Earlier this month, the National Democratic Alliance (NDA) marked the completion of two years in office, with the same planning and precision that it approaches its election campaigns. Specific ministers were dispatched to different cities to participate in discussions on the government’s achievements. Those heading important ministries, such as power, roads, railways and finance, have spewed details of their achievements on social media and were generous with interviews to Indian and foreign media. That the second anniversary coincided with elections in four important states probably meant that the publicity was an indirect campaign tool as well, and given the results, it seems like a smart move too.
I was invited to one such panel discussion on the Modi government’s performance. The questions from the audience and its reactions to the designated minister’s replies made one thing very clear—most people are happy to lap up the hype and the claims, whether or not there is any impact on their own lives even in terms of lower food inflation which is understood by all.
Of course, there are plenty of positives that the NDA can justifiably tout. GDP growth is strong; foreign direct investment is high; and overall inflation is under control. Prime minister Narendra Modi’s personal popularity remains higher than that of any other politician today, even though it may have waned a bit under the burden of massive public expectations of high-speed reform and rapid change. There have been no major corruption scandals in the past two years, although corruption issues are just as bad when it comes to dealing with lower rung officials in most government departments. Many of the problems that the government is grappling with, such as the bad loans of banks ballooning to a massive Rs8 lakh crore, are a legacy of the past and cannot be laid at the NDA’s door. However, the bigger worry is that the government has failed to take advantage of the low oil prices that have shown a steady uptrend in recent weeks. Let’s look at some hits and misses of the past two years.
Among the earliest successes claimed by the government are the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the two insurance schemes. Going by the government’s figures, it is, indeed, a stupendous success with 218.1 million accounts opened and Rs37,616 crore in deposits. The Jandhan accounts come with a Rupay debit card which has a built-in accident insurance of Rs100,000. The government reports that 94.3 million Suraksha Bima Policies and 29.6 million Jeevan Jyoti policies have been sold since the launch of the schemes.
The key to any insurance is the number of claims settled. Here, too, the record is very good, so far, albeit with very low claims. Under the Rs30,000 life cover offered under PMJDY, 2,799 claims were received and 2,425 were settled (with 360 invalid claims), until 13th May this year. The Rupay card has also received 1,080 claims of which 735 were paid, 261 rejected and 84 are under process. The real question here is: How many PMJDY accounts are examples of true inclusion through first-time accounts and how many have used easy KYC norms to park funds in second accounts?
On the flip side, the same public sector banks (PSBs) that have been forced to lead the financial inclusion effort are also leaders when it comes to massive bad loans estimated at a stupendous Rs8 lakh crore rupees. While the Reserve Bank of India’s (RBI’s) loan recognition norms have exposed the extent of behest lending, crony capitalism or lax project appraisal in PSBs, the government seems to have no clear idea of how to set things right. Is the Bank Board Bureau going to provide answers? What we know is that two Gyan Sangams have not shown the way.
There is no change in slow and confused appointment policies, or any attempt to provide more autonomy to senior management along with increased accountability. Meanwhile, protests by trade unions are likely to escalate, since most employees are clueless about what the government has in store for them. The unions squarely blame bad loans on cronyism and political interference and have some justifiable concerns about their future, since the government has yet to articulate its plan or policy with regard to bank mergers, new bank licensing or privatisation. All of this is already overdue.
There is a general consensus that three infrastructure ministries are doing excellent work: power, railways and roads. Of these, the power ministry, under Piyush Goyal, has been on a fast track, in line with the prime minister’s announcement on 15 August 2015 that all un-electrified villages (18,452 villages have been identified) would be electrified within 1,000 days. According to a Reuters report, the PM is pushing for the target to be met before the Union Budget of 2017. In effect, the PM hopes that this will pay dividends in the crucial assembly elections for Uttar Pradesh. Like the PMJDY, there is a dashboard that is constantly updating progress at http://garv.gov.in/dashboard with details of the officials who can be contacted for work to be done.
Without going into details about road, rail and infrastructure projects, one can only say that grand announcements and project outlays running into thousands of crores of rupees must only be evaluated in terms of actual implementation, because many key projects are stuck for over 50 years and mired in controversy.
