Modi Government’s half time – a status check

2.5 years out of 5 are over. Time to take stock.

To pass a judgement on any government’s performance is the most enjoyable and simultaneously most complex of tasks! Every conceivable factor can play a role in the judgement – personal inclinations, likings and hatred, cold facts, environmental factors and variables unknown and unseen. And if the government is led by a man called Narendra Modi, even a hibernating intellectual retired into oblivion can be aroused to an electric performance of emotions, such is the nature of things today!

Before we even speak of the "Modi Atomic Explosion against Black Money" through his move to render Rs.500 and Rs.1000 notes invalid, we take a look at the past 2.5 years!

Multiple internal and external factors impinge heavily on the performance of a government. These include – the state of economic and political governance during the immediate past, the policy direction of previous governments, general developmental atmosphere in the economy, natural factors that come unannounced, global economic outlook, emerging political conditions across the world, the state of our international relations, and interplay between multiple state agencies and authorities.,,, Economic survey of India
Welcome to the hot seat, Narendrabhai!

The Background 

The present Indian government, which assumed office in May 2014, is half way through its five year tenure. Since the previous government’s ouster was in the midst of an aggressive anti-corruption hype and loud calls for reinvigorating economic growth, expectations were sky-high. Further, fuel to the fire of hope was added by the incumbent’s own election campaign which was all-pervasive, heavily-funded, smartly designed and multifaceted. The ouster of UPA 2 and the inauguration of NDA was felt almost as an epochal moment. Things were about to get redesigned, reengineered and transformed magically.

Alas! The Indians electorate often makes this mistake. We underestimate our own gargantuan size, mind-boggling complexity and the sheer comfortable inertia we have settled in, and hope for a messenger from the heavens to set things right overnight. We want everyone to change things for us except us doing the hard part! And the present government, like earlier ones, has repeatedly felt the heavy burden of this anomaly of the Indian mindset. We forget the defining words of Gandhiji – Be the change you wish to see in the world.

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    • India - Key facts, statistics, numbers (all data for 2015 or running 2016)
      • Population - 133 crores (1.33 billion), GDP nominal - $2.25 trillion - Seventh globally, GDP PPP - $8.7 trillion - Third globally, GDP growth rate - 7.6%, GDP per capita nominal - $ 1718 (140th globally), GDP per capita PPP - $ 6658 (122nd globally), GDP composition - Services 50% plus, rest Industry + Services, Ease of Doing Business rank - 130, Exports - $ 273 billion, Imports - $ 410 billion, Forex reserves - $ 370 billion (8th globally)
30 months arguably is too short a period to assess the performance of any government in a vast, and hugely diverse country like India with multiple factors at play in tandem, including state governments that put to rest any ambitious project of the Centre through passive resignation.

Five focus areas of Narendra Modi government - click each to read

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    • Belief and Optimism
      • Recreate a sense of belief in India and Indians, through optimistic projections of the future. India is a young nation of 1.3 billion plus individuals, and if we together take one step, it is a huge forward march (his own words on 15 August celebrations). Indians love strong and passionate leaders (who doesn't) and Modi has exhorted huge crowds to be optimistic about India's future. It is a good starting point indeed. The tone in all his public speeches remains overtly optimistic - he knows that a leader is a dealer in hope! His dramatic anti-black money decision on 08th November, 2015 is a visible proof of his determination to go the whole hog.
    • Restructuring of Governance
      • Fundamentally restructure the governance processes, systems and approached through new methods, projects and work culture. Decades of ossified culture across government departments and widespread corruption has been eating away our own roots. Modi's style of making ministers take responsibility of even staff turning up on time in the morning reflects a sense of urgency about work output that's rarely seen in Indian politicians. His new projects and schemes usually span a huge scale, and are futuristic in vision. Best example - J A M - Jandhan - Aadhar - Mobile.  [आप इस पूरी बोधि को हिंदी में पढ़ सकते हैं  ##link##]
    • Arousing Citizen Ownership
      • Make Indians realize that we have to change the status quo, and no one else (the most hazardous thing for any political party to say). An example – Swachh Bharat Abhiyaan – which expects citizens to demand a clean environment, free of garbage and clutter, and seeks their active participation in the process. This is a risky gambit, as results can be verified through individual experiences. This shows Modi's ability to take high-risk initiatives that can tarnish his own image. One wonders why no other top leader ever spoke of such a basic quality-of-life issue that directly affects citizens!
    • International Outreach
      • Rebuild the international outreach of Indian power to balance and check the multiple threats emanating from India’s enemies. Modi has been criticised, vilified, demeaned and made fun of on social media for being an NRI prime minister who rarely visits India! But today, as we see huge international developments that affect India directly, perhaps the detractors may also feel a sense of safety in having a PM who boldly reaches out to international leaders for help and takes enemies head-on. And yes, his habit of not taking any family members or unproductive individuals along, and the no-liquor on-board policy has endeared him to the cost-conscious for sure!
    • Investment, Youth, Economy
      • Draw foreign investment in through multiple new plans, including streamlining local complexities and hopefully rebuild Indian youth’s capabilities through skilling. This is the largely unfinished agenda - in fact, it has only just started. India needs a massive skilling drive to make its 1.1 million youth entering workforce each month, employable. That is yet to happen. Also to be seen is whether Modi's reliance on foreign investment driving local manufacturing bears fruit, especially given the tensions with China on multiple fronts. If Modi can pull this through in the next few years, he would have made it surely.

