The following chapter is an excerpt from Truth & Dare: The Modi Dynamic by Sanju Verma (Published by Blue Rose Publisher)
“The difficulty lies not so much in developing new ideas, as in escaping from old ones”, said John Maynard Keynes.
Keynes must have turned in his grave when former Prime Minister Manmohan Singh invoked him in Parliament in 2016, quoting his famous idiom, “In the long run, we are all dead”. Singh used this quote to protest against the Modi government’s game-changing demonetisation drive, aimed at curbing the black money menace in the country. The former Prime Minister, not known for his oratorial skills or political acumen, gave yet another glaring proof of how the insipid bureaucrat in him is all that is left of a man who started off as an economist and ended up as a servile figure-head, presiding for 10 long years over the most corrupt dispensation in the country. It was not for nothing that the UK’s Independent, in July 2012, referred to Manmohan Singh as “Sonia’s poodle”.
Coming back to Keynes, Singh and naysayers of his ilk would do well to know that Keynes was, in fact, amongst the biggest proponents of demonetisation. The essence of Keynesian economics is that while free markets and the private sector have to be the guiding force, state intervention is a must to raise aggregate demand because the private sector alone cannot be the balancing mechanism to provide jobs or growth. Keynes advocated lower taxes and increased government spending. In other words, he stressed on the need for a benign fiscal policy by the state, to boost growth, and that is precisely what the Narendra Modi government did in the last 4.5 odd years by reducing tax rates but improving the tax base dramatically, thanks to superior tax compliance.
Few know that historically, more than 80-90 per cent of the jobs created in India, in most sectors, were those created within the informal sector, with many workers over-worked but under-paid. Demonetisation re-balanced these glaring anomalies, giving growth and jobs, the much-needed impetus, Keynesian style. Keynesian economics relies heavily on two pillars. First, the Investment Multiplier effect, and second, avoiding the ‘Liquidity Trap’. The Investment Multiplier theory can be best explained by an example. For instance, if the government spends or invests additional Rs. 100 crore, the additional jump in income, output, and employment, will not be limited to Rs. 100 crore, but could be Rs. 300 crore or Rs. 400 crore or maybe even more, depending on whether the multiplier is three or four or even higher. The higher the marginal propensity to consume and save, higher the ‘multiplier’, and higher the impact on overall GDP, of any incremental and fresh spending by the government.
Demonetisation will, in more ways than one, remain an ode to Keynes and will, in the medium term, essentially, via the Multiplier effect, boost GDP in a manner that can alter the entire growth paradigm in India to far higher than eight per cent, en route to 10 per cent and more, with financialisation of savings playing a major role. For example, post-demonetisation, in 2015-16, 2016-17 and 2017-18, 59 lakh, 67 lakh and 1.6 crore retail investors, respectively, joined the mutual fund industry as per the Association of Mutual Funds in India (AMFI), in each of these financial years. The fear of the law which demonetisation inculcated is best amplified by the fact that not only were 3.37 lakh bogus companies struck off the ROC rolls, but more importantly, more than Rs. 37,500 crore of money belonging to these companies has been lying idle, waiting in the coffers of banks for rightful claimants to lay claims.
Speaking of demonetisation, the tea industry in Assam used to follow the British system of running the gardens with wages paid in cash or kind. To incentivise the tea garden employees to open bank accounts, the state government announced that Rs. 5000 would be credited to their bank accounts immediately opened postdemonetisation. The government followed up on the promise by launching the ‘Chah Bagicha Dhan Puraskar Mela’, via which, Rs. 2500, under phase-1, was transferred to each of the 7,21,485 bank accounts of tea garden workers across tea estates spread over 26 districts of Assam, with another Rs. 2500 to be credited on 15th Janury 2019, under phase-2. This cost the government Rs. 182 crore. Assam has a total of 792 tea gardens, out of which 685 fall in the Brahmaputra valley and the remaining 107 are located in the Barak Valley. In effect, more than 7 lakh tea estate workers, who were largely a part of the informal economy, came under the ambit of the formal economy post demonetisation, and there are countless such instances. That the highly ignorant statement on demonetisation from Manmohan Singh, who has represented Assam as a Rajya Sabha member in the Parliament, makes it even worse, is a different matter altogether.
