Tuesday, 30 June 2015

First Anniversary of the Modi Government: Must meet the expectations of voters (Part B)

Dr. Devendra Kothari
Population and Development Analyst
Forum for Population Action
The immediate focus of the Modi Government must be two pronged – focus on human development and tone up the basic infrastructure aiming at improving the quality of life and productivity, thus, creating favorable conditions for the sustainable development.

Narendra Modi’s electoral victory was greeted enthusiastically by corporate as well as by the common people, but a year on, the euphoria seems to have largely worn off. The problem, as columnist Ruchir Sharma points out, is with the sky-high expectations that greeted the new man in New Delhi. The popular opinion now seems to be that he did not push the pedal hard enough, as he could easily have.[1] Indeed, the Delhi assembly election can be read in part as a confirmation of an electoral mandate for delivery on pragmatic economic and governance issues. [2]  This should be one takeaway from the Delhi election. And this post aims in this direction.  

Modi came in power on the basis of development agenda. In last one year, he has pushed an aggressive model of development with buzzwords like ‘Make in India’, ‘Jan Dhan Yojana’, ‘Swatch Bharat’,  ‘Smart Cities’, ‘Digital India’, etc. But they are seen as too incremental to satisfy hopes he has generated during the poll by raising slogan like Achhe din anne wale hain (English: Good days are coming). Any reasonable government can deliver incremental reforms and piecemeal growth. But when voters gave Modi the first majority government in 30 years they expected – and deserve – much more. It is because India’s voters especially youth are no longer impressed with such rhetoric. Indian youth today are neither deficient in motivation nor in aspiration. Influenced by global trends they demand better government services which help them to grow and participate in the national building. It is widely argued that gives them an enabling environment coupled with contributing infrastructure, and sees how they leverage their own potential. As such, it is critical for the Modi Government to focus on real issues.

There are four issues that need urgent attention. First, slogan ‘minimum government, maximum governance’, advanced by PM Modi,  is an expression of good intent , but administration yet to decide on the kind of government it wants to be. It is reasonable to assume minimum government refers to the need to limit the size of government. Maximum governance, while more difficult to fathom, could signal a focus on governance and accountability. For decades, we have had extraordinarily large governments while ironically the quality of governance has been quite poor. That may be the reason why an average urban household in the country pays around   Rs. 4,400 annually as bribe, while rural households have to shell out Rs. 2,900, a government commissioned study has revealed.[3]  Further, in the cities, an average of nearly Rs 18,000 was paid for securing jobs and transfers, while payments to traffic police personnel were at around Rs 600 a year. The report has also brought to light how on an average people running roadside vends and eateries pay approximately Rs 1,100 per month. According to the report, 91% of the respondents admitted to have paid bribe. This study confirms that bribes and corruption has become a very acceptable thing and all political leadership and bureaucrats enjoy this extra income as black money but common men suffer.  As such, the Modi government must provide corruption free governance to make life easy especially for poor and downtrodden.  There is a need to limit the government to providing high quality yet affordable public goods of health, education, infrastructure and law and order.

Second, India’s state capacity is today inadequate for an economy which is almost $2 trillion in size, with 10 million young people entering the workforce each year.  We need higher growth rates to create more employment for our huge population. Information provided by the Central Statistical office (CSO) show India’s Gross Domestic Product (GDP) – the total value of goods and services produced in the country (that is economy) -  grew 7.3 per cent in 2014-15 against 6.9 per cent in 2013-14.  Now question arises whether India will continue with this trend in coming years? Economists are more guarded.  There are concerns about the weak demand in the economy. "So, driving up demand remains the biggest challenge in the economy," said DK Joshi, chief economist at CRISIL. For this, PM Modi needs to implement fiscal reforms including tax reforms for faster demand generation.  The tax systems disproportionately burden the poor. Over 900 million people still live in poverty, as per the World Bank’s international  poverty line; India cannot relax efforts to provide more opportunities for its poor. India is a tax haven for the rich as they do not have to pay any tax on their dividend income. But the middle-class citizen has tax deducted at source even on the paltry interest received from savings bank accounts. In the last budget, the government increased the service tax from 12.36% to 14%. Let us hope that PM Modi provides the much-needed relief to the people of this country by enacting necessary modifications to the both direct and indirect tax laws.