Almost all agree that the huge sense of negativity in the country on all fronts, including the economic one, in 2013-14, was the culmination of more than two years of near non-governance, indecisiveness, policy paralysis and a state of near political chaos. Corruption was seen as being out of control due to a series of mega-scams across sectors being exposed by authorities like the CAG, and gleefully picked up by a hungry, shrill media. Whether this turmoil was a fallout of a coalition government where everyone was the unquestionable King, or the failure of a quiet and sober Prime Minister assumed to be holding no direct final power, or plain simple rapacious greed to loot the nation – one will never be sure of.

He gets to work

So Modi assumed power, and set about in his trademark CEO style setting things in a new mould. It was apparent from his first speech from Red Fort – on 15 August 2014 – that he means business. And “business” here meant a new mould, with new terminologies and structures bearing little or no resemblance to years gone by. It was politically an astute move, as icons got redefined in the months to come. Incidentally, his “business-like” approach earned him strict opprobrium from political opponents who blamed him for being pro-rich and anti-poor!
If we ask those who understand governance and politics as to what has surely changed, the answer is unanimous – the government genuinely seems to be making all efforts to mend things, through clear and transparent policies. That it hasn’t percolated down fully is something no one is surprised about.

Modi immediately faced three challenges click each to read

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    • Monsoon headwinds!
      • A two-year spell of poor monsoon, enough to make any government shake in its boots. Modi govt. gradually adapted to the situation, announcing some big-ticket insurance schemes (non-starter so far) and other relief measures
    • Political friction
      • Constant and brutal criticism by almost all other political parties, and entire media bar a few. Modi's trademark style is to focus on his work and projects, and let that do the talking.
    • Global headwinds
      • Economic, political & strategic – that seemed insurmountable. However, constant engagement with world leaders and economically powerful nations is beginning to show some positive traction for India

And his approach to tackle these immediate challenges was clear - Multiple new schemes and projects to assure farmers of minimum risk in farming, Focussing on delivering and not responding to every criticism, Reaching out to all major nations to rebuild bridges and recreate confidence.

The government's desire to redesign the processes and icons of governance in his own mould is nowhere more visible than the branding adopted to do that.

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    • Restructuring of icons and public consciousness
      • Deen Dayal Upadhyay Gram Kaushal Yojana – DDU-GKY, Deendayal Antyodaya Yojana – National Urban Livelihoods Mission – DAY-NULM, Atal Pension Yojana, AMRUT - Atal Mission for Rejuvenation of Urban Transport (earlier JNNURM), NITI Aayog (earlier Planning Commission), AAYUSH Ministry, Pradhanmantri Jan Dhan Yojana, J – A – M scheme, Atal Innovation Mission, Namami Gange etc.
Since this is how icons are created and brands built, Modi will leave his footprints for a long time.

The economy and structural reforms

On the economy front, despite all doubts about the rate of GDP growth, India has been steadily growing at a pace others would be envious of – more than 7 percent per annum. We are well ahead of almost all major global economies, which seem stuck in a global economic lull.

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    • Fundamental and structural reforms process in critical areas
      • Sectors that have witnessed reforms to push speed are ##asterisk## agriculture ##asterisk##  labour laws ##asterisk## financial regulations and monetary policy ##asterisk## insolvency and bankruptcy code ##asterisk## transparent auctions of telecom spectrums and other resources ##asterisk## ease of doing business ##asterisk## direct benefit transfer to deliver cash subsidies ##asterisk## Enactment of the GST Act ##asterisk## FDI policy for infrastructural projects ##asterisk## defence and railways ##asterisk## Extension of industrial licenses etc. Also, the investment outlook is looking up, despite gross challenges of apathy and bureaucratic delays at state and local levels. The economy is making a steady (albeit slow at times) progress in almost all important global indices that matter.  The government seems determined to contain the current account deficit (CAD) within reasonable limits, and ensure fiscal consolidation, aided by a non-recovery of global commodity prices which acts as a blessing for a net commodity importer nation India. And finally, he dropped his bombshell on horders of black money on the night of 08th of November, 2016, reforming the entire economy in one stroke!

