The corporate friendly government is being viewed as anti-farmer as they push unfriendly amendments to the Land Acquisition Bill
Modi’s biggest disadvantage has been the absence of second-rung leadership who can take decisions as the Prime Minister is absent for long periods from Delhi
The 2014 elections now feel like the change of a century, when the voter took power in his hand and changed the face of a decade-old stagnated political scene. From that turnaround, we have now reached the first milestone and the Modi government completes one year in power on May 26, 2015. This year looks like the year of consolidation for the new government, which is aiming at long-term policies rather than short-term results. BJP President Amit Shah, in one of his speeches, said that the government will present its 60 months (Five years) report card to the people to truly showcase what it has done and what it plans to do.
However, two budgets and a year in, it is a mixed bag for the Modi regime. His critics are finding more problems in the government than there actually are, and his supporters are seeking to explain even the genuine errors. What remains to be seen is if this consolidation strategy will pay off in the long term and if slow and steady will actually win the race.
Inflation touched a record low of (-) 2.33 per cent in March on cheaper manufactured goods and food items. While it is the fifth straight month that deflation has occurred, it is a direct result of the fall in global oil prices and the Indian government had no role in it. However, the Centre has got credit for it and Modi’s supporters choose to believe this. Unseasonal rains might affect prices to some degree in the near future but for the time being, Modi has a better image in this matter than UPA-II did at the end of its term.
Foreign relations have seldom been as good as now. Modi has travelled a lot, 47 days and counting, with over 13 trips to 15 countries, including twice to Nepal). These trips have bolstered the otherwise soft and diminishing stand of India on foreign affairs. Also, the Yemen evacuation was a significant achievement by domestic and international standards.
Market sentiment has been buoyant if not showing the utter optimism before the elections. However, some corporate heads like Deepak Parekh of HDFC have questioned when the real reforms will begin, while others remain optimistic, pointing at the reforms in central bureaucracy. Overall, India Inc is still with Modi.
Make In India, while remaining vague in terms of actual policy in the first six months, has lately shown signs of clarity. The deal to get French Rafale jets made by HAL was a good example of how Modi plans to bring in big international players and produce goods in the country. Modi’s international travel and his open invitations to countries like US and Germany are also indicators of the government’s plan for Make In India.
Foreign investments is crucial for India, which needs around $1 trillion over five years to 2017 for overhauling its infrastructure sector such as ports, airports and highways to boost growth. Raising of the FDI cap and relaxing policy in sectors like defence, railways and medical devices are being seen as positive steps. This outlook has also translated in FDI inflows into services sector, which grew by about 47 per cent to $2.64 billion in April-January last fiscal, includes banking, insurance, outsourcing, R&D, courier and technology testing.
Another big change made by the government is the constitution of the NITI Aayog. The mandate of the NITI Aayog is to engage with the states as a think tank rather than disbursing funds as was being done by the erstwhile Planning Commission. Fostering cooperative federalism, making states stronger, expediting implementation and ensuring better center state coordination is among the various identified goals of the Aayog. However, the success of the Aayog would rely essentially on working closely with the states and bringing credibility so that the states approach the Aayog for guidance.
The government has started providing the unbanked population with bank accounts through Pradhan Mantri Jan Dhan Yojana (PMJDY), which will help in achieving far reaching financial inclusion programme of the government. 125 million PMJDY accounts have been opened. More than 800 million people have already been issued Aadhaar cards and Aadhaar cards are being linked to bank accounts. Especially in the case of LPG subsidies, along with pensions and scholarships. Direct benefit transfers (DBTs) to bank accounts have also started. Looking at Parliamentary Houses, members of the 16th Lok Sabha worked harder in the budget and winter sessions than they have in the last 10 years, according to PRS Legislative Research. The Lok Sabha worked for 104 and 105 per cent of the sanctioned time and the Rajya Sabha for 106 and 68 per cent in the budget and winter sessions respectively. This statistic stands in sharp contrast to the Lok Sabha performance during the last winter session of 2013, which recorded only 15 per cent productivity.