Digressing a bit, it is important at this stage, to talk about ‘Liquidity Trap’; well, it is simply a situation where low interest rates fail to stimulate consumer spending because of poor velocity of money,which means money does not change hands often, due to overall slack in the economy. Post the global financial meltdown of 2008, much of the developed world, including the US and Europe, got into a ‘liquidity trap’, wherein, despite zero or negative interest rates, growth faltered significantly. No wonder that despite the US Fed expanding its balance sheet by more than four trillion dollars between 2008 and 2016, US GDP averaged at just 2.4 per cent in 2014 and 2015.
Unemployment rate in the US, throughout 2018, has been persistently less than four per cent, not necessarily because more jobs have been created, but perhaps because more people stopped looking for a job. While consumer confidence in October 2018 hit a 14-year high in the US with about 2,50,000 jobs being added in that month, there is a growing din that the US could be headed for a recession in 2020, after a Goldilocks phase in the last few years, thanks to Trump, who, via tax cuts and government spending, truly put America on the fasttrack, notwithstanding the fractious US-China trade stand-off, which has vacillated between strident rhetoric and a reluctant truce.
If Japan had two lost decades from 1991-2010, the US has, in the eight years between 2008-2016, straddled disinflation and recession, because Obamanomics relied on merely low interest rates and quantitative easing to do the trick. That one-trick pony obviously failed, and was a big reason why Democrats were defeated in the presidential elections in November 2016. By opting for demonetisation, and not rampant deficit financing like the US or Japan for that matter, Modinomics, in one fell swoop, averted the liquidity trap and the problems that Obamanomics was fettered with. Deficit spending certainly increases money supply, but may or may not increase growth, as was evident in Japan’s lost decades; whereas demonetisation increases the velocity of money, which means money exchanges hands more frequently within the formal channels of the economy, ultimately boosting aggregate consumption and investment demand, national income, output, and of course, employment.
Modinomics has undone the inept legacy of Singh and the erstwhile corrupt Congress-led UPA government that faltered between Nehruvian Leftism and Fabian Socialism. Even on the fiscal front, the Modi government has, without compromising growth, reined in the fiscal deficit to a mere 3.9 per cent of GDP in 2015-16, which fell further to 3.5 per cent in 2016-17 and 2017-18, which is a huge improvement from the 5.7 per cent in 2011-12 and 4.9 per cent in 2012-13, under an utterly incompetent Manmohan Singh who floundered between wanting to be a good economist and an astute politician, but ended up being neither as he had abdicated all responsibilities to more than 70 GOMs and EGOMs that ruled by proxy, reducing both the legitimacy and the credibility of the Prime Minister’s office in the process. Who can forget the extraordinary powers wielded by the National Advisory Council, NAC, also called Sonia’s “Kitchen Cabinet” by many, at that time?
Coming back to the Modi government, indeed, an area of exemplary performance has been on the front of external finances and is reflected in the fact that, while India’s external debt rose from $409 billion in March 2013 to $486 billion in March 2016, and then $514.4 billion in June 2018, India’s debt service ratio during this period improved by leaps and bounds, from just 5.9 per cent under an inept Congress dispensation in 2013, to a resounding 8.5 percent under the Modi government, as of March 2018. Even in June 2018, the debt service coverage ratio was a solid 7.5 per cent. Commercial borrowings continued to be the largest component of external debt with a share of 37.8 per cent, followed by Non Resident Indian (NRI) deposits at 24.2 per cent and short-term trade credit at 18.8 per cent, while long-term debt (with original maturity of above one year) was placed at USD 415.7 billion, as of June 2018. The fact that as of June 2018, short-term debt as a portion of overall debt stood at just 19.19 per cent, from an extremely uncomfortable 23.6 per cent under Manmohan Singh as the PM in 2013, is indeed the best vindication of the fact that Modinomics has married high growth with low inflation without compromising on external stability. The fact that foreign inflows, at $223 billion, in the first four years of the Modi government are almost 50 per cent higher than the amount roped in under the first four years of UPA-2 has, of course, been the icing on the cake.
