common man etc. The agencies would have been grappling with money launderers on a gigantic scale.
Second, utilization of the state financial assistance for the intended purpose viz. home, education, health, food etc has helped in improving the human development index – a pre-requisite for making our youth fit for jobs and getting self-employed. It makes our youngsters employable and prevents the risk of India’s demographic dividend turning into what some would term as ‘demographic disaster’.
Third, with leakages plugged, resultant savings are used for increasing coverage under welfare schemes. For instance, under PAHAL scheme for giving subsidy on LPG, implementation of Aadhaar based DBT from January, 2015 resulted in weeding out 35 million bogus beneficiaries. This together with over 10 million households surrendering under Modi’s “GiveUp” campaign catapulted the government to a position whereby it could cover millions of poor households under the scheme.
Fourth, the stoppage of loot gives more leeway in terms of increased availability of funds for investment in infrastructure viz., roads [including rural roads], highways/expressways, ports, airports, railways, inland waterways etc. For building infrastructure to support growth @8% plus, the country needs an investment of US$ 1 trillion – equivalent to about 40% of India’s GDP [gross domestic product]. At a time when investment by private sector is sluggish, this responsibility falls mostly on the central government.
Fifth, this has created a buffer enabling the government achieve the fiscal deficit target via pruning expenditure – without compromising on the effectiveness of the welfare schemes and investment in development work. At a time, when the country was grappling with the disruption [albeit short-term] caused by path-breaking reforms viz. demonetization and GST [Goods and Services Tax], plugging of leakages has provided the much needed succor.
The former Prime Minister had made the revelation [read: 85% of the money sent by the center disappearing on the way] over three decades back. One shudders to think of the gargantuan loot of resources especially during 1985-1999 and 2004-2014. This also happened to be the period when Indian deposits [albeit black cash] proliferated in safe haven foreign jurisdictions. If, only the governments of those days had taken measures to stop the loot, the economy would have been in a much better shape today. But, that was not to be as self-enrichment rather than national interest was more important to the then ruling politicians.
It is better late than never. Modi has made a good beginning. The momentum needs to be sustained. For that, it is absolutely necessary that he continues at the helm. If, the 1.3 billion people fail him [going by the electoral reverses suffered by BJP in Madhya Pradesh, Rajasthan and Chhattisgarh and results of surveys on current mood of the nation, this possibility is not ruled out], then not only the gains made would be reversed, but also, any chance of putting things back on the track will become a pipedream.