The public is seeing propaganda in a number of acts of the government. Modi’s Mann Ki Baat has not often been taken as friendly discourse and his Teacher’s Day speech to students has been taken as pure marketing. The government’s attempt to foist Good Governance Day on Christmas has also not been accepted kindly by spectators.
In July 2014, the Union Cabinet approved amendments to three major laws— Apprenticeship Act, 1961, the Factories Act and the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act. In October 2014, the government introduced the first lot of labor reforms, which put an end to the Inspector Raj. The government also plans to introduce amendments to the Small Factories (Regulation of Employment and Other Conditions of Service) Act, 2014, and the National Workers Vocational Institute Act, 2015.
The second budget, presented this year, did not pursue the expected fast pace of reforms. There were 37 bills listed to be debated in the winter session in both Houses of the Parliament. The Lok Sabha passed 17 and the Rajya Sabha passed 12. Crucial bills, including the Insurance Bill, the Coal Bill and The Constitution Amendment Bill, hit roadblocks. This was attributed to the government’s minority in the Upper House, which might see a change by 2016-17.
With the government trying to run a tight ship, accessibility and transparency have become problems. The press has been barred from ministries and authorities like the DGCA. The inability of the government on issues like black money and releasing documents like the ones about Subhash Chandra Bose have also raised significant questions.
And the ugly
Politically, Modi has been silent about divisive comments made by his camp, except for a few statements, which have been taken by his critics as token gestures. Attacks against minorities continue, although the rate as yet is neither higher nor lower than in previous regimes.
The Land Acquisition Bill proved to be a bummer. The government could have been more proactive in selling the Land Reforms Bill to the public and explaining the exact benefits better. The Opposition stole a march over them by uniting in the face of differences. Now, the farmers are out on a warpath as they believe that the government is robbing them of their livelihood. A similar case of communication is required on the issue of cutting funds to a number of old age schemes as well. The Integrated Child Development Scheme saw a whopping cut of Rs 9,858 crore, against the last year’s budget of Rs 17,858 crore. The Rashtirya Grameen Drinking Water Scheme was cut by Rs 8,390 crore. The allocation for the Sarva Shiksha Abhiyan also came down drastically from Rs 9,193.75 crore last year to just Rs 2,000 crore. Even Modi’s pet scheme of Swachh Bharat saw a cut of Rs 635 crore across the country for the fiscal year 2015-16. While the government says that this is rationalization of funds as the state governments were not utilizing the allocations, a clearer message needs to be given to distance the government from its anti-poor image.
The government’s stand on security has been underwhelming in this year as well. India could not stop Zaki-ur Rehman Lakhvi, the 26/11 mastermind, from being released by Pakistan citing legal reasons. The very prominent issue of Illegal migrants has not been addressed adequately in this year as well.
The BJP has come out with a grand aim for its 20-year term. It aims to provide housing for all, 24-hours electricity, clean drinking water, toilet and connectivity to a road for each household, access to means of livelihood, medical facility in every village, a senior secondary school within five kms reach of every child, increase in agricultural productivity, better communication and access to opportunities so every Indian has a better chance at improving his or her life. However, for a country like India, reforms can’t be predicated on long-term political predictability. In this respect, Varanasi can be taken as a microcosmic example of India regarding Modi. Some places, like the ghats are being cleaned up, but long-term measures for reviving the city will take years to show their effect and criticism is building up about the viability of some of these plans.
However, Modi’s biggest disadvantage has been the absence of second-rung leadership. With the PMO centralizing most decisions, Modi’s physical absence from Delhi over long periods has also affected the pace of administration. Overall, Modi still retains his core supporters and those, including India Inc, who saw him as an alternative to the UPA. But on the ground, significant changes are yet to begin manifesting.