A big damp squib of the NDA is the Black Money Bill that has only ended up giving draconian powers to the income-tax (I-T) department. This has been partly offset by reworking the double taxation treaty with Mauritius with plans to extend this to other tax havens, to plug treaty shopping designed to avoid taxes. The long over due Insolvency and Bankruptcy Bills touted as another big achievement of the NDA. However, as Debashis Basu wrote in Business Standard, the plans for a large regulator like SEBI (Securities & Exchange Board of India) and cadre of certified insolvency professionals could turn it into another unwieldy bureaucracy that defeats the intent of the legislation itself.
The past two years have been about huge schemes with catchy names, launched at mega events in a blitz of publicity. Some have worked, others have flopped and the jury is still out on a few. These include Skill India, Start Up India, Make in India, Digital India, Mudra and Swachh Bharat and improving the ease of doing business. There is apparently a lot happening with all these initiatives, but we have still to see tangible results in terms of higher employment numbers and greater investment. Indeed, we need to worry about the inevitable slowdown in e-commerce and logistics, which has been a big employer of unskilled youth, who have led the consumption of mobile phones, motorcycles and other consumer goods, usually purchased on equated-monthly-instalments. We see no concern, as yet, on the implications of this slowdown.
A granular assessment of every ministry of the Modi government shows that it has done a lot more than any previous government; but much of the good work is marred by three problems. First, there is excessive hype, slogans and announcements. Without an engagement with key stakeholders, or a clear plan and vision, such hype raises questions about the targets claimed to be have been achieved. Second, reliance on the same bureaucracy to deliver different results seems to be tripping up the government too often. This is evident in the handling of tax issues, whether at the corporate level (Vodafone) or individuals. Thirdly, the slogan of “minimum government, maximum governance” which gladdened our hearts in the run up to May 2014, still seems a distant dream.
Loans by thousands of no, lakhs of crores taken by the august NPAs are written off generously by the dynamic governor of the RBI. How did the banks get so much money? Of course it is from the wretches the fixed depositors. If those wretches stop depositing, the generosity, no, the economy will come to an end. But there is no need to worry. Can anyone expect the milch cow to refuse to give milk? One can happily milk it and also kick it.
The rate of interest on the fixed deposits can be reduced, without any fear of the wretches. That interest which is less than the rate of inflation can be added to the taxable income, bloating it and thus over taxing the other incomes like salaries, pensions etc.Inflation not only means the reduction in the value of money, it automatically reduces the capital value if the fixed deposit also. In fact thanks to the sky rocketing of the price of land, relationally the capital value of the fixed deposits is becoming nil. The fixed deposits make the banks function and as a result allow the economy to live.
Now the income tax department has given an advertisement, giving opportunity to the tax evaders to disclose their real income and also pay a penalty of 45 per cent of the evaded tax. Very good indeed. But will it not be fair to also calculate the income tax already paid all these years on the fake income, called the interest on fixed deposits and refund it to the fixed depositors? The excess tax paid as a result of including the fake income to the taxable income, is also entitled to an increase of 45 per cent.
The NPAs are walking free without paying lakhs of crores to the banks. But those responsible for the survival of the banks are not getting anything. In fact the gross injustice of including the fake income into the taxable income is to be continued!!!!!!
Let us organize bhajan and Pooja to save the fixed depositors, the meekest among the meekest. I think the so called evaded tax includes the tax evaded on the fake income also. After all what can the cows do when you happily kick them?
YM
Taken for Granted!!!!!!!!
Loans by thousands of no, lakhs of crores taken by the august NPAs are written off generously by the dynamic governor of the RBI. How did the banks get so much money? Of course it is from the wretches the fixed depositors. If those wretches stop depositing, the generosity, no, the economy will come to an end. But there is no need to worry. Can anyone expect the milch cow to refuse to give milk? One can happily milk it and also kick it.
The rate of interest on the fixed deposits can be reduced, without any fear of the wretches. That interest which is less than the rate of inflation can be added to the taxable income, bloating it and thus over taxing the other incomes like salaries, pensions etc.Inflation not only means the reduction in the value of money, it automatically reduces the capital value if the fixed deposit also. In fact thanks to the sky rocketing of the price of land, relationally the capital value of the fixed deposits is becoming nil. The fixed deposits make the banks function and as a result allow the economy to live.
