We are fortunate to be at a juncture when India is indeed a bright spot in the global economy. There is today unprecedented confidence and conviction in India's economy. The improvement last year in India's ranking on the World Bank's 'Ease of Doing Business Report' to 130 along with a healthy pickup in FDI inflows to an all-time high is a validation of this positive beginning.
I congratulate Hon'ble Prime Minister Shri Narendra Modi and the government on the completion of two successful years which were characterized by transformational steps to improve governance, ease of doing business and bringing in key structural and banking reforms.
The transition from a state of "crisis of confidence" in 2013 to becoming a "bright spot" (to use the IMF's words) in 2016 is not by chance but by design. The past few months in particular, have seen even renewed energy from the government to enforce key reforms, and revive industrial sentiment.
The transition from a state of "crisis of confidence" in 2013 to becoming a "bright spot" (to use the IMF's words) in 2016 is not by chance but by design.
Some argue that India's growth may be due to a natural progression of the previous government's efforts, with little effect of Modiji's policies, but I beg to differ. There is a certain renewed confidence and vigour in the economy as it forges ahead to become part of the global supply chain under the 'Make in India' tag, which is fast becoming a symbol of pride for the manufacturing sector.
A lot of ground has been covered with respect to ease of doing business, FDI liberalization, financial inclusion, revival of sectors such as roads and renewable energy, cooperative and competitive federalism and subsidy reforms. In addition, there have been some landmark measures such as the Insolvency and Bankruptcy code and the Uday Scheme for restructuring of state discoms.
At the same time, there have been some obvious disappointments such as sluggish pace of disinvestments and the less than desired traction in manufacturing and labour laws. While the government has done well to delegate the responsibility of reforming the labour laws and land allocation to the states, a decisive action by the Centre through a consultative process on these two contentious subjects remains desirable. Moreover, the government's inability to get past the unyielding opposition in the passage of the critical GST legislation remains one of the biggest dampeners.
There have been some obvious disappointments such as sluggish pace of disinvestments and the less than desired traction in manufacturing and labour laws.
However, along with a vibrant and sustained economic growth trajectory come various externalities, discontents and opportunities missed. Two years is a short time in the political world but it is a long time in the quarter-to-quarter horizons of the corporate sector. Policies and national missions do take time to materialize on the ground as they require the restructuring of government institutions, reorganization of the bureaucracy and garnering the support of the opposition to pass various Bills in Parliament. Beyond these more prosaic and run-of-the-mill reasons for delayed policy effects, the Modi government has had to develop the "New India" narrative in a rapidly changing global economy that is challenged by a multitude of socio-economic and environmental crises.
An emerging narrative has taken hold, and is discussed around dinner tables, trade negotiations, academia and policy circles -- the economy does not exist in a silo, independent from social inequities, pollution, climate change and ecological degradation. Thomas Pickety's book, Capital in the Twenty-First Century, has become a definitive critique, not to mention an international bestseller, pointing an unwavering finger towards neo-liberal capitalism as a driver of worsening income inequality. When close to 50% of Indians don't have a bank account, Pickety's thesis becomes even more relevant. Rapid urbanization is a global reality, particularly so in India, starving the rural economy of skilled labour, fuelling an unsustainable growth in urban densities and pressuring natural ecosystems.
[Certain] debates have tended to dominate the media and steered attention away from the larger balanced economic growth ambition of the Modi government.
It is with a "balanced growth" lens of ensuring "sustainable economic development" that I prefer to look at Modi's two years in office. Many of the Prime Minister's schemes and missions have collectively set the right tone from a balanced growth perspective, including, among others, the 175 GW solar mission, the Swachh Bharat Campaign, the GiveItUp LPG Scheme, Jan-Dhan, Aadhaar, Mobile (JAM) trinity, farmer insurance, Make In India, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Digital India, Smart Cities Mission (SCM), Heritage City Development and Augmentation Yojana (HRIDAY) and the Pradhan Mantri Awas Yojana (PMAY). The development of roads, ports, airports and other infrastructure, which are critical to power traditional economic growth, have also received significant boosts.
However, all great plans must be executed, which requires a fully functioning Parliament that can pass highly important bills such as the GST and an equitable Land Acquisition Bill. Parliamentary stalemates are sometimes fuelled by certain difficult currents in the national discourse, such as the recent debate over the curtailment of dissent. These debates have tended to dominate the media and steered attention away from the larger balanced economic growth ambition of the Modi government.
To achieve all the above objectives and to leapfrog various institutional boundaries, the Prime Minister's Digital India campaign needs to be urgently accelerated. A connected India will be an informed India, a financially included India and most importantly, an empowered India.
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