“Dont find fault, find a remedy” – Henry Ford.
This quote by Ford best exemplifies the visionary, problem-solving leadership of Narendra Modi, who has chosen to find opportunities in adversities by treading a path rarely travelled. Indeed, the strongest endorsement of Modinomics comes from CEBR’s World Economic League Table Report of 2018, which states that India will overtake Britain at $2.65 trillion, to become the 5th largest economy in the world in nominal GDP terms, after having earned the enviable distinction of already having toppled France to become the 6th largest, in 2018.
Amongst the many firsts that the Narendra Modi-led government can proudly take credit for, is the fact that today, all of India’s 597464 inhabited villages are electrified; Akodara village in Sabarkantha district of Gujarat is India’s first digital village; Mawlynnong in Meghalaya is Asia’s most Swachh (cleanest) village, thanks, largely, to more than 9.56 crore toilets built under the ‘Swachh Bharat Abhiyaan’ across India on a war footing; Bulumgavan village in the dense forests of Melghat in Maharashtra, and Leisang in Manipur, finally received electricity for the first time in 70 long years; Tripura came onto India’s broad gauge map for the first time, only in 2016, despite becoming a state in 1972; Manipur witnessed the commencement of construction of the 141-metre high Noney rail bridge, the highest rail bridge in India; and of course, India joining an elite few, like Russia, China, Germany and Sweden, after PM Modi launched India’s first 12,000 horsepower electric locomotive from Madhepura in Bihar, on 10th April 2018, built jointly with French giant Alstom, showcasing the success of Make in India.
What an irony that the Madhepura electric locomotive project, which had been conceived way back in 2007, suffered from policy paralysis and political apathy under the Congress-led UPA, till the Modi government decided to operationalise it. The added success of Make in India is evident from the fact that while there were only 2 mobile handset manufacturing factories in India in 2014, today there are more than 200 such units, with global behemoth Apple Inc. using India to assemble its iPhones.
Undoubtedly, if there is one scheme that has revolutionalised the lives of millions of women, particularly in rural India, it is the PMUY, Pradhan Mantri Ujjwala Yojana launched in May 2016, initially targetting 5 crore connections to below poverty line (BPL) families by 2019, with the support of Rs. 1600 to each family. By end of December 2018, about 6 crore connections had been given under the scheme across 715 districts, of which 48 per cent belonged to the SC/ ST categories. From a target of 8 crore people to be covered by 2020, the Union Cabinet on 17th December decided to extend the scheme to every poor household below the poverty line.
The Ujjwala scheme was widely appreciated as the Census of 2011 showed that nearly 12.1 crore households used traditional stoves (chullha) in India. Out of 27 crore households, only 13 crore had LPG connections when the BJP government took over in May 2014. After that, over 12 crore households have been added in barely 4.5 years of the Modi dispensation, which is hugely commendable. Of this, well over 6 crore addition was through Ujjwala. At present, the three oil marketing companies – Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) – together have a consumer base of 24.72 crore active LPG customers in the domestic category, which is being served by 21,566 distributors. As on December 1st 2018, India had a total LPG penetration of 90 per cent. Based on government data, nearly 80 per cent of Ujjwala consumers come back to the oil marketing companies for a second refill, while 45 per cent take three or more refills in a year. Over 42 per cent beneficiaries of Ujjwala are Dalits. To promote the scheme, the government has also recently launched LPG Panchayats. PMUY vindicates the very ethos of Modinomics, which seeks to transform societies for the better.
