BJP and Modi – Hits & Misses till mid 2016

India is very young (median age of 27 years), thereby making it an utmost necessity that its youth be put to use in constructive, nation building work lest it get sucked into crime or terrorism.

Modi (PM Narendra Modi), for one, is a die-hard optimist. BJP (Bhartiya Janta Party) is a vehicle which keeps Nation first. It is an ideal combination for India’s prosperity.

Monitor the progress of Modi Government here – http://swarajyamag.com/achche-din-monitor

If one goes by the media narrative, we are in midst of multiple duels – that of India vs Bharat (meaning the West-eulogising ruling elite vs rural have not’s), that of neo-modern India (as a 70 year old independent nation) vs classical India (as an 8000 year civilisation) as well as crony capitalism/ crony socialism vs market economy cohabiting with a welfare state. But taking the right decisions, beyond contradictions, has been the remarkable achievement of this Government.

Presented here is a brief on Hits and Misses in first 2 years of Modi Government.

 

Two years of Narendra Modi Government

Two years of Narendra Modi Government

Hits

An economy running on old structure of PSU’s (Public sector units), led Congress to take India down the road of “Crony socialism” – old industrial families (akin to the crony capitalist Oligarchs of Russia) in connivance with dynasty Congress party patriarchs in Government, extracted benefits from the state through corruption and distorted free markets. Congress promoted wasteful public expenditure in guise of “Remove poverty” sloganeering – today hundreds of PSU’s exist which make no commercial sense – 4,00,000 employees get paid from Taxpayer’s money for no work and losses.

Then there are crony socialist Government laws and schemes – NREGA (National Rural Employment Guarantee Scheme), RTE (Right to Education), RTF (Right to Food), Land acquisition Act etc – all made by Congress bootlickers from NGO’s, with express purpose of votes but which are a burden on the Taxpayer since they are not serving any real goals, but only retarding growth.

Congress also distributed 10 lakh crore of loans to dubious promoters, all of which are now NPA’s (Non performing assets) on books of Banks.

Modi has done away with legacy Crony socialism. Latest recommendations from Niti Aayog clearly say that Government should be only in industries, which are strategic or are must-needed in the long-term, even if they are commercially nonviable. Bank cleanup is under process.

Then there is the IT (Information Technology) sector, commanding great heights and which has been promoted vigorously by Modi.

Modi’s primary focus is rightly on implementation of laws, rather than instituting them, for every problem. He is also weeding out old, useless laws.

Modi has abolished crony capitalism by a fair business regime which gives equal opportunities to entrepreneurs while promoting capable executioners. Case in point is the new Airlines policy which gives a uniform platform for new entrants, or auctions in Coal and Spectrum.

Modi is treating Indian and Foreign businessmen on equal footing, by a fair regulatory regime and by allowing wide ranging participation in auction of land and minerals. FDI limits have been massively increased across the board.

Modi is also rapidly promoting de-personification of country’s Institutions and making them accessible on the internet. The National Optical Fibre Network (NOFN) project, is connecting all 250,000 gram panchayats in the country through optical fibres, using the networks of Bharat Sanchar Nigam Ltd, RailTel Corp. of India Ltd and Power Grid Corp. of India Ltd and laying additional fibres. A total of 1,30,000 kms of fibre is being laid.

A stable regulatory regime needs continuity of policies and control on over zealousness of Public servants to go by the letter of the law rather than the spirit of it. Modi has accurately recognised this and drastic change of commercials and policies, be in Budget, or in regular administrative policies, has been done away with.

Modi is pushing massive infrastructure investments to boost GDP (Gross Domestic Product) and create a modern nation – be it in highways, railways, ports, waterways or airports. Sagarmala project, grid highways system, massive creation of National and rural highways, border roads, boost to regional airports and regional airlines being success stories.

Modi’s vision is an India completely internet connected and truly integrated into a globalised world.

Modi has also created a truly secular Government, which doesn’t recognise castes and aspires to harmonise and promote uniform religious laws conforming to human values of freedom, equality and liberty. His motto is Constitution first and Sabka Saath, Sabka Vikas – to be with all and to help in everybody’s development.

No one interested in upliftment of India can ignore Agriculture – Indian farmer needs to bring his produce to the market directly, have access to cold storage, warehousing, move up the value chain by getting into branded products and also conform to modern requirements like organic products. Modi’s National Agricultural Market (NAM) is a step in the right direction. He has also diversified agricultural insurance by getting Government to pay for Farmer’s premiums.

Modi is creating robust Export capacities with latest Technology, with Make in India initiative, albeit in an environmentally sustainable manner. He was instrumental in global signing of the Paris Accord.

Looking at US-Canada border or the free movement of people and capital in EU (European Union), Modi is aspiring to create the same for SAARC (South Asian Association for Regional Cooperation) – Project Mausam and increasing connectivity to Bangladesh, Myanmar-Thailand trilateral highway, Sri Lanka (bridge over the sea), Nepal, Bhutan and Afghanistan (Through Chahabar port in Iran) have been achievements for his Government.

