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.
[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
