Unfinished business: The PM’s confidence in the economy needs to be backed by firm implementation

| Updated on August 15, 2019 Published on August 15, 2019

Modi’s Independence Day speech, in a typically nationalist vein, fuses the citizen’s duties to the nation with those of the government’s

Virtually shrugging aside palpable signs of economic gloom, it was a remarkably sanguine Prime Minister who addressed the nation for the sixth consecutive year from the ramparts of Red Fort. Buoyed by a strong mandate, Narendra Modi underscored his government’s essential style — of being resolute in taking big ticket steps, such as criminalising triple talaq, abrogating Article 370 and Article 35A of the Constitution with respect to Jammu and Kashmir and implementing income transfers to farmers. His optimism is aimed at the aspirational Indian, arguably his core supporter; as he says, “ordinary people always dream of a good system. They like good things; they have developed a taste for it.” Modi’s speech reaches out to these sensibilities, as his politics always has. Combining astute nationalist politics and economics, he exhorts Indians to explore tourist spots in their country rather than destinations overseas. As an innovative step, he stresses on promoting exports at the district level, based on each region’s acumen. The Swadeshi theme is unmistakable, even as he reiterates his ‘respect for wealth creators’. He said: “Let us decide whatever is produced and available in our country should be our priority.”

On the economy, he notably harks back to a somewhat forgotten promise of ‘minimum government, maximum governance’ in these times of tax overreach, while quite convincingly reiterating his government’s resolve to break into the first 50 ranks in the World Bank’s ‘ease of doing business’ ranking. In fact, he extends the entire idea to ‘ease of living’ for the common man, by having abolished “practically one redundant law every day” over the last five years. This is no mean achievement for a country whose entrepreneurs have been hobbled by reams of red tape. By way of reassuring private investors, miffed by Budget proposals, the Prime Minister has promised ‘predictable laws, stability and market access’ in a recent media interview. He has stuck to the confident tone of the Budget, saying that becoming a $5-trillion economy by 2024 “must be the dream of every Indian”. To this end, he has planned a ₹100-lakh crore infrastructure programme by way of railway stations, buses and airports. But a roadmap is not really evident.

Indeed, there were few specifics on offer for an economy that is rapidly losing momentum and jobs. The GST and the bankruptcy code are laudable reform initiatives, but the former has ironically mired Indian businesses in a new set of procedures. The bankruptcy code is nowhere near being a fast-track mechanism to release locked-up capital. While the Prime Minister has recently said that banks need not fear a witch-hunt in day-to-day operations, this alone may not carry conviction in the absence of concrete steps. Modi’s speech, in a typically nationalist vein, fuses the citizen’s duties to the nation with those of the government’s. The latter’s goals appear clear in the long-term, but less so in the short-term.

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Published on August 15, 2019
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