Tenure of Transparency

In 2014, Shri Narendra Modi had appealed for 60 months to bring about systemic changes to free the country from a 60-year political legacy of corruption and nepotism that had turned India into a dynastic democracy, which had eroded the people’s confidence in the nation’s polity and government. The key issues were corruption, unemployment, alleviation of poverty and rising food prices/inflation that was reducing real income and pushing people increasingly below the poverty line. People across the rural/urban divide felt that for change to be meaningful these issues must be sincerely addressed. In 2019, what is the state of the nation?

Curbing corruption was the biggest challenge for the Modi government. Corruption had become a salient feature of governance and was embedded in every facet of public life. In 2009, then Deputy Chairman of Planning Commission, Montek Singh Ahluwalia, admitted that of every rupee allocated for the common man only 16 paise reached him. In 2015, Digital India was launched to implement the National e-governance plan. The plan aimed to put all front-end government services on a digital platform to enable citizens to access government services online and end the practice of giving speed-money in government offices. Pertinently 65% of the Indian population is aged below 35 years, educated and tech-savvy to transact on-line. By 2018, India had 123 crore digital biometric Aadhar identity cards, 121 crore mobile phones, 44.6 crore smart-phones and 56 crore internet users.

Black money is another aspect of corruption responsible for creating a parallel economy that undermines fiscal policy initiatives, fuels inflation and economic stagflation. In November 2013, the inflation rate in India had reached a record high of 12.17%. In June 2017, the inflation rate had reached a record low of 1.54%. The current inflation rate is 2.8%. Importantly, inflation is an extra burden, particularly on the poor, and controlling it should, therefore, be an essential part of economic policy in a country where 35% of the population lives below the poverty line.

Demonetisation had short-term negative effects and some people say that due to some flaws in execution it failed to unearth the total black money in circulation. But it was necessary for changing the Indian economy into a more formal, less-cash and tax-compliant healthy economy. A formal economy is needed for increasing the tax-GDP ratio to generate sufficient revenues to implement infrastructure development projects for economic growth and welfare programmes to improve the Human Development Index (HDI). In 2010/11 India’s tax-GDP ratio was 11%. Today it is 16.6%.

The implementation of the Goods & Services Tax (GST) was a major post-Independence tax reform that brought the unorganised sector into the indirect-tax net. In 2013-14 gross tax revenue was Rs 11.33 lakh crore. In 2017-18 it rose to Rs17.50 lakh crore. The projection for 2018-19 is Rs 22.70 lakh crore. Post demonetisation and GST the tax buoyancy increased, and the tax base widened substantially. The drive against black money is multipronged and continues with stricter enforcement of regulations and imposition of penalties.

However, demonetisation and GST disrupted the economy causing an economic slowdown and increasing levels of unemployment. Even though since late 2017 the economy has rebounded strongly and employment generation has picked up, given India’s growing work-force the solution to India’s unemployment problem lies not in jobs in the government or organised sector but in generating sustainable livelihood opportunities through self-employment. With this objective, the policy focus has been on encouraging start-ups and facilitating micro-enterprises in rural/mofussil areas through MUDRA loans.

Since 2014, the government has put in place an integrated infrastructure development programme to build roads, railways, airports, waterways and ports. The purpose is to bring down logistics costs from an uncompetitive 14% to a competitive 8% to enable the Indian economy and exports to compete globally. In April 2018, Bank of America observed that the building of highways, infrastructure development and acquiring of land had improved appreciably. In November 2018 the International Energy Agency (IEA) stated that India’s move to energise every village with electricity has been one of the greatest success stories of this year.

There have been major policy interventions to upgrade health-care. Among several initiatives to make quality health-care accessible and affordable for the underprivileged, Ayushman-Bharat, a cashless facility that allows poor people to access quality medical services in good hospitals has been practically feasible and effective. Richard Horton editor-in-chief of the British medical journal ‘Lancet’ has praised Modi for prioritising universal health-care with Ayushman-Bharat. Modi is the first Indian Prime Minister to do so. According to a UN Report, the Swachh Bharat Mission has played a significant role in reducing infant mortality. Access to safe drinking water and awareness drives on use of toilets to stop open defecation have improved rural hygiene.

For Assam and the Northeast completion of several stalled infrastructure projects will boost regional connectivity and growth. Narendra Modi has been the most scrutinised and criticised Prime Minister in the history of India. In 2014, unlike Dr Manmohan Singh, Shri Modi inherited a sluggish economy stricken by policy paralysis and corruption. Even though he has revived the economy with fiscal consolidation, progressive economic and structural reforms, improved grassroots level living conditions, dealt resolutely with China and Pakistan and raised India’s international stature he has got more brickbats than bouquets. However, even his worst critics agree that during his tenure New Delhi has been free of corruption, scandals and scams.