Its a long article but
written and edited as objectively as possible. In case of any mistake, please
do point out. But please spend time reading it in full.
Narendra Modi would be
completing four years as the Prime Minister of India on 25 May 2018. The
ascendance of Bharatiya Janata Party-led National Democratic Government (NDA)
to power is of significance for the Indian politics because of two reasons -
i. The NDA II
Government came into power at a juncture where India needed a Decisive
Leadership that was free of Corruption, Policy Paralysis and coalition
compulsions.
ii. High
Expectations from the Single Party-ruling. It was for the first time in the
last three decades that a single party could garner majority seats in the Lok
Sabha. Previously, Rajiv Gandhi won 404 seats in the 1984 elections that were
conducted in the aftermath of the assassination of Indira Gandhi.
Against this backdrop,
it is pertinent to examine the key Initiatives, Achievements and Challenges
before the Modi Government in the economic sector.
When the BJP
government came to power in May 2014, reviving the staggering economy was high
on the agenda. The major focus was on improving ease of doing business,
augmenting foreign investments into the country and simplification of rules and
procedures.
Most important
initiatives in this sector were -
Budgetary reforms: Reforms in the fiscal policy were
crucial for achieving and sustaining high growth rates. Towards this end, three
major changes were initiated to the Budget Cycle starting from the FY 2017-18.
The three changes were –
i. Merger
of Railway Budget with General Budget
ii. Advancement
of date of presentation of General Budget by one month to 1 February
iii. Discarding
Plan and Non-Plan expenditure classification
These changes were
brought in to improve the efficiency, economy and effectiveness of the Indian
Railways by shielding it from populist demands and making funds available to
schemes and programmes at the beginning of the financial year i.e. 1 April.
Ease of Doing
Business: From the
beginning, the government was of the view that improving ease of doing business
conditions was crucial for attracting investments, (especially in the
form of FDI and FII), which
alone facilitates transfer of technology and best management practices from the
developed countries.
Towards this end,
initiatives like Goods and Service Tax (GST), scrapping of the
Foreign Investment Promotion Board (FIPB) and e-filing of Income Tax Returns
(ITRs) were undertaken.
Black Money: Beginning with the formation of a Special
Investigation Team (SIT) on black money (under Justice MB Shah) in its first
Cabinet meeting, the government has taken a number of steps to curb the menace
of black money. Some of the important steps are –
• DEMONETISATION; On
the evening of 8 November 2016, Prime Minister announced that Rs.1000 and 500
notes would cease to be legal tender. This measure was
primarily aimed at curbing illegal and unaccounted money.
• The
Undisclosed Foreign Income and Assets (Imposition of Tax) Act, 2015 was
introduced to penalize the concealment of foreign income by replacing the
Income Tax (IT) Act, 1961.
• Benami
Transactions (Prohibition) Amended Act, 2016 was brought in to provide
effective regime for prohibition of Benami transactions by replacing the Benami
Transactions (Prohibition) Act, 1988.
• Prevention
of Money-laundering Act, 2002 was amended in 2015 to plug the
loopholes in the parent Act.
• Foreign
Exchange Management Act (FEMA), 1999 was amended through Finance Act, 2015 to
provide for seizure and confiscation of value equivalent, situated in India, in
case any person is found to have acquired any foreign exchange or immovable
property abroad through illegal means.
• A
new Income Disclosure Scheme is formulated for domestic black money.
• Economic
infrastructure: High quality economic infrastructure like roads, ports
and electricity play a key role in leveraging the potential of an economy. To
augment the economic infrastructure the following steps were
undertaken.
• Smart
Cities Mission was launched in June 2015 to improve urban
infrastructure with an outlay of Rs 48000 crore by 2020.
• Atal
Mission for Rejuvenation and Urban Development (AMRUT) Yojana was
launched in June 2015 to develop infrastructure in 500 towns and
cities with an outlay of Rs 50000 crore by 2020.