Modi also launched the 10th round of bidding for award of city gas licenses in 124 new districts, which have been clubbed into 50 Geographical Areas (GAs) in November 2018. Once work pertaining to 10th round is completed in the next few years, natural gas, as fuel, will cover 400 districts and about 70 per cent of India’s population. When the BJP-led NDA government came to power in May 2014, only 66 districts were covered by City Gas Distribution (CGD) networks. But by 2018, city gas project work was on in 174 districts. In another 2-3 years, more than 400 districts will be under its ambit. CNG Stations to dispense CNG, which is being pushed as a cheaper alternative to polluting petrol and diesel as auto fuel, have increased to 1470 by 2018, from 947 in 2014 under the earlier Manmohan Singh government. Modi wants this number to cross 10,000 in 10 years and has been working towards that. Over Rs. 22,000 crore is being spent on laying new pipelines that will transport natural gas to the poorly connected eastern states of Odisha, West Bengal and further into North-Eastern states, making environment-friendly fuel available for industry and domestic use, so that natural gas consumption, which is slated to rise 2.5 times in the next decade, becomes the preferred choice.
India consumed 142 million standard cubic meters per day of natural gas in the fiscal year ending March 31st 2018. The gas sector is an excellent example of Modi government’s governance motto of “Reform, Perform, Transform”. Reforms taken by the BJP-led government between 2014-2018, has improved the performance of the sector, what with gas infrastructure being strengthened via a nationwide gas grid, city gas distribution projects and raising liquefied natural gas (LNG) import capacity. At least 3 lakh youth will get employment going forward in the (recently concluded) 9th round of bidding (for city gas licenses), based on rough estimates. What a pity that despite ruling India for the better part of the last 71 odd years, neither the Congress, nor its dynast puppets, like Manmohan Singh, did anything to strengthen the gas eco-system or to reduce India’s dependence on traditional fuel sources. Realising the vulnerabilities of India’s fuel economy, Modi government put in place various initiatives to empower India’s gas based-economy, including plans to set up 5000 compressed bio-gas plants by 2022-23, to convert agri-waste into bio-CNG. This would not only address the problem of agri-residue but also increase farmer income. Besides, 12 modern bio-refineries to convert biomass into fuel are being set up at an investment of Rs. 10,000 crore. Blending of sugarcaneextracted ethanol in petrol has jumped four times since May 2014 and the target is to take it to over 10 per cent levels of 3-5 per cent.
All these efforts will help fulfill India’s global commitment of reducing emission intensity by 33-35 per cent and producing minimum 40 per cent electricity from non-conventional sources by 2030, something which should have been done by erstwhile dispensations, yesterday. Downstream regulator Petroleum and Natural Gas Regulatory Board (PNGRB), had, in 2018, awarded licenses for 78 out of the 86 GAs put on offer in the 9th round of bidding in August 2018, to accelerate the move towards a gas-based economy.
If laying the bedrock for improving India’s “Gas Coverage” and reducing the country’s unwanted dependence on conventional fuels, by taking groundbreaking measures which will hold India in good stead going forward, has been one of the defining and high points of Modinomics, equally, it also lays bare that Manmohanomics, thanks to its culpable lethargy, failed to take any significant steps to reduce India’s “Fuel Vulnerability”. Again, early 2019, the Modi government had achieved all of these – electrification of over 2.5 crore households under the Saubhagya Yojana with effect from October 2017; over 1.9 lakh km of roads built under Pradhan Mantri Gram Sadak Yojana; vaccination of well over 3.28 crore people under the Indradhanush scheme; building 9.56 crore toilets under the Swachh Bharat Abhiyaan; commissioning of over 33 crore LED bulbs that saved over Rs. 17,000 crore; making 5,36,724 villages Open Defecation Free (ODF); distribution of over Rs. 5.37 lakh crore via DBT in 4.5 years to the rural and urban poor; covering 5441 schools under Atal Tinkering Labs; due recognition to 14,706 start-ups; scholarship applications received from over 1.26 crore people on the National Scholarship Portal; 23.66 lakh registered users under the Swayam scheme; benefits to 2.38 crore pensioners under the Jeevan Pramaan scheme and 1.24 crore people under the Atal Pension Yojana; extending paid maternity leave from 12 weeks to 26 weeks for pregnant women; establishing over 13,000 Kaushal Vikas Kendras; disbursing over Rs. 35,000 crore to Indian armed forces and veterans under the One Rank One Pension (OROP) scheme; extension of accident insurance to 13.98 crore people under Pradhan Mantri Suraksha Bima Yojana (PMSBY), life cover to 5.47 crore Indians under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and insurance to 14.39 crore farmers under the Pradhan Mantri Fasal Bima Yojana ( PMFBY); distribution of over 17.17 crore Soil Health Cards (SHCs); distribution over Rs. 1.69 lakh crore as subsidies via Aadhaar; over 1.35 crore farmers covered under e-NAM for better pricing of farm produce, setting up of over 3 lakh Common Service Centres (CSCs), versus just 84,000 that existed in 2014; besides, of course, opening over 34 crore Jan Dhan accounts, of which more than 50 per cent belonged to women, to ensure universal financial inclusion, in its truest sense. Also, Jan Dhan accounts, as of January 2019, had deposits in excess of Rs. 89,000 crore.