Third, the fight against poverty in India cannot be waged through an improved investment climate alone. Growth will be more pro-poor if poor people have a higher level of human capital and an opportunity to shape the decisions that affect their lives.  For this, India has much ground to cover in catching up with other Asian countries in education and related indicators.[4] China, Indonesia and Sri Lanka all have higher literacy rates. Furthermore, literacy is an aggregate indicator, and behind the aggregates is great inequality in access to and quality of public education.  One is saddened to see the widening quality gap between India’s and the world’s secondary and tertiary educational standards. Despite historically strong intellectual traditions and growing Indian economic power, not one Indian university could make it to the top 100 in world reputation rankings recently released by Times Higher Education. In elementary education too, that only 48% of class V children can read a Class II-level text is an indictment of Indian education. In a country with the world’s largest proportion of young people, PM Modi has long talked about the demographic dividend but if large sections of these Indians remain functionally uneducated and unskilled, this demographic dividend can soon turn into a demographic disaster. At a time when the Modi government is focusing on a manufacturing push to the economy with its ‘Make in India’ slogan, the drag in education is a major constraint. As such, it is time to shift mind-sets, liberalise education and encourage institutional autonomy and creativity to keep pace with a rapidly changing world. It is a problem that needs immediate attention to unlock the Indian people’s potential. [5]

Lastly, another important slogan advanced by Prime Minister Narendra Modi suggests the path his government should follow: ‘sabka saath sabka vikas’ ('Together with all, Development for all'). The flip side of the coin is that after the Modi's landslide electoral victory in 2014, there was a notable upsurge in public rhetoric by some supporters of Hindu nationalism. This includes speaking out against love jihad, efforts to rewrite school textbooks, introducing Surya Namaskar in schools, and ghar wapsi campaign aimed at religious reconversions to Hinduism. Recently, several BJP ruled States have banned the consumption of beef and are said to be considering dropping eggs from school children’s midday meals — driven by fundamentalist agendas — even as sundry BJP ministers threaten to send those who disagree with them to Pakistan.

We should agree with Walter Andersen & Allison Berland of John Hopkins University that   “while Hindu nationalist issues remain politically salient for a portion of the electorate and are a component of the BJP's electoral base, two decades of economic growth have created a growing aspirational electorate that is largely focused on the pragmatic issues of development, good governance, and jobs”.  [6] Therefore, there has been a growing feeling that unless the PM Modi speaks out, in the long run the communal surround sound would undermine his agenda for the economy. He must draw a clear lakshman rekha between his own vision of India and of those who wish to drag the country back towards religious bigotry and social disharmony. There is an urgent to be more inclusive for the sake of economic development and political stability of the country.

In sum, Singapore literally travelled from third world to first world over the 30 years when Lee Kuan Yew was prime minister, demonstrating that Asian societies can do this if they are pragmatic about addressing challenges. Modi is said to be an admirer of Lee.  He should learn from the latter’s legacy and pursue systemic reforms which unlock the Indian people’s potential to ensure sustainable ‘acche din’. This will also ensure that Modi is elected for a second term in 2019.

[1] For details see: Ruchir Sharma’s article:  Which giant will Modi follow now? at http://timesofindia.indiatimes.com/india/Which-giant-will-Modi-follow-now/articleshow/47323110.cms

[2] Delhi election verdict was a protest voting against Modi’s policies. For details see: Devendra Kothari’s post: Delhi election verdict: Is it a wake up call for Modi? At http://kotharionindia.blogspot.in/2015/02/delhi-election-verdict-is-it-wake-up.html

 [3] For the full report, logon to www.timesofindia.com.

[4] For details see: Devendra Kothari’s post: Growth with structural transformation: An agenda for India at http://kotharionindia.blogspot.in/2015/01/growth-with-structural-transformation.html

[5] Kothari, Devendra. 2014. Education in India needs intensive care, not a quick fix, RAEA Policy Paper No. 1. Rajasthan Adult Education Association, Jaipur. 

[6] For details, read: Walter Andersen & Allison Berland’s  Parivar gets a Modified lesson in pragmatism at http://timesofindia.indiatimes.com/home/sunday-times/all-that-matters/Parivar-gets-a-Modified-lesson-in-pragmatism/articleshow/46489682.cms.

No comments:

Post a Comment