Implementation and transparency dashboards

Equally crucial is the government’s constant monitoring of the progress of its policy initiatives from the highest level, which has kept the bureaucracy on its toes. Most international institutions like the IMF and the World Bank have hailed the reforms process undertaken by the government. Multiple transparent dashboards (some of which existed before too) have brought in the much needed visibility to work.

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    • Transparency Dashboards for public scrutiny
      • Various examples are ##asterisk## eTaal - Electronic transaction aggregation and analysis layer  ##asterisk## GARV dashboard - Online monitoring of rural electrification  ##asterisk## National Ujala dashboard - cutting carbon emissions through LEDs  ##asterisk##  VidyutPravah - check pricing of Electricity Boards etc. The courage shown in bringing this out in the open needs appreciation as failure to achieve targets will be publicly visible, and opprobrium earned, and Modi govt. surely would know that.

Poverty concerns

The government’s efforts on the rural and social issues concerning the poorer classes of the society are also novel initiatives. These include the Jan-Dhan Yojana, the Direct Benefit Transfer scheme, Pradhan Mantri Ujjwala Yojana, Soil health card scheme, Atal Pension yojana., Pradhan Mantri Suraksha Bima Yojana, Housing for all scheme, etc. These initiatives are directed towards building  a more inclusive society. They will take some time to show results.

The road ahead

However, there are still certain grey areas where a lot needs to be done, most of it complex. These include the banking sector, which is reeling under the huge pressure of non-performing assets. Fixed capital formation is another area that needs immediate attention of the government.
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    • Criticism of PM Modi and his government
      • Authoritarian style of functioning, Insensitive to weaker sections of society, Bringing too much change too fast, Leveraging the Hindu card from time to time, Promising the moon without a basis in reality, Poor bandwidth of ministerial capabilities, Lack of freedom to work, Throttles media freedom (latest), Pro-rich and not pro-poor [Check political news in our Bodhi News, here ##link##]
Job creation is one other major area of concern that is increasing the restlessness among bulging youth demographics. This was one of the big election promises that the government had made, but it has largely remained unfulfilled so far, due to slow rate of structural transformation of education and skilling sector, and its interface with manufacturing.
In the face of strong regional opponents but no major national rival, PM Narendra Modi seems all set to cruise along the remaining tenure with minimal friction. His electoral reverses in some states like Delhi and Bihar have been largely forgotten, and if he returns post the 2019 general elections, his unique stamp on India’s political history would have been cast deeply.

India, meanwhile, awaits a shift from a low-income to a middle-income nation status. Indians still await accessible and affordable medicine, easy public transport, clean air to breathe and a system that listens and supports the aspirations of 1.33 billion individuals. The last number grew a bit by the time you finished reading this Bodhi!

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    • The Modi Atomic Explosion against Black Money
      • On the evening of 08th of November, 2016, unknown to most outside the Council of Ministers, the most dramtic anti-black money step was announced by PM Modi personally on national television. He declared all Rs.500 and Rs.1000 notes as invalid legal tender from 12 midnight the same day! This has brought into sharp focus the government's massive drive against black money, Hawala-funded terror activities and massive widespread corruption across government offices and ministries. The development will have far-reaching transformational effects. We will update this regularly, stay tuned! Detailed Bodhi here

Learn more about transformational government schemes, in this comprehensive lecture. Enjoy!

Do share your views in the Comments thread below. It gives us motivation to see that readers have benefitted, and further adds value to this Bodhi.

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    • Bodhi Links (for deeper study; Caution: some may be external links, some large PDFs)
      •  ##chevron-right## RBI handbook of Indian Economy Sep 2016 pdf here ##chevron-right## PM Modi from Red Fort 15 August 2014 - video here ##chevron-right## PM India site - Governance track record here ##chevron-right## The power of J-A-M here ##chevron-right## Unleashing Indian entrepreneurial energies here ##chevron-right## Niti Aayog here ##chevron-right## e-Taal dashboard here ##chevron-right## Garv dashboard here ##chevron-right## Comprehensive GST information here ##chevron-right## Debate on GDP calculation - Two perspectives here ##chevron-right## Detailed Bodhi on demonetisation by Modi government here


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Bodhi Booster: Modi Government’s half time – a status check
Modi Government’s half time – a status check
2.5 years out of 5 are over. Time to take stock.
Bodhi Booster
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