Roller coaster ride

It has undoubtedly been an eventful four years in office for the Modi government. Compared to an UPA government that was accused of ‘policy paralysis’, this one has been decisive from the word go, perhaps even to a fault. It has introduced major reforms, some of which have been hit by indifferent execution. As for the successes, auctions were introduced for coal and spectrum sales, as against the arbitrary, non-transparent approach to allocating these resources during the UPA years. India’s ranking in the World Bank’s ease of doing business moved up 30 places to 100 last year (the report was released in November 2017), without taking GST into account. What worked for the country’s ranking in particular was the introduction of the Insolvency and Bankruptcy Code as a step to free up stranded capital. Procedures with respect to starting a business, obtaining construction permits and protecting minority investors were simplified. The introduction of GST last July crunched a plethora of State and Central rates and levies into just a clutch of rates. While GST is not free of implementation issues, all stakeholders stand to gain from a fair, transparent tax system that pulls a larger share of the economy into the formal sector. The Centre has also taken steps to transform the energy and transport space. There has been a perceptible rise in the share of solar power in installed capacity. The move to phase out the manufacture of conventional vehicles by 2040 and shift to electric ones is laudable. While the Centre has been accused of not attending to farm distress, its crop insurance cover and price support to pulses can make a difference over time.

However, at least two of its initiatives were controversial. The demonetisation of 86 per cent of the currency in circulation as on November 2016 put ordinary citizens to hardship, without demonstrably achieving its stated objectives of wiping out black money and bringing about a shift from cash to digital transactions. While bringing more people into the tax net, DeMo hurt small producers. The promotion of JAM — Aadhaar along with Jan Dhan accounts and mobile phones — may have been beneficial in targeting welfare transfers, but the blanket promotion of Aadhaar has raised concerns over both exclusion and data security. Its Digital India push has yet to be dovetailed with health and education outcomes. The Modi government’s moves need to be better thought through. It is yet to show tangible gains in its Make in India plan, even as a flood of cheap imports make jobs scarce. Investment remains stuck at multi-year lows.

Above all, there is a creeping sense of government breathing down the necks of business — contrary to its initial slogan of ‘minimum government, maximum governance’. In the socio-political realm, freedoms and liberties are seen to be under threat. Such misgivings have strengthened over time.

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