Dr Manmohan Singh is one of the nicest individuals in Indian political space. Rudeness and his intellectual reputation just do not go hand in hand. The Indian business circle also holds him in similar regard. But being pragmatic ones, they do not refrain from bringing ugly side of the niceness in the Economist. These voices are getting louder now.
Murthy criticises Manmohan regime
Narayana Murthy, Infosys founder, has called out the UPA2 regime for stalling economic growth in India. He lamented the fact that the slowdown occured at the time when an Economist was sitting at the helm of affairs. Murthy recalled his experience of sitting on the board of HSBC bank. He said that during the initial years of UPA rule, India and China used to enjoy comparable reputations. According to him, at the time when he left the board, China had leapt way ahead of India. In Murthy’s analysis, it happened due to delays by the Manmohan Singh government.
Quote, “But unfortunately, I don’t know what happened afterwards. During Manmohan Singh’s government, who is an extraordinary individual, for whom I have tremendous respect, somehow India stalled. Decisions were not taken quickly, everything was delayed. And by the time I left (HSBC), if China’s name was mentioned 30 times, India’s name was hardly found to be mentioned once.” Murthy said these words despite crediting Manmohan Singh for 1991 reforms.
“He was nice but he could not get the work done.” Have you heard of this statement before? Yes, many times. Right from your school to your workplace, you know one such character. Former Indian Captain Rahul Dravid was also criticised for this very aspect of his personality during his playing days. He later mended his ways and became one of the best Coaches in domestic cricket circles. Unfortunately, Manmohan Singh is not going to have such an opportunity to resurrect himself.
PM Vajpayee’s emphasis on long term investment
When Manmohan Singh was handed over the responsibility of Prime Ministership by Sonia Gandhi, he had a solid base to build upon. PM Vajpayee had left a never-ending imprint on the polity of India. He had focussed on strengthening long term prospects of India in both national as well as international affairs.
While Saurva Ganguly was setting base for 2011 world cup win, Shri Vajpayee was setting the base for India’s dominance in the Asian century. PM Vajpayee understood that India would have demographic advantage within 2 decades. That is why he focussed on empowering the future of the nation. By launching the Sarva Shiksha Abhiyan in 2001, he aimed to educate every child between 6 to 14 years of age. The long-term thinking was that these children would become a part of the workforce a decade down the line.
It was due to Vajpayee Ji’s emphasis on making education a fundamental right that Manmohan Singh government was able to achieve “near universal education” at the primary school level.
Road connectivity to villages
One of the many factors influencing the accessibility of education in rural India is that of road network. Under the Pradhan Mantri Gram Sadak Yojana (PMGSY), PM Vajpayee aimed to provide good, all-weather road connectivity to unconnected villages. PM Vajpayee was the only who could think of not burdening the states with financing the roads. This is why PMGSY is a Centrally Sponsored Scheme.
When Manmohan Singh came to power, he rightfully recognised that the initiative was too noble to ditch for political brownie points. Not only that, Singh also enhanced its budgetary allocations. Other road connectivity projects like Golden Quadrilateral which connects four metros, Kolkata, Chennai, Delhi and Mumbai were also left untampered by the Manmohan administration.
Singh built on the foundation
Despite so much spending on the Central government’s part, the Vajpaee government managed to not let the government accounts go haywire. It was done by privatising irrelevant government companies like VSNL, BALCO and Indian Petrochemicals Corporation Limited. The Vajpayee government was so confident about its fiscal discipline that the Prime Minister introduced the Fiscal Responsibility Act to bring down fiscal deficit
Manmohan Singh did not tinker with any of these policies. He in fact strengthened a lot of them. It was only on the back of the ground work done by Vajpayee government that the UPA1 was able to enjoy healthy economic growth, with its highest growth rate being 8.06 per cent.
UPA2 – A disaster
India’s burgeoning economy during UPA1 brought superpowers on its side as well. Manmohan Singh’s political acumen was much credited for the India-US nuclear deal. But things only went south from there. UPA2 was one of the worst nightmares ever faced by Indians in their realisation as politically independent individuals. It was so bad that only emergency era government of Indira Gandhi could topple it in terms of poor performance index.
But when you look at it from the developmental aspect, the government which imposed the emergency had one positive aspect about it. If it wanted it could impose pro-industry policies and very few would have spoken against it. This aspect was missing from the UPA2 government. They faced the problem lying on the other end of the spectrum. They just could not implement their policies. Neither the industry nor the common people trusted them.