One area that was grossly neglected under successive Congress establishments, including Manmohan Singh, was higher education. Reversing that trend, besides of course giving autonomy to IIMs, between 2015-16 and 2016-17, the Modi government also set up 7 new IIMs in Amritsar, Bodh Gaya, Nagpur, Sambalpur, Sirmaur, Vishakhapatnam and Jammu, taking the total number to 20. In September 2018, the government decided to construct permanent campuses for these 7 IIMs at an area of 60,384 sqm. per IIM, with roughly 600 students per IIM, with the total cost assessed as Rs. 3,775.42 crore. With respect to IITs, the Modi government’s track record has been nothing short of exemplary, with 7 IITs in Jammu, Chhattisgarh, Goa, Kerala, Jharkhand, Andhra Pradesh and Karnataka being set up in 2015 and 2016, taking the total tally to 23, as of 2018. The sheer pace of Modinomics versus the cringeworthy laxity of Manmohanomics is evident from the fact that of the 23 IITs in India, in 71 years of independent India, 30 per cent were set up in just 2 years by the Modi dispensation! Again, of the 21 AIIMS instiutes in India, 14 were announced, where work has either been completed or is at different stages of completion, in the last 4.5 years of the Modi government, with the 22nd AIIMS, coming up in the state of Haryana. Add to that the fact that in December 2018, the Modi government decided to greenlight a proposal with an initial grant of Rs. 65 crore, to give Jammu & Kashmir’s Ladakh region, its first ever university in Ladakh, a long-standing demand of people from the region, including those from Leh and Kargil districts. What a pity that though J&K acceded to the Indian Union on 26th December 1947, neither the inept NehruGandhi dynasty, nor 10 years of Manmohan Singh, at the helm as India’s Prime Minister from 2004-2014, could give so much as even a university to the people of Ladakh. In sharp contrast, under the aegis of the visionary “Modinomics”, under the AMRUT scheme, 1146 pojects were completed at a cost of Rs. 2662 crore, with another 3191 projects in work-in-progress stage at a total cost of Rs. 53,345 crore, and an additional 434 projects worth Rs. 8922 crore have had their DPRs approved. Be it the Kollam bypass in Kerala, bringing the Sitapur to Lucknow railway track on the broad gauge network after 136 long years, or paving the way for a direct train service from Delhi to Leh, or for that matter, bringing Ladakh under the ambit of the national grid, Modinomics has set the bar high in terms of deliverables. Again, AMRUT, along with schemes like Heritage City Development and Augmentation (HRIDAY) and the ambitious “Smart City” mission, at a total cost of Rs. 2.03 lakh crore, with the ability to impact 9.96 crore urban Indians, are projects that are set to transform India in the years going forward, like never before.