• Shyama
Prasad Mukherjee National Urban Mission was launched in February 2016
to develop smart villages on the line of smart cities
and reduce the burden of migration to the cities through
adopting ‘cluster approach’.
• SetuBharatam Project
was launched to make national highways free of railway crossing with
an outlay of Rs 10200 crore by 2019.
• The
Sagaramala Programme was launched with a view to achieve the broad
objective ofpromoting port-led economic development with an outlay
of Rs 70,000 crore.
• Independent
India’s first comprehensive policy on civil aviation - National Civil
Aviation Policy – was unveiled in June 2016. The
Objective of the policy is to create an eco-system to make flying affordable
for the masses.
Achievements in Economy: Compared to growth rates of 4.5% and 4.7% in
FY 2012-13 and FY 2013-14 respectively, the growth rates in FY 2014-15 and
2015-16 were 7.3% and 7.6% respectively.
The achievements of
the government as given in the Economic Survey 2016-17 are –
• The rate
of inflation was in the declining path and was pegged between 4% and
5%.
• The Current
Account Deficit (CAD) of the Balance of Payments (BOP) is less
than 1 per cent of Gross Domestic Product (GDP) along with the
dollar-rupee exchange rates convincingly stable.
• India is receiving one of the largest inflows of
foreign direct investment (FDI) due to FDI reform measures were
taken in the last couple of years. As the proportion of GDP, the FDI
inflows have grown from 1.7 per cent in 2015-16 to 3.2 per cent in the Second
Quarter of 2016-17.
• India's share
in the world manufacturing exports is rising because the country has
remained competitive despite high capital inflows and inflation.
• Considering all the strengths, the Indian
economy has the potential to grow at 8 to 10 per cent of GDP in
real terms over the medium to long run. This makes the real returns on
investments in India most attractive among all comparable and competing
countries at present.
Challenges before Indian Economy: The following issues have to be addressed by the Modi
Government in the short to medium turn in order to achieve inclusive growth.
• Raising
income inequalities: In a report titled ‘An Economy for the 99 per
cent’, the Oxfam pointed out rising income inequalities in India in recent
years. As per the report released in January 2017, India's richest one per cent
now hold a huge 58 per cent of the country's total wealth, which is higher than
the global figure of about 50 per cent. This situation was alarming, and
government should initiate proactive measures to bring down income disparities.
• Unemployment: As
per the Labour Bureau figures, the rate of unemployment grew steadily from 3.8%
in 2011-12 to 5% in 2015-16. Moreover, India added just 1.35 lakh jobs in eight
labour-intensive sectors in 2015, compared to the 9.3 lakh jobs that were
created in 2011. To remedy the situation, the government has to announce
measures to encourage labour intensive and small-scale industries.
• Non-Performing
Assets: Despite various measures announced by the Reserve Bank of India
(RBI), the issue of Non-Performing Assets (NPAs) is still plaguing the economy.
The Union Ministry of Finance and the RBI should initiate more co-ordinated
measures with the banks to minimize the problem of NPAs.
CONCLUSION
As per the World Economic
Outlook 2017 of the International Monetary Fund (IMF), India remains one of the
fastest growing emerging markets in the world. However, as per the
economists, the increasing overall prosperity is not reaching the disadvantaged
sections of the society. Hence, it is high time the Modi Government must
initiate pro-active measures to achieve much faster, sustained and inclusive
economic growth.
10 biggest achievements of the
central BJP government under the leadership of Narendra Modi.
Strengthened economy: While being the chief minister of Gujarat, Narendra
Modi had proven himself to be a great supporter of economic moment.
Strong economy has been on the top of Narendra Modi achievements.
Under his leadership, Gujarat became
one of the most prosperous states in the country and he signed deals with a lot
of foreign companies and governments. Narendra Modi has been successful in
replicating the same on a bigger level. His foreign tours have brought
in a lot of investment with Japan investing in first bullet train in the
country. Though the world shows slower progress, the Indian economy has been
progressing with over 7% rate, making it one of the most positive signs for the
future.
