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Four years of exemplary governance by the Modi government
The Central Statistics Office portal shows the following information:

India: Real gross domestic product (GDP) growth rate year-wise from 2012 to 2018 is:

5.46%, 6.39%, 7.41%, 8.16%, 7.11%, 6.74% and 7.36% (estimated) in 2012, 2013, 2014, 2015, 2016, 2017, and 2018 respectively.

India: Inflation rate year-wise from 2012 to 2018 (compared to the previous year) is:

10%, 9.4%, 5.8%, 4.9%, 4.5%, 3.6% and 4.96% (estimated) in 2012, 2013, 2014, 2015, 2016, 2017 and 2018 respectively.

India: Fiscal deficit as a proportion of GDP from 2012 to 2017 is:

4.89, 4.62, and 4.13 in 12-13, 13-14 and 14-15/ 3.9, 3.5 and 3.53 in 15-16, 16-17 and 17-18.

It is obvious from above data that financial governance during the Modi regime has resulted in much higher GDP; and much lower inflation and fiscal deficit despite a dip in the middle due to demonetisation, therefore it be may be considered as a regime which has exhibited exemplary governance.

Modi has been on a mission to restore honesty and sincerity in public life and administration, weed out black money and corruption, and speeding up economic development resulting into all-round progress with demonetisation and GST as two major policy reforms.

Post demonetisation, the Union government's drive towards higher compliance has already helped it garner an additional Rs 1.5 lakh crore in direct taxes during 2017-18 and get a record number of new filers. But it is not done yet with the Income Tax department chasing around 65 lakh people who it suspects did not file returns last year as it hopes to expand the taxpayer base to over 9.3 crore. Further, as many as 73,000 companies de-registered by the government deposited Rs 24,000 crore after demonetisation.

GST enabled, inter alia, fewer tax compliances, faster transportation of goods and lending by the banks on the credible cash flow captured in GST books instead of collateral.

On the supposedly "flawed implementation" of GST, let us look at the growth rate numbers from when GST came into effect ie on July 1, 2017.

GDP Q1 (Apr 1 — Jun 30, 2017): 5.7%

GDP Q2 (Jul 1 — Sep 30, 2017): 6.3%

GDP Q3 (Oct 1 — Dec 31, 2017): 7.2%

So, the Indian economy slowed down to 5.7% for the 3 months before GST was to come into effect. If the tax structure is going to change in less than 3 months, any business would slow down and wait. Is there much that the government could have done about that? Then, once the new rules came into effect, people got back to business immediately and we saw a little jump from 5.7% to 6.3%. In the 3 months after that, the economy grew at 7.2% and it rose to 7.7% in the last quarter of the financial year. So, only six months (July to December) saw a slow down and that to when the greatest tax reform since independence was implemented.

In this connection, it may be remembered that inclusion of petro-products in GST has been consistently opposed by the UPA from the year 2011.

Good governance is how public institutions conduct public affairs and manage public resources. Governance is the process of decision-making and the process by which decisions are implemented. Under the Modi government, maximum emphasis and effort have been put on energizing the decision process and making it corruption free and transparent.

The Modi government has today achieved the following milestones:

1. Bringing more ease of living for citizens by keeping inflation in check, waging war on corruption through demonetisation, Direct Benefit Transfer (DBT), rendering government services online, improving ease of doing business for entrepreneurs, and Ujjwala Yojana. All these reduce cost of transaction.

2. Institutional innovation like Niti Aayog.

3. Successful implementation of structural reforms like Jan Dhan Yojana, GST, recapitalization of public sector banks, IBC, deregulation of petrol and diesel prices and enhanced focus on digitisation.

It must also be mentioned that 20 crore new bank accounts were opened with total deposits of more than Rs 700 billion, 53 per cent of which are held by women; Rs 4.28 lakh crore was sanctioned under the entrepreneur loan scheme, MUDRA.

