Modinomics Comes Closer

Modinomics Comes Closer

Narendra Modi is being keenly followed for his economic vision. Recently, in various fora, including traders, captains of industry and chartered accountants, he gave both the target audiences and the voting public a glimpse sometimes, a little more elaborate preview at others. While more detailed specifics will be spelled out in the BJP manifesto and in the Vision 2020 document to be released shortly. And, of course, in his ongoing speeches, and those of other NDA leaders, over the next 60 days. Modi made it clear however that he had a strong and inclusive development agenda.

He  also brought the old Mahatma Gandhi/Tata idea of ‘Trusteeship’ out of the closet for another turn in the sun, implying Government’s that claim to be doing the public a favour, are in effect being less than truthful. This, because they are essentially taking initiatives with the public’s money, while pretending to be bountiful.

The other macro point, undeniable in its authenticity, is NaMo’s assertion that as a Chief Minister of long standing, coming out to the national arena, he knows precisely where the shoe pinches for the State satraps. 

He has promised to empower the States and strengthen federalism. He is also showing a great responsiveness to economic suggestions from various quarters, be they that of the trader organisations, the chambers of commerce, think-tanks, intellectuals, captains of industry, media mavens etc. Modi has promised to simplify the thicket of complex laws that affect the businessman to promote ease of working and quickened inclusive growth.

And he asserted continuously that he would do everything not tackled in 60 years of Congress/UPA rule, give or take, in the 60 months of the next Government’s tenure. He expects India at 75, in round figures if somewhat beyond the next 60 months, to be renewed afresh into a ‘new country’. Modi’s is an exciting, bold and transformational message, and implies that the gradualism and incrementalisation of approach followed by the UPA with limited success, will be sharply overhauled to promote rapid growth and progress for all sections. Perhaps now, at last, India   will be set on the path of realising its true potential.

Modi says he wants to see GST implemented and sees it as a great unifier pan-India, but points out you cannot do so till the IT connectivities are put in place. He says the UPA has been lethargic over it, rather than the States, but then what’s new? He wants, most of all probably, to ramp up infrastructure spends as possibly the key growth driver.

HDFC’s Deepak Parekh, who seems to be on the same page, pointed out at a function under the auspices of the India Foundation, that infrastructure spending had been derailed over the last two years, and needed urgent attention from the new Government. Of the over $1 trillion projected in the 12th Plan period, 47% was meant to come from the private sector, but this  has certainly not been forthcoming, with two years of the plan period already elapsed. Parekh suggested corporatisation of the Railways, ramping up urban infrastructure, developing brand new cities and injection of massive FDI. We know China and Japan are waiting in the wings to bring in a lot of investment, and there are probably others, like Saudi Arabia and Iran, waiting to make their declarations soon. Notice our potential that our investors do not have to belong to the same camp. This is a lesson that should not be lost on the US and NATO and may be a philosophical gift from our idealistic non-alignment days. So Russia and the US are welcome, along with Germany and France and Australia too. 

Narendra Modi, as always, positioned himself as an ardent Reformist and an efficient administrator, emphasising that Governance was very important. This brings cheer and not a little wonder to all in an age of policy paralysis where all hopes have been long belied. With just a couple of months to go till the elections, and possibly a substantial economic renaissance.

Modi says we have almost fallen out of the BRICS  wall, Humpty-Dumpty like, and need to get back into the reckoning. Who can deny that this is true? But it is a practical streak amongst all the lofty intent that is the most reassuring about Modinomics. Modi wants to bring about 24x7 electricity around the country, including the little villages, and strong Internet connectivity. On the back of this intent, he exhorted small traders to develop virtual malls and not be afraid of technology or the big traders either.

Columnist Andy Mukherjee, writing in Business Standard, says he expects Modi to revive ‘credit growth’.  He joins commentator and free-marketeer Gurcharan Das and Siddharth Birla of FICCI in desiring more detail on Modinomics in the coming days.  Still, almost all observers and analysts expect optimism to return, and business and industry, rooting heavily for Modi, to start borrowing for modernisation and expansion again.

The dependence on populist coalition partners might queer the pitch a little, some reckon, but the stock markets and property markets are expected to revive. The numbers are anywhere upwards of 10 to 30%, according to the international rating agencies watching India, with more than the usual interest at this time.

 (869 words)

28^th February 2014

Gautam Mukherjee