Improved International
relations: Foreign policy has been among
the top modi achievements.
Narendra Modi has often been criticized by the opposition for so
many foreign tours. However, none of us can ignore the fact that his
travels have made a lot of friends for the country. Be it about those warm hugs
with Barak Obama or attending Ganga Aarti with Japan PM, Narendra Modi has made
friends with the biggest diplomats of the world. It is because of his
dynamic leadership that UAE spoke openly against Pakistan sponsored terrorism. India
has extended financial help to countries like Bangladesh, Nepal and Afghanistan
and that has resulted in increased regional influence.
Also, launching the South
Asian satellite will come a long way in India’s plans to become next Asian superpower.
Change in attitude on
critical issues: Under the leadership of
previous prime ministers, India was considered to be a defensive country with
its focus on maintaining peace. Narendra Modi has shown a more
aggressive way to deal with sensitive issues. Incidents like surgical
strikes in Pak occupied Kashmir and destroying Pakistan bases give us a glimpse
of it. Also, the government has come face-to-face with the Chinese government
on various issues involving Arunachal Pradesh and Dalai Lama.
Without caring for reactions, India
has extended open support to Israel and both the countries are working
together on a lot of deals involving defence and technology. Another such
incident came at the time of recently concluded Doklam Standoff, where India
showed its resistance and refused to give up against the Chinese
pressure. This strengthened India’s international image and
proved that India has now started to take its stand and the world and countries
around India should be well prepared to involve India in any such issue from
the next time.
Increased Internal
Security: Though tension of border still
persists and there are continuous ceasefire violations by Pakistan, resulting
in regular casualties of the soldiers and internal threats like Maoists, India
has come a long way in securing the internal parts from jihadi terrorists. Over
the last few years, there has been a big crackdown on the number of terrorists
caught by the security forces and a lot of plans have been derailed. Communal
violence has come down to a significant level and finally, the country can look
forward to focus on mainstream issues
Make in India &
Digital India: Narendra
Modi government has taken a lot of initiatives to directly impact the common
people. Make in India was announced to make sure that MNCs start their plans in
the country, resulting in generating employment and contributing to the
economy.
Make in India has gathered a great
momentum and many countries have signed deals with respective state governments
and the central government to boost FDI and employment.
Also, initiatives like
Digital India has paved a way for future and brought millions of
citizens in the mainstream economy. Also, the promotion of e-ways, which
promises broadband connectivity in all villages by 2020, will prove to be a
great catalyst in the success in future.
A government with a clean
Image: In India, politics is often considered as synonym of
corruption. Though the previous government came under huge criticism for
scandals like CWG, Coalgate and 2G spectrum, the present government has not
faced any such corruption charges and the politicians have worked with
commitment and that is one big Modi achievement.
Prime Minister Modi has
led his team with an example by not taking a single day leave in his tenure. Also, initiatives like ban of beacons have
strengthened the connection between common citizens and the government.
Ministers like Sushma Swaraj and Suresh Prabhu are
often seen directly communicating to people on Twitter and answering their
queries, Narendra Modi too holds regular Man ki Baat program to talk on
general issues.
Swachh Bharat: When this initiative was announced, a lot of people
had laughed over the fact that the government was giving so much of importance
to such a small issue. However, in the last two and a half years, this
moment has picked up momentum and bigger cities have started realising the
importance of cleanliness. Railway Stations and public places are now way
cleaner than the past, and the general public has been involved to make it a
mass moment where everyone is aware of their duties.
GST: Goods
and Services Tax, termed as the biggest tax revolution since independence has
been put in place from July 1st. The government has made sure that the new
reform does not cost adverse to the people by keeping sensible tax brackets.
Before GST, the government had decreased the rate of income tax in the lowest
slab from 10% to 5%, impacting a lot of middle-class people.