Modi also aspires to make India a Financial hub of the world like London, with much deeper, widely held, efficient capital and debt markets. Modi’s vision is to keep taxes low and make INR (Indian National Rupee) fully convertible to enable the rich of the world to do business from India and make it a favourite destination for world’s richest and for headquarters of MNC’s (Multinational Corporations).

However, Modi is plugging Black money loopholes – Mauritius treaty revision, enhanced KYC norms for P-notes, agreement with Switzerland being case in point.

Modi also wants to strengthen the INR, because India is primarily a consumption theme, imports are high and infrastructure development necessitates import of technology intensive capital equipment. But this is WIP (Work in progress).

Then there are other popular initiatives – Clean India campaign, Save and educate Girls, curb on Black money, targeted subsidies through Aadhaar, Make in India, Defence production, Smart cities, the Power revolution, Digital India, Skill India, increase in Forex reserves by $100 billion and interlinking of rivers.

Misses

It is in Education and Healthcare that some reform pieces are missing – The base for a robust social fabric is proper education & healthcare, especially for our women and children – solutions like India’s light-asset, neighbourhood schools of pre-independence have to return. In Healthcare, there is hardly a substitute for investing in high-end Hospitals. Academic system has to undo the stress laid on rote system by evaluating students on their personality, stage presence, sports, music and communication skills.

Modi seems to be ignoring India’s burgeoning population – He would do better by instituting, for a fixed period, stiff restrictions on Government jobs to families with more than one child, to arrest population growth and raise standards of living across the board.

Besides GST (Goods & Services tax), Modi could transition the black money economy of India to a cashless economy like that of Sweden, by abolishing Income Tax in the long term. He is promoting technologies like Mobile Wallets already.

Licence Raj is gone from India, but Inspector Raj still remains. India is too lenient, democracy as practised here is too distorted and there is lack of fear of the adverse in minds of those with even small power. Public services, in West, Middle East, China, Japan, Europe, South Korea or ASEAN, are devoid of corruption. So, while corruption in top echelons there is humongous, but not in daily necessities – like Licenses, water, electricity, real estate certificates etc. Modi has completely removed top level corruption in India. But the only way out now for culling corruption at lower levels, is to bring death penalty for corruption in any public service.

Given the lack of respect for law in mind of many Indians, stemming from a Judiciary mired in humongous number of Court cases and hence in permanent coma, Modi can unclog Courts by moving intra-Government cases to arbitration panels. Modi should also slash on multiple appeal layers of our judiciary system to ensure justice is quickly & correctly delivered.

This is a tricky issue for the Government since Judiciary reports to no one – NO ONE in the system! While Modi has attempted to correct this by NJAC (National Judicial Appointments Commission) Bill, but Judiciary seems to love its “independence” so much so that it is not correcting itself and merely usurping more powers from the Legislature. Crores of cases are stuck, a large part of Judiciary is corrupt and there is no check and balance on them, just on the pretext of Judiciary’s “independence”! Modi is after fixing the Judiciary but it is again WIP.

Modi should bring a law to curb incessant sensationalism by Indian media.

Lastly, Modi should aspire to do away with all Reservations (in selections or promotions) because they kill meritocracy and sap institutions, but keep them only for sections which have been historically wronged, like SC’s/ ST’s (Scheduled Castes/ Scheduled Tribes), but that too up to a sane level and only in selections. Ideal being reservations only on economic basis, since now with creamy layer in SC/ ST’s too, the qualifying marks for reserved persons have jumped dramatically and those who benefited from reservations earlier, have become rich enough to not need reservations and compete on merit alone.

Going by how BJP and Modi are accomplishing things one by one, India is indeed in the right direction.

Reading reference:

http://indiatoday.intoday.in/story/modi-first-year-in-office-nda-25-achievements-25-challenges/1/439947.html

Author: Tushar Kansal

Tushar has been associated with the Project Assessment, Fund-raising & Financial Advisory realm in India for 2 decades. He has straddled multiple roles in Financial Advisory in Deloitte Touche Tohmatsu, PE Deal-maker in Times of India’s Brand Capital, in Corporate Finance roles in Aircel, as an Entrepreneur in Education field and as a CFO (Chief Financial Officer) till 2014. Prior to that, he was the Head of Debt for MTS India, where he was instrumental in raising $2.5 billion structured debt. Tushar has been involved in $6 Billion of transactions in Debt/ PE/ M&A across all asset classes. He has major experience in Education domain – From 2001 to 2006, Tushar led his Education entrepreneurship venture which provided Entrance examination training for Engineering colleges in India. The venture grew to 800 students and then was bought out by a marquee pan-India player in this space, as a strategic sale. Tushar is a panel member at CNN-News18. He is also a Columnist @ Business World, Indian Defence News, Business & Economy, Indian Economist, Digital Market Asia, OpIndia & Growing India.

Share This Post On

1 Comment

  1. Excellent Post! Well written!

    Post a Reply

Submit a Comment

Your email address will not be published. Required fields are marked *