Now the income tax department has given an advertisement, giving opportunity to the tax evaders to disclose their real income and also pay a penalty of 45 per cent of the evaded tax. Very good indeed. But will it not be fair to also calculate the income tax already paid all these years on the fake income, called the interest on fixed deposits and refund it to the fixed depositors? The excess tax paid as a result of including the fake income to the taxable income, is also entitled to an increase of 45 per cent.
The NPAs are walking free without paying lakhs of crores to the banks. But those responsible for the survival of the banks are not getting anything. In fact the gross injustice of including the fake income into the taxable income is to be continued!!!!!!
Let us organize bhajan and Pooja to save the fixed depositors, the meekest among the meekest. I think the so called evaded tax includes the tax evaded on the fake income also. After all what can the cows do when you happily kick them?
YM
I would like to talk about pathetic justice delivery system that is moving at a snail speed in our country. Despite BJP made tall promises to do judicial reforms for a time bound faster justice delivery system, they have not done anything in last two years. At a conference held in New Delhi in April, 2016, inaugurated by Modi, Chief Justice TS. Thakur took on the government over the failure to come up with judicial reforms and made an emotive appeal to the government to have more judges to ensure justice for all. Sadanand Gowda, Union minister for law and justice has no time to engage in talk with the concerned citizens and ngos working in this field.
I would also like to share concerns expressed by eminent lawyer Sri Ram Jethmalani who in a recent interviews with India Legal, an independent legal news magazine has stated The Government Doesnt Want To Spend Money On The Judiciary. Discussion is on need of fund for creating additional infrastructure while in quick reaction, Minister of Law and Justice, Sadananda Gowda responded via Tweet: We don't agree. Close to Rs. 2000 cr per annum is spent on Judiciary by Centre and State Governments. Remember, while the discussion is on need of infrastructure fund, Minister talks of recurring expenses that is spent to run the existing set up. Modi Govt. has all the money in the world for showering monetary concessions to the corporate but has not even 7000 crores required for putting the justice delivery system on track despite 3.71 crore cases pending in the courts of the country,
I conclude with what Ram Jethmalani in the said interview also stated I am ashamed that I helped Modi become the prime minister. I am ashamed that Modi made Amit Shah the BJP president. I am ashamed that I supported Modi during his election campaign. We have everything but we have neutralized everything with the wrong people being in power. We had great hopes on Modi. But he did not turn out to be a shining star as we thought. The BJP is as corrupt as the Congress.
(Almost nil progress on this Public Grievance system with State Governments, though, which is symptomatic of how we shall progress in India eventually - local issues will need local solutions.)
I am surprised you did not highlight the groundbreaking change Suresh Prabhu is implementing.
Another "hype" Make In India - Did you know that a large portion of mobile phone manufacturing has already shifted to India? A lot more is coming via defence etc? Hype indeed?
For fructification there has to be truth.
Good Marketing gimmicks poor Media presentations/excellent manipulations makes look good eg BJP seats in 5 states =64 Congress = 115.
But only tom tomming Assam & garluous Arnab colours facts differently.
Modi as leader felt Land Bill shall pass assuming Governments are totally honest but truth was different.Grand Misreading.
Second GST poor floor management more foreign management sees Modi in arrogance light.
Third Maan ki Baat on TV & Twitter handles well used so that one sided doctored communications happen.After becoming PM how many TV interviews/Janta Chai Pe Charcha's have happened? ZERO.
Om Shanti Om Mahesh
Coal mines put on auction is due to the Supreme Court order despite Modi Govt tried in vain to take notification route.
Despite favourable oil prices, rupee instead of being stronger is more weak than before.
Tension on international borders has increased. Bringing Black money or even Lalit Modi remains ZUMLA.
Badly needed Judicial Reforms are not even in Man kind Baat nor any concrete steps are in sight. Few more issues also needs discussion.
Coal mines put on auction is due to the Supreme Court order despite Modi Govt tried in vain to take notification route.
Despite favourable oil prices, rupee instead of being stronger is more weak than before.
Tension on international borders has increased. Bringing Black money or even Lalit Modi remains ZUMLA.
Badly needed Judicial Reforms are not even in Man kind Baat nor any concrete steps are in sight. Few more issues also needs discussion.