Special focus on rural
India: Pradhan Mantri UjwalaYojna has been one of the most appreciated schemes by the
current government. The way central government involved the normal
people by asking them to give up their subsidies to help the rural women with
access to clean energy, has been widely appreciated. Also, schemes
like Krishi SinchaiYojna, Pradhan Mantri
AwaasYojna and Sukanya SamridhiYojna have been directly focused
for the rural population to increase their standard of life.
Niti Aayog: Ever since India got independence, a lot of planning
and execution was done on the central level by Planning Commission. Modi
government scrapped the planning commission and introduced Niti Aayog,
which promises equal power to the states on
matters of planning. Also, the government has scrapped five-year
plans from 2017 and will now have 3-year plans and 15-year plans, with
clear agendas and objectives. Niti Aayog calls for supporting
entrepreneurs and MSMEs to boost the employment in all sections. Niti Aayog works as a corporate entity with a CEO and
answerable representatives.
Tough stance on critical
issues: With this government in power, the politics of appeasement seems to be
getting over. After the initiative taken by the central government, Supreme
Court declared Triple Talaq unconstitutional and asked the
government to bring a law within 6 months. The decision has attracted mixed
reviews, with Muslim women coming out in open support of the government as well
as opposition once again trying to oppose the government. However, one thing
has been proven that these decisions need guts and the current government has
enough and more of it.
Narendra Modi’s biggest
achievement is advancing democratic model in India when it is retreating
globally
Modi remains the only mass leader in
India with a vision, and a willingness to implement that vision to transform an
enormous and complex nation. It was also evident that Modi is willing to stay
the course despite deep transitory costs and consequent threats to his
political capital.
This is important, because
democracy is in a global retreat and India — with its huge population, firm
commitment to democracy and the tag of being the world’s fastest-growing large
economy — remains perhaps the last beacon of hope. India needs to succeed while
staying within the democratic framework to show to the rest of the world that
it is possible to achieve equitable growth without sacrificing freedom.
In Modi, India has found a leader
willing to take risks. Ratings
show that almost Four years into his tenure, the prime minister still remained
overwhelmingly popular. Pew Research says nearly nine-in-ten Indians hold a favourable opinion of him. But
it goes deeper than that. Modi has retained his popularity despite putting his
entire political capital at stake while triggering some transformative and
utterly disruptive changes.
These reformative steps, as World Bank has pointed out in its latest
report on India while projecting a 7.3 per cent growth in 2018, may unlock
India’s “enormous growth potential”. It said: “So far we have seen ambitious
policy initiatives and implementation like GST. And we have all the reasons to
expect this government to continue economic policies to create friendly
environment for businesses and push its growth potential up.”
In his interview, Modi pointed out
that GST and demonetisation weren’t the only reforms he had undertaken, though
these were the most talked-about.
"If you consider only
these two things (GST and demonetisation) as my government's work, it will be a
big injustice to me...” He
also “listed bringing unbanked people into the banking network,
construction of toilets in over four lakh schools, cooking gas connections to
three crore families, electrification of left-out villages, ramping up of urea
supply, low-cost insurance for poor, LED bulbs to save power bills and
environment as the other areas his government has focused on, " according
to a PTI report quoted by The Times of India.
The most
disappointing aspect about India’s politics has been the fact that even as Modi
has gone about implementing his vision with conviction and even stubbornness,
the Opposition has failed to provide either a critique or an alternative. It
has focused on the transitory costs, hoping to profit from the unrest arising
out of the behavioural changes that Modi’ steps have forced on the polity.
Even more
disappointing is the fact that young leaders, who have sprung from social
movements, have been too willing to slip into the throes of anarchy. Instead of
providing an alternative vision or a more inclusive model, they have threatened
to pull back India into the vortex of caste politics.
Modi has a daunting
task in taking India ahead while mitigating the social and economic
disparities. However, it is quite evident, not just because he presents his
case forcefully during the interview, that he is the only leader willing to
even try to do so.
In last three years,
the present Government restored the credibility of the Indian Economy and the
Government, introduced market mechanism-based decision making process, and
eliminated the Government discretions among others.
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