Again, the fact that Moody’s upgraded India’s sovereign rating in, November 2017, to Baa2 from Baa3, for the first time in 14 long years; the fact that India moved up by 65 places at rank 77, in the World Bank’s global, Ease of Doing Business (EODB) rankings in the first 4 years of Modi’s tenure; and the fact that India’s forex reserves hit a lifetime high of $424.86 billion in early April 2018, are all a ringing vindication of the stellar pace of reforms under Prime Minister Narendra Modi. Apart from EODB, Modinomics has scored smartly on various other counts too – India improved its ranking in the Global Innovation Index (WIPO) from 76 in 2014, under an incompetent Manmohan Singh, to 57 in 2018, under Modi; from 65 in 2014, to 40 in 2018 in the Travel &Tourism Competitiveness Index; from 30 to 14 in the Climate Change Performance Index in the same period; from 40 in 2014, to 15 in 2018, in the e-Participation Index (UN); and from 118 to 96 in the e-Government Index (UN), during the same period. True, the country’s foreign exchange reserves dipped a tad bit as per Reserve Bank of India (RBI) data, to $393.718 billion in the week till November 30th 2018, mainly due to heightened volatility across most asset classes, currencies included, in the intervening months between August-November 2018, on the back of recurring geopolitical tensions and rising global protectionism. However, in this reporting week, foreign currency assets, a major component of the overall reserves, jumped by $787.9 million to $368.487 billion, as per the RBI data.
This is a far cry from 1990-91, when, saddled with forex reserves of just $1.2 billion, India had to pledge 67 metric tonnes of gold with the International Monetary Fund (IMF), to raise a paltry sum of $600 million. Even as recently as 2012, Standard & Poor had downgraded India’s credit rating to just a notch above junk status, courtsey, the Indian National Congress, which had driven the economy to a dangerous precipice. Numbers never lie and those who allege that the higher GDP trajectory is primarily because the calculation of GDP methodology has been changed from GDP at factor cost, to GDP at market prices, should know that globally, GDP is primarily calculated using the market pricing method, as it takes into account impact of both indirect taxes and subsidies. In fact, internationally, countries have gone a step ahead and embraced a ‘rolling base year’ methodology which effectively means that the GDP base year is changed virtually every year!
Growth with high inflation is meaningless as it hurts the poorest and the middle class, the hardest, and indeed, it is here that Modinomics scores handsomely over a jaded and tired Manmohanomics. While retail inflation and food inflation hit a back-breaking 11.24 and 14.72 per cent in 2013, eroding the purchasing power of honest tax payers and the salaried class, under Modinomics, retail inflation was a benign 2.31 per cent in November 2018, with food inflation at minus 2.6 per cent, vegetable and pulses’ inflation at minus 9.2 and minus 15.59 per cent, respectively.
Speaking of transforming the lives of rural poor, in 2018-19, over 54 lakh homes have been completed under Pradhan Mantri Awas Yojana Grameen (PMAY-G). In 2017-18, around 38.67 lakh houses were built under this affordable housing scheme that aims at providing housing for all by 2022. In 2016-17, 32.22 lakh homes were built. Contrast this with the number of houses completed under the IAY, Indira Awaas Yojana; only 10.49 lakh homes were built in 2012-13, under an inept Manmohan Singh government, reinforcing the lack of political will to go that extra mile for the poor and the marginalised.
Another outstanding example of how Modinomics has transformed the lives of the average Indian middle class tax-payer who works hard for every single comfort that he earns, is the UDAN-RCS, (Ude Desh ka Aam Naagrik-Regional Connectivity Scheme) of Government of India, with the objective of “Let the common citizen of the country fly”. It aims at making air travel affordable and widespread, to boost inclusive national economic development, job growth and boost aviation infrastructure. At the beginning of the scheme, out of total 486 airports, a sizeable 406 were participating unserved airports. The scheme has made rapid strides to add to this number by expediting the development and operationalisation of India’s potential-target of atleast 425 unserved, underserved, and mostly underdeveloped regional airports with regular scheduled flights.
