A good year

Narendra Modi administration has introduced a new paradigm of governance

The NDA’s first year in office has been a game-changer. A new paradigm of governance where growth and welfare go hand in hand has been introduced — investment aimed at double-digit growth is being planned in tandem with pro-poor initiatives. Transparency and probity, as evidenced by the coal and telecom auctions and the initiatives against black money, are the order of the day. The results are already visible, with the economy growing at 7.3 per cent in 2014-15. This, after inheriting a low growth rate due to 10 years of scams, indecisive governance, global recession, etc.

Acting on the premise that infrastructure-creation drives economic growth, the NDA has focused on this sector. A Rs 70,000 crore increase in infrastructure investment in 2015-16, over the last financial year, is on the cards. Five new power projects of 4,000 megawatts (MW) each, in plug-and-play mode, have been announced. Public investments in irrigation and rural infrastructure have been prioritised and government policy has been tailored to attract both public- and private-sector investment in infrastructure.

A transparent approach to natural resources was vital, given that the biggest scams during the UPA years had to do with coal and spectrum allocation. The NDA thus opted for e-auctions. Revenue of more than Rs 2 lakh crore for coal-bearing states has been generated through this process (during the UPA regime, the states only received royalty from coal mining). The telecom spectrum auction fetched more than Rs 1 lakh crore.

Centre-state relations and India’s global image have improved drastically. The prime minister has repeatedly emphasised the importance of Team India for progress. To help states focus on their development plans and strengthen the federal structure, the NDA swiftly implemented the 14th Finance Commission’s recommendation to increase the states’ share of total federal tax revenues from 32 to 42 per cent.

The government and the BJP stand firm on curbing the growth of black money, a major handicap in resource-generation for the empowerment of the poor. Not only does it drain capital but also compromises international relations. The PM has been successful in evolving a consensus among world leaders on the black money issue. Indeed, the NDA’s first cabinet decision was the constitution of an SIT to investigate black money. Two important pieces of legislation, the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill and Benami Transactions (Prohibition) Bill, were enacted to curb the generation of black money.

In terms of legislation, the past year has been fruitful thanks to the BJP’s clear majority in the Lower House. The 2015 budget session was the most productive of the last 15 years. Lok Sabha productivity — the number of actual working hours as a percentage of the total scheduled hours — was 123 per cent. The Upper House was slightly behind, with productivity of 101 per cent.

Financial inclusion of the poor has been an immediate priority. Accordingly, three social security schemes providing insurance cover and pension have been launched. Dovetailed with the Jan Dhan Yojana, they are a decisive step towards institutionalised financial inclusion, rather than dole.

The launch of the Mudra Bank was another significant step towards the financial empowerment of citizens. India boasts some 5.7 crore small enterprises, which account for 90 per cent of the non-agricultural workforce and 40 per cent of the non-agricultural GDP. The majority, around 62 per cent, of these are run by individuals from SC, ST or OBC communities. Cut off from the banking system post-Independence, they have now been given access to minimal interest loans of Rs 50,000 to Rs 10 lakh. Interestingly, these small enterprises contributed to India’s global economic dominance before the Industrial Revolution. Strengthening the traditional small-is-beautiful model could well help realise the dream of turning India into a global manufacturing hub.

Addressing the skills gap, which has thus far hampered efforts to take advantage of the demographic dividend and generate largescale employment, the NDA has created a special ministry for skilling 500 million youth by 2020. Nearly 1.5 crore youth enter the job market every year, but only a tiny fraction receive formal vocational training, as compared to 60-96 per cent in industrialised countries.

India enjoys a huge demographic advantage with a billion people under 45 — in contrast to the increasing dependency ratio in the West. By 2020, the average Indian will be 29 years old, compared to 37 for China and 48 for Japan. Instinctively realising that a decisive leader is needed to make the most of this opportunity, the electorate has placed its faith in Narendra Modi. Judging from the first year, he has used that mandate to forge ahead with an innovative, even revolutionary, paradigm of equitable growth.