Stung perhaps by a growing chorus of well-wishers and
detractors alike complaining about the slow pace of Reforms, the Modi Sarkar
has perceptibly quickened its pace.
Fuel subsidies are being radically reworked to benefit only
the bona-fide poor and not all and sundry. This approach is also going to be
applied to many of the Welfare programmes it has inherited from the UPA. The
Finance Minister has highlighted the undesirability of worrying about inflation
alone at the expense of growth. This is
most welcome, because a level of tolerable inflation balanced against high-growth is going to give the best results. A recent
report says an investment of $1 trillion may be required to ramp up the Modi
vision of urban renewal, infrastructure enhancement and a 100 new smart cities.
This thrust alone, if put to implementation, will take the GDP back up to 7 to
8 per cent per annum.
The SEZs, a more or less failed idea so far, are being woken
up from their slumber. And their allergy to impediments such as the applicable
dividend distribution tax etc. which has put off investors, are on their way to
being repealed. When sorted out, it will serve the cause of manufacturing,
employment and boosting exports.
Narendra Modi also
keeps reiterating his promise to provide 24x7 electricity to every part of the
country, and he said so once again at the inauguration of a new transmission link, the Raichur-Solapur 765
kV second circuit line, in Maharashtra.
There is, of course, a tremendous amount to be done to
upgrade and enhance the ageing and creaky generation, transmission and
distribution apparatus, neglected and fallen behind demand by a vast margin.
But even in his recent visits to Bhutan and Nepal, power generation was very
much on Prime Minister Modi’s cooperative development agenda.
This makes it a commitment rather than pleasant political
rhetoric, because repeated mentions of universal electricity availability suggests
that Modi and his Government is willing
to be held accountable for its promises made in this regard.
Likewise, at the launch of the indigenously built warship INS Kolkata, Modi underlined his commitment,
yet again, to much greater defence production within the country. That this
also holds enormous invest potential alongside its spin-offs of strategic
advantage, state-of-the-art technology
absorbtion, employment, and possible exports ,is downright exciting.
An interesting and unfolding story is the exclusive use of
state-owned DD for all of the prime minister’s public and broadcast
communication. DD has, for the Independence Day speech from Red Fort, unveiled
its new and enhanced digital broadcast capabilities for flawless and modern
coverage. But lurking behind this patronage from the top, is the implied effort
to convert the state-owned entity into a popular media powerhouse, with
professionals, content, production values and profitability to rival any of the
private and international satellite TV media organisations.
The new BJP President
Amit Shah has, on his part, swiftly overhauled his team, underlining his
authority, dropping the less than dynamic . The new office bearers are mostly
under 50 years of age, and chosen for their tested ability to deliver winning
elections.
The BJP will also shortly build itself a fine and
purpose-built party headquarters in the heart of New Delhi, giving over from
its Lutyen’s Bungalow perch on Ashoka Road. This signals its vastly enhanced
stature as a national political party of consequence, certainly for now, but
equally so for the foreseeable future. The Independence Day announcement of a Think Tank in place of the erstwhile centrist Planning Commission, tasked to push greater autonomy and authority to the States of the Indian Union is another bold change. It was followed, a day later, by Prime Minister Modi’s desire to see the States taking a greater hand in promoting manufacturing and exports.
Of course, nor everyone thinks what the Modi Government has done
in three months is too little, including Swiss brokerage UBS, content to see
the Nifty at 8,000 by December 2014 and listing the Government’s announcements
with regard to Insurance, Defence production, REITS, Labour Law reform etc.. But
the vast majority fully expect an ambitious level of performance from this
Government, taking its pro-business, pro-growth stance for granted.
Narendra Modi is going to Japan at the end of this month,
and the visit is expected to yield substantial economic results in terms of
nuclear power cooperation and manufacturing in the Delhi-Mumbai Industrial
Corridor (DMIC). This while a Chinese delegation is on its way to India to
kick-start two SEZs incorporating sizeable Chinese investment, currently at a
paltry $1.1 billion, invested in Gujarat.
Meanwhile, India’s trade with China has grown to nearly $ 70
billion per annum, with a trade surplus of some $40 billion in China’s favour.
China is well used to running such unequal trades with most countries, but is
open to the idea of manufacturing in an India run by Narendra Modi. India wants to make inroads into the Chinese
market in IT and other areas, and this is likely to be agreed after President
Xi’s forthcoming visit in September.
The Koreans are also keen to participate, as are the French,
the Israelis, the Americans and others. Every nation worth its salt wants to
trade with a country of 1.2 billion souls. But friend and foe of this
Government, both want to see implementation to match Modi’s flamboyant
promises.
Narendra Modi, the canny politician, is well aware of
this, and is clearly confident of demonstrating his Government’s mettle in the
weeks and months to come.
(911 words)
August 17th,
2014Gautam Mukherjee
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