Moving away from UDAN, it is time to take stock of an area that has unarguably been the worst legacy of Manmohanomics – the NPA mess and the rampant crony capitalism that it festered. In sharp contrast, be it amendments to the Chit Fund Act 1982, operationalising the Benami Transactions (Prohibition) Amendment Act, 2016, or the NPA Ordinance that was promulgated in May 2017 to authorise RBI to intervene in directing banks to resolve default cases under the Insolvency and Bankruptcy Code (IBC) – the Modi government has, in a short span of 4.5 years, brought sweeping economic reforms to uproot corruption, with the crown jewel being the Insolvency and Bankruptcy Code (IBC), which has successfully resolved thousands of default cases, via the National Company Law Tribunal (NCLT). However, it is the Fugitive Economic Offenders Bill 2017, which gives the authorities the power to confiscate and sell the assets of wilful defaulters, which is, by far, one of the boldest reforms by the Narendra Modi dispensation, to nail scamsters who wish to evade the due process of Indian law courts.
One area of the Modi administration, which deserves kudos, is the effective and seamless manner in which foreign policy and economics have blended together harmoniously. On 22nd November 2016, Switzerland and India signed a joint declaration on the introduction of the Automatic Exchange of Information (AEOI) in tax matters on a reciprocal basis. Both countries intend to start collecting data in accordance with the global AEOI standard in 2018 and to exchange it from 2019 onwards. This, along with amendments in Double Taxation Avoidance Agreements with Cyprus, Luxembourg & Mauritius, are giant steps in the move to come down hard on black money and unaccounted wealth, and will only further hasten the process of eliminating toxic reams of parallel economy and, formalise the informal economy in India. As an aside, let it be known that even something as basic as merging the Forward Markets Commission with SEBI, was finally done by the Modi government.
Another area which showcases how Modinomics has taken centre-stage on the global diaspora, is India’s growing stature in the Regional Comprehensive Economic Partnership (RCEP), which aims at economic and technical cooperation and trade facilitation and loosely accounts for roughly 25 per cent of world GDP, 30 per cent of world trade and 70 per cent of cross border flows.
RCEP is being negotiated amongst 16 countries, comprising 10 ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) plus six ASEAN Free Trade Agreement (ASEAN FTA) partners, namely Australia, China, India, Japan, Korea and New Zealand. India has managed to obtain balanced outcomes in its favour in the application of the Dispute Settlement Mechanism in both Standards Technical Regulations and Conformity Assessment Procedures (STRACAP), and Sanitary and Phytosanitary (SPS) measures.
Again, Narendra Modi’s ambitious International Solar Alliance, launched in 2015 to galvanize 121 potential member countries to increase their solar footprint, to mobilize $1 trillion to generate 1000 GW of solar energy by 2030, is about providing clean energy to the future generations through effective policy management in the larger global context. Narendra Modi receiving the “Champions of the Earth” award in October 2018, jointly with French President Emmanuel Macron, is about Modi’s larger commitment to the basic ethos of the Paris Climate Agreement and forums like UN Climate Change Conference (COP24), held in Katowice, Poland. No wonder, therefore, that the likes of UN Chief Antonio Guterres, have been generous in their appreciation of Modi, on this count. Keeping its tryst with clean fuel, India has, in fact, been running a fiercely competitive renewables auction program, resulting in some of the lowest electricity tariffs seen anywhere. In Gujarat, for instance, in 2018, bidders won 500 MW of PV capacity at tariffs equivalent to $33 per MWh, without any index linking. One aspect of Modinomics that has skipped the attention of many, but deserves appreciation is the tremendous amount of work and the results that followed, in terms of improving operating parameters of Central Public Sector Enterprises (CPSEs), wherein total investments in all CPSEs, as on 31st March 2017, were 7.7 per cent higher at Rs. 12,50,373 crore versus the corresponding figure on 31st March 2016. Also, the net worth of all CPSEs increased from Rs. 10,79,753 crore on 31st March 2016, to Rs. 11,07,981 crore, on 31st March 2017. Contribution of CPSEs to central exchequer, by way of indirect taxes, duties and dividends, rose by a solid 39.78 per cent to Rs. 3,85,579 crore in 2016-17, versus Rs. 2,75,841 crore in 2015-16. The moot point to be noted here is that, under the aegis of Manmohanomics, most CPSEs had been treated like personal fiefdoms, compromising their financial integrity, till Modinomics walked in and changed the sweepstakes involved, undoing decades of damage that had been done.
