Thursday, February 2, 2