BJP president Amit Shah writes about the economic reforms undertaken by the NDA in the past two years to revive the morale of corporate and rural India
On 26 May, the National Democratic Alliance (NDA) under the leadership of Prime Minister Narendra Modi will complete two years in office. It is a proud moment for all of us.
We were elected to power on a pro-poor mandate. Unfortunately, thanks to the fiscal irresponsibility of the United Progressive Alliance (UPA), the Modi government inherited a bankrupt exchequer. This, when the UPA inherited a booming economy with single-digit inflation from the previous NDA government headed by Atal Bihari Vajpayee. They bequeathed exactly the obverse to us.
Consequently, we have had to spend most of the last two years fixing the mess, particularly in creating a rules-based enabling environment to rid corruption and revive the morale of the Indian business community. Alongside, the Modi government has undertaken a series of economic reform initiatives.
—Eliminating discretion in allocation of natural resources, it adopted auctioning to allocate natural resources like coal and telecom spectrum.
—It also reformed the subsidy regime to restrict the payouts only to the most deserving; this has been achieved through the direct benefit transfer, using Aadhaar to identify the beneficiary.
—To facilitate financial inclusion, the government launched the Pradhan Mantri Jan Dhan Yojana.
—Foreign investment rules in various sectors were liberalized.
—Banking sector reforms have been initiated to make public sector banks more competitive.
—To tackle the bad debt problem, the government passed a new legislation on the bankruptcy code to facilitate time-bound resolution of insolvency.
—In a taxpayer-friendly initiative, our government ended UPA’s tax terrorism and embarked on an ambitious reform agenda to recast and clean up the tax administration
—To tackle corruption, the government has initiated a massive overhaul of processes employing information technology and grievance redressal systems.
—The government gave a big push to cooperative federalism by accepting and implementing the recommendations of 14th Finance Commission (FFC)
The government has many more reform initiatives in the works. Unfortunately, several of them—like the constitutional amendment bill to implement the goods and services tax (GST)—have been derailed due to the politics of obstructionism practiced by the Congress. But we will not be, as PM Modi has often stated, disheartened and will continue to press ahead with our initiatives—especially since the ones already implemented have already begun delivering tangible results.
—There has been an increase in the production of electricity, coal, urea and ethanol.
—Economic growth has begun to revive and this year, the Indian economy is projected to grow at 7.8%, the fastest for any country in the world.
—Retail inflation has been brought down from over 8% to around 5%, enabling the Reserve Bank of India to cut rates and bringing down the EMI (equated monthly instalment) burden of consumers and lower the cost of borrowing for Indian business.
—The government has removed bottlenecks and facilitated restarting of stalled projects; their share has fallen from 8.3% in 2013-14 to 6.9% in 2014-15.
—The government restored fiscal balance, resulting in global rating agencies such as Moody’s recalibrating India’s sovereign rating classification from stable to positive.
—The country’s foreign currency reserves have shown a sharp increase.
—The global competitive index put out by the World Economic Forum shows that in the last financial year India has moved up 16 spots to 55th in the world.
—The government’s plan for financial inclusion has resulted in 218.1 million unbanked people joining the banking network. And I am proud to share that the balance in these accounts is Rs.37,616.58 crore; it shows the big heart of our poor brothers and sisters—it should serve to inspire all of us to contribute to nation building.
—We have revived the moribund roads sector and the country is building 18km of roads a day; our government has effected a sharp increase in investments in railways, even as we are seeing an increase in traffic in our ports as business revives.
—The government is cleaning up the public distribution system to ensure better targeting of social benefits to the people. One good example of this is Pahal, visualized by PM Modi and implemented by petroleum minister Dharmendra Pradhan, wherein the cooking gas subsidy is transferred directly to the consumer; it has eliminated leakages, saving Rs.14,672 crore to the government in 2015-16. The Pahal experience will go long way in weeding out the corruption in benefit delivery to the poor.
—Our government has been able to increase domestic LPG connections; we are now delivering this green fuel to even poor households under the Ujjwala scheme.
—One singular achievement of our government has been its ability to tackle corruption. Till PM Modi assumed the job, India was wedded to the idea of an exception-based regime which only encouraged corruption and crony capitalism and worse, denied merit.
NDA has achieved all of this by creating transparent systems which are slowly transitioning the country to a transparent, rules-based regime. The best example is the idea of coal and spectrum auctions proposed by PM Modi. The discretionary allocation of coal blocks was the cause of a major scandal during the UPA regime, which required the intervention of the courts. Our government initiated coal auctions, leading to the elimination of government discretion and also resulting in substantial gains to the national exchequer.
Similarly, the Modi government has refocused public policy to the hitherto ignored rural India. This year’s budget was mostly focused on addressing their problems, which have been worsened by two back-to-back droughts. Besides stepping up spending for this sector, our government has also undertaken a structural overhaul of Indian agriculture—bringing in a crop insurance scheme which would protect our farmers against any unanticipated risks—with the intent of substantially improving the income of our farmers; it will also stimulate rural demand, which in turn should benefit Indian industry.
At the same time, the Modi government has worked hard to create an enabling environment to revive business and encourage entrepreneurship. The Make in India campaign is encouraging foreign companies to invest in India, creating more opportunity for Indian business to grow.
Considering the limited employment opportunity in government, NDA has worked to encourage entrepreneurship among the middle- and lower-income classes. This has been achieved by extending loans under Mudra. Similarly, the NDA has focused on public policy for the encouragement of women and Dalit entrepreneurs under the Stand Up India initiative.
When the Modi government took charge two years ago, it inherited empty coffers, limiting its ability to generate resources to fund the pro-poor programmes we are committed to. Not surprisingly, it focused on mending the economy and in reviving economic growth to generate the desired resources to fund social programmes. The driving ideology of the Modi government has been one of “pro poor and pro business”.
Unlike the previous government, we don’t pay lip service to our commitment to the economically disenfranchised in our great country. From the beginning we have walked the talk and delivered, despite attempts by our political opponents, led by Congress, to distract us. The verdict in the just-concluded assembly elections reaffirms the people’s faith in the Modi government and its rejection of the politics of obstructionism pursued by the Congress