Eventually, Modinomics versus Manmohanomics, is not about mere numbers or statistics – it is as much about the “Majboot” versus the “Majboor”, and needless to add, the ‘Majboor’ in this discussion is none other than Dr. Singh, once infamously described by an international publication as the “PM who was in office but not in power”, summing up the decadent lost decade under Manmohan Singh, that was characterized by rampant corruption, policy paralysis, political apathy, crony capitalism, financial subversion of institutional mechanisms, a crippled banking system riddled with fraudulent evergreening of loans, agrarian distress, infrastructure bottlenecks, socio-economic disharmony, and last but not the least, acute governance deficit, which became the hallmark of the thoroughly incompetent and moribund Congress-led UPA establishment. In glaring contrast, Modinomics, under the Modi dispensation, ushered in a remarkable and inspirational change in the entire governance-oriented narrative, with its hectic pace of work which is reflected in various things – before Modi took charge in May 2014, gas coverage stood at 48 per cent; bank penetration at 50 per cent; rural road connectivity at 55 per cent; electricity coverage at 70 per cent; rural sanitation at 38 per cent; average addition to installed power capacity at 4500 MW per year; optic fibre network coverage at less than 0.5 per cent; solar power capacity of barely 2650 MW; average annual FDI at $36 billion; average retail inflation at roughly 12 per cent; railway track addition at 4.1 km per day; and only 99 Jan Aushadhi stores, are symptomatic of the yawning gaps between promise and delivery, by the erstwhile Manmohan Singh led establishment. In 2018, after 4 years in office and in power, Modinomics unleashed India’s true potential with India’s share in world GDP moving up from 2.43 per cent to 3.08 per cent. As of December 2018, gas coverage was at 90 per cent; bank penetration at almost 100 per cent; rural road connectivity at 91 per cent; electricity coverage at more than 95 per cent; rural sanitation at more than 95 per cent; average addition to installed power capacity at 25,000 MW per year; optic fibre network coverage at 50 per cent; solar power capacity at 20,000 MW; average annual FDI at $60 billion, average retail inflation at sub 4 per cent; railway track addition at 6.53 km per day; and more than 4410 Jan Aushadhi stores supplying more than 800 medicines and 154 surgicals and consumables, with savings of anywhere between 50-90 per cent in the area of healthcare, including knee implants and cardiac stents, which are cheaper by a solid 69 and 85 per cent, respectively.
It is amazing what you can accomplish if you do not care who gets the credit, said Harry S Truman, eons back. Modinomics has done precisely that! Again, that India’s 2nd lunar exploration mission, Chandrayaan-2, would be commissioned in 2019, is not the big story. The big story is certainly the fact that India’s second mission to the Moon, to be launched by GSLV Mark III, is an indigenous mission, including a Lunar Orbiter, Lander and Rover, all developed within India, under the aegis of the Narendra Modi government, giving a whole new meaning to the concept of Make in India. As if that was not good enough, work is progressing at a rapid pace on Gaganyaan, India’s first manned mission into space, to be commissioned in 2021-2022, which would make India only the 3rd country in the world after the USA, Russia and China to do so. More importantly, of the three people who will venture into space as part of Gaganyaan, one will be a woman.
This should be also be a wake-up call to those pseudo-liberals and fake feminazis who lose no opportunity to castigate the Modi government for not doing enough for women. It would be apt to conclude by saying that Modinomics, in true Antyodaya style, has sought to bring development to the doorstep of the last person standing, to help him or her aspire for the impossible, and as they say, impossible is nothing, especially when you have a leader like Narendra Modi at the helm. It would suffice to conclude by saying that India does not need a “Katputli” or a “family retainer”, owing allegiance to dynasts, as its Prime Minister. Modinomics has underpinned the fact that the largest democracy in the world needs a strong leader who can deliver political stability and economic development that is comprehensive and local in its roots but global in its vision. This is extremely important, more so in contemporary times, when rising global protectionism and xenophobia have become the order of the day.
RIP Nehruvian Socialism! RIP Manmohanomics! Hail Modinomics!