The Coming Of The Red Carpet

 

The Coming Of The Red Carpet

 Prime Minister Narendra Modi’s highly  successful visit  to America is now being crowned with indications that $ 41 billion in FDI may come in from that country over the next three years. And that this is only some 20% of the expected inflows from the US over a longer term.

The focus therefore, after similar pledges clocked up from Japan and China, must shift to the implementation of a ‘red carpet, not red tape’ regime at the earliest. The stagnant nuclear power cooperation with the US is  also poised to move forward.

The India development juggernaut can get off to an excellent start, with nearly $100 billion slated to come in from all three countries by 2017. The first part of Modi’s strategy, of drumming up investment interest from abroad, is now  definitely looking impressive.
While the world, encouraged by the policy initiatives already taken, the uptick of over a percentage point in GDP, is willing to give the Modi Government some more time to set the stage, there is much work to be done.  

Freer Labour Laws, expeditious land acquisition, provision of utilities, reduction of taxation, connectivity, automation, efficient processing of proposals/permissions, are just some of the things that must change. Only this will see the massive foreign and domestic investment flows towards turning India into a dynamic manufacturing hub.

But the first signs of real and substantive big-ticket  reform  needs to be seen in the coming 90 days. Without setting such a scorching pace, otherwise second nature to the prime minister in matters economic and administrative, this surge of international goodwill is in danger of being wasted.

The concern that Modi won’t deliver on his promises for any reason is probably misplaced, as the Government is set to deregulate diesel, for example, soon after the model code of conduct, in place for the Maharashtra and Haryana elections, lapses later this month. This will save thousands of crores in subsidies going forward, even as a lower fuel import bill calms inflation and aids the burgeoning current account/fiscal deficits.

Analysts have begun to say that the Modi Government has already laid a basis for GDP growth to surge towards 7-8 % in the coming years, up from the near 6% projected for this fiscal.

And more and more observers are allowing that the Modi dispensation is likely to endure for two terms in office, or till 2024. This implies the BJP Government will be able to substantially implement Modi’s vision for India.  And since this vision is so wide-ranging, the nation, and its place in the world, could well be very much changed, for the better, in the coming years.

But concerns  about the quality of governance the Modi Government will be able to deliver, given the massive bureaucratic and political inertia and corruption of the decade past, still remain. It is not that the Modi Government is expected to slide, but the ‘system’ itself, used to a less responsive style, may throw up its own voluntary and involuntary resistances.

Yet, most people view Narendra Modi as a determined and transformative figure, not afraid of doing things differently and taking a risk over it. And his track record as Chief Minister of Gujarat certainly inspires confidence. This is not a politician who does not know how to exercise power and  deliver administrative efficiency.

Meanwhile, the Union Council of Ministers is also likely to be added to shortly. It will probably induct at least one  young and well-qualified ‘economy’ resource,  namely Jayant Sinha, son of veteran BJP leader Yashwant Sinha, a retired IAS man and former Finance Minister himself.

While the Congress  harps on this Government’s attitude towards the minorities, the number of Bohra businessmen who turned up at Madison Square Garden in New York, as well as the Muslims and Christian tribals of Gujarat who vote for Modi, paint a very different and reassuring picture. The devastated Opposition also routinely questions Modi’s ability to implement his plans, and suggests he is promising much more than he can deliver.

Narendra Modi is aware of all the skepticism. He points out however that the NDA Government  has already done more in its  four and a half months in power, than the UPA accomplished in 10 years. 

It will strengthen Modi’s arm significantly if the State Assembly elections on the 15^th of October find in favour of the BJP, rather than return a ‘hung’ verdict in the multi-cornered contest, as the opinion polls seem to be suggesting.

This, more so, because Modi finds himself, once again, as the chief campaigner for his party in both states. If the BJP does well, and actually wins, it will be seen, once again, as his personal victory. It will eliminate the blot of the lost byelections, and increase The BJP’s legislative strength in parliament.

  (798 words)

October 5^th, 2014
Gautam Mukherjee