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Scams – Roadblocker
And why would they? It was a badly formed coalition facing roadblocks at each and every step. A policy paralysis had sent negative sentiments to every section of the population eager towards development. Scams after scams had dented investors’ confidence towards investing in India. Scams such as 2G, AgustaWestland helicopter, Scorpene submarine, Commonwealth Games, and Coal scams kept the government machinery busy in building a political firewall for the party.
In many of these scams, chief accused were those closely connected with power corridors in Delhi. One of them was a minister named A Raja. He was arrested for his hand in a $25 billion 2G scam. The unearthing of the scam ended up in cancellation of 122 licences awarded to different companies. The scam ended up undoing most of the gains made by Shri Atal Bihari’s initiative of New Telecom Policy.
Also read: Rs 1,70,000,0000000: PM Modi saved an amount equivalent to what India under UPA lost in 2G scam
Harakiri all around
Ministers had lost the trust of the masses and industrial bodies were not sure who was in charge. It won’t be wrong to say that during the UPA2 era, the media and Courts were more trusted than the elected government. Coalition compulsions leading to not so strict political actions on the guilty politicians further dented that meagre amount of confidence.
The problem was exacerbated by the after effects of the Global Financial Crisis in 2008. The profligate spending had ensured that the fiscal deficit was not in a healthy state, leading to decline in sentiments about India’s economic prospects. The trust factor between state and private sector was down the abyss. Confusion prevailed over the government’s policies around basic factors of economic growth like land, infrastructure, mining and power.
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Businesses needed political will
Delayed approvals led to stalling of projects. This further dented investor’s confidence leading to a vicious cycle of policy paralysis. In that circumstance, only political maturity could have saved the UPA2 government. But it seemed as if the Manmohan government had given up on any hope of political and economic revival. They did not even try to take the opposition on board for issues such as FDI in multi brand retail, introduction of new tax regime and many others.
No wonder businesses started to pull their support from the regime. They had seen that a weak man is not the answer. A person who could take everyone on board was needed. Additionally, this person was required to have a proven record of not delaying developmental projects due to political compulsions.
Also read: UPA government was hell bent on selling the entire Delhi to Wakf Board
PM Modi was the answer
PM Modi having more than 1 decade of experience as pro-developmental Chief Minister was the answer. Industrialists had seen how he dealt with anti-development elements in the state. People like Ratan Tata were beneficiaries of PM Modi’s quick decision making ability way back in 2008.
Soon, the advertisement spread through word of mouth and other than a few industrialists who could only sustain by hobnobbing with power circles, most big industrialists lent their support to PM Modi.
When PM Modi became Pradhan Sevak, they were not disappointed at all. Why would they? Look at their main concerns and how PM Modi solved it.
Policy paralysis sorted
Their biggest concern was that of policy paralysis. PM Modi launched a slew of initiatives to eliminate the problem. In his Cabinet, he kept work horses like Arun Jaitley, Piyush Goyal, and Manohar Parrikar, who ensured the speedy implementations of the idea. To change the sentiments in the banking industry, IBC was launched. Through this, banks slowly but steadily became free to lend more money.
Increased consumer spending
Their second biggest problem was the relative lack of willingness on the part of consumers to spend money. PM Modi identified the root of the problem. People did not save money because they did not have means to save.
Through financial inclusion programs such as Jan Dhan Yojana, people got more leeway to save, and spend when time required. To ensure that the poorest of the bunch save their money, they are being provided with two times more food through grain distribution schemes.
MSME sector on rise
The third problem was that of feeder services to big industries. When big factories were installed at a remote setting, they had to spend a lot on ensuring the supply of spare parts and other minute components. Only an efficient MSME sector could solve this problem.
Through emphasis on infrastructure spending and ease of doing business, the Modi government made it easier to start a business. Government sponsored loan schemes are there in case the executioner of the idea faces any fund crisis.
Brain drain reduction
The fourth and possibly the biggest problem for Indian industries was that of brain drain. The problem has been reduced to a certain extent by emphasis on Aatmanirbhar Bharat, make-in-India, Stand up India and Start up India. Today, engineers and managers earning handsome money in foreign countries are returning to contribute towards the nation’s growth. Accessibility of Specific corridors reserved in different geographies have a big role to play in it.
Though there is still a long way to go, it’s definitely a strong start. This is why various big boys of industry have time and again restated their support to PM Modi’s vision. These include Ratan Tata, Anand Mahindra and Narayana Murthy himself.
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