Narendra Modi government’s star-studded two-year celebration at India Gate in Delhi, on Saturday night, was a feast for the eyes. With the likes of Amitabh Bachhan, R Madhavan, Ravina Tandon and Kajol on board, the mega-event offered the ambience of a film award night.
The jamboree was in Modi's signature style and reminded one of the prime minister's Wembley show in November last year. At the culmination of the mega show that saw Modi’s ministers and industry leaders narrating the National Democratic Alliance (NDA) government’s achievements in the two years of its rule, Modi himself appeared on the platform and added to the list.
The PM spoke at length on the savings from subsidy reforms (a total of Rs 36,000 crore from addressing subsidy leakages), his efforts to tackle corruption and his usual jibes on the previous government’s ‘misrule’. Modi said a change has come, enumerated what his government planned to give to the poor in the ensuing years (for instance, LPG connections to crore people), in other words stating why the continuity of his government is a necessity for India’s poor.
Indeed, the Modi government has its share of achievements. It has made notable progress on the way natural resources are collocated, subsidies are routed to the target-class and in laying the foundation to build a social security network through its JAM (Jan Dhan, Aadhaar, Mobile) trinity. There aren’t any corruption cases against any of Modi’s central ministers in the 2-year period. The government indeed exhibited its reforms intent by taking up several small steps such as the passage of key legislations – Aadhaar, bankruptcy code, coal and insurance bills. Also, no one disputes the fact that Modi put India back to the global scene through his relentless campaigns.
If we evaluate, Modi’s NDA government symbolizes all that Manmaohan Singh’s UPA regime didn’t.
A celebration unwarranted
But, does any of this warrant such a big PR event to show off to the world that the government is doing the job it is supposed to do or to justify its massive 2014 mandate? Was such huge spending on full page newspaper advertisements and prime time slots at News channels necessary? Especially when the country is reeling under the pain of successive droughts and farmers are staring at yet another agrarian crisis. There has been no notable change in the ground-level situation in the real economy (despite what the GDP numbers show) and the problem of huge employment persists. It certainly doesn’t. The problem is that this government tends to celebrate too early.
The Indian economy is still balancing its walk through the edge of a major banking crisis, which isn’t a theory in the near future if the government fails to support the state-run banks given the manner in which bad loans are piling up. In the March quarter alone, state-run banks reported cumulated losses of over Rs 14,000 crore on account of huge provisions made on bad loans. Stressed assets currently account for almost 11 percent of the total loans given by the banks. Of these loans, Rs 4,00,000 crore are gross NPAs and an equal amount of restructured loans, which could also turn bad if economy doesn’t pick up fast. There is a substantial quantum of SMA-2 loans, which means they are overdue for 60 days. If a banking a crisis happens, that can take the country in reverse gear by several years, forget about competing with China on economic growth.
With private investment cycle yet to resume, stalled projects are on the rise and the 17-month consecutive fall in exports do not offer any comfort to the economy. Compared to what the government has ‘achieved’ in the last two years, its unfulfilled tasks are massive and it hasn’t crossed even half way to say that economy has turned the corner. A big reason why Modi’s economy has escaped an economic crisis, despite two successive years of drought, is due to crashing oil and commodity prices. That will not sustain forever.
Modi should introspect
Except the BJP government and its supporters and sympathizers, did the aam aadmi participate in the two-year celebrations? According to reports, as many as 454 farmers have ended their lives in Maharashtra's drought-prone Marthawada region alone so far this year. The numbers are up by 22 percent, compared to the 372 cases reported till the end of May last year.
In many places in Marathwada, water levels in reservoirs are down to just 1 percent, as against 8 percent during the same period last year. Number of deaths reported due to shortage of drinking water have spiralled. Has the government done enough to address the problem? However, a good monsoon will save the economy from a disaster, a third year of successive drought would put us back on crisis.
If the Modi-government chose to avoid the two-year jamboree at Indian Gate, admitting that the time isn’t right for a celebration when the country is going through a crisis and acknowledging that the economy is not out of woods yet, that would have been a bigger advertisement for this government. It would have been evident that the government is sensitive to the pain of the country's poor and is not oblivious to the ground realities of the real economy.
The good work the government has done should have been celebrated by 125 crore Indians too, not just an invited group of people at the India Gate that literally kept the aam aadmi —in Modi’s own parlance, the janta janardan – out of the fences of the festivities.
As mentioned earlier, the problem is that, in India, we tend to uncork the bubbly too early and even the good work this government is done will be lost in the clamour of unwarranted chest-thumping. That’s the reason why the balloon of 7.3-7.6 percent GDP growth the BJP leaders and top government bureaucrats often boast of was rightly pricked by RBI governor Raghuram Rajan when he said, “There are problems with the way we count GDP and which is why we need to be careful sometimes just talking about growth.” That didn’t mean, there is no growth in the economy. There is growth, indeed, but overstating it is dangerous.
What more, even if one reads between the lines of Subramanian Swamy’s now famous attacks on Rajan, there is an honest acknowledgement that economy is not doing well and job market is faring poorly. The fact is that there is uncertainty on both domestic and economic fronts that continue to threaten India’s economy – a slowing world (hence 17-month export contraction and possible reversal in commodity prices abroad) – and a fragile far sector that is heavily dependent on monsoons back at home. It’s certainly no time to celebrate.
As this government enters the second half of its five-year term, the focus will be logically more on appeasing the vote bank through more populist measures, rather than addressing radical reforms in the economy in preparation for the Uttar Pradesh elections in 2017 and 2019 general elections. That’s the reason why BJP think tank, Arun Shourie, criticized Modi saying he is managing only the headlines not the economy.
The two-year mega show slogans such as Ek Nayi Subhah and ‘change has come’ gives one the bad memories of ‘India Shining’ slogan launched by the NDA-government in 2003, which subsequently failed miserably. Even BJP’s top leader LK Advani had confessed later that the ‘feel-good factor’ campaign didn’t work well in the subsequent Lok Sabha elections. The Modi-government shouldn’t repeat the mistake. This incumbent government, with a huge mandate, is an opportunity to India not to miss its golden chance to emerge as a global power correcting its fundamental flaws.
So far, the Modi-government hasn’t managed to bring in big changes in the Indian economy that can translate into major job growth and prosperity. But, it is on the right track. Complacency can spoil the big opportunity.
Updated Date: May 29, 2016 15:12 PM