We must also make a note that since Modi took office, over 5.92 crore toilets have been constructed, while 3 lakh villages and 300 districts have been made open-defecation free. India's sanitation coverage under the Swachh Bharat Mission in the last three years has gone up from 38 per cent to an impressive 76 per cent. Similarly, underscoring the importance of people's participation to make the government's efforts successful, at least 20 lakh people have surrendered their gas subsidy. In the railways too, 9.39 lakh senior citizens have voluntarily given up their subsidy under the government's 'give up' scheme.

Comprehensive surveys by NSSO (National Sample Survey Office) and Labour Bureau established that notwithstanding inter-state differences, the average annual rate of growth of job creation at the all-India level, at 3.2% in 2009-2016, exceeded the rate of growth of job seekers, which averaged 2.4%. According to a study authored by SBI Group Chief Economic Advisor Soumya Kanti Ghosh and IIM Bangalore professor Pulak Ghosh, 590,000 jobs had been generated every month until November in the financial year 2017-18. This means that seven million jobs would have been created in the formal sector in 2017-18 if one expands the trend on a pro-rata basis. India's unemployment rate declined to 4.8 per cent in February 2017 compared to 9.5 per cent in August 2016-says India Brand Equity Foundation (IBEF). Unemployment rate in India is expected to be 3.50 per cent by the end of this quarter, according to Trading Economics global macro models. In the long-term, the India Unemployment Rate is projected to trend around 3.60 per cent in 2020, in this econometric model.

As regards IBC and NPAs, despite some roadblocks, over the next few months, there will be a closure — either through a resolution or liquidation in the case of the 12 large firms referred to the National Company Law Tribunals under the IBC, thus promising to ease the pain for Indian lenders by writing back about Rs one lakh crore of NPAs.

Further, The Reserve Bank of India's (RBI) has decided to clean up the balance sheets of Indian banks, which are collectively saddled with Rs five lakh crore of bad loans, by the end of this fiscal. So, the banks have started cracking the whip on Indian companies for repayment of loans, with the result that the biggest ever fire sale of Indian corporate assets has begun, to tide over bad loans crisis.

Coming to agriculture, it is true that it has lost its growth momentum as the average agri-GDP growth rate in first four years of the Modi government (2.4%) is much less than what was experienced during the last four years of the Manmohan Singh-led UPA-II government. But then, the fact remains that it faced drought situation in the first 2 years after assuming office. As per the latest GDP data released by the Central Statistics Organization (CSO), the agriculture sector is reviving and in the last quarter of fiscal year 2017-18, growth in the sector was 4.5 per cent.

The public distribution system (PDS) is being praised to have benefited from the government's digital drive and DBT (Direct Benefit Transfer) mission. Aadhaar-linking of ration cards, regular update of beneficiary list, and use of Point-of-Sale (POS) machines in ration shops is said to have led to deletion of 2.75 crore bogus ration cards (of the 24.3 crore total ration cards), and reduced grain pilferage. Evidently, this should lead to progressively reduced grain off-takes from the central pool, leading to a contained food subsidy bill.

The government has re-emphasised on generating higher income for the farmers by declaring MSP for Kharif crops to be 1.5X of the cost of produce. Apart from raising the minimum support price for all crops, the government proposes raising credit for the agricultural sector to 11 trillion rupees ($172.3 billion). It plans to set up a Rs 20 billion fund to develop, and upgrade, agricultural market infrastructure. Another Rs 5 billion would be allocated to promote farmer producer organizations, agriculture logistics, processing facilities and professional management. It also planned to loosen restrictions on the export of agricultural commodities to realiSe a market potential as high as $100 billion. Recently, the Centre has approved a Rs 8500 crore package to clear the cane farmers' dues from the sugar mills.

On the external front, suffice it to say that India has secured membership of three non-proliferation export control regimes out of four since this government came in 2014. The government has reached out to 186 out of 192 nations through its foreign policies which mostly proved beneficial. For example, Saudi Arabia was persuaded to allow AI's Delhi-Tel Aviv flight overflying Saudi airspace.

(The writer is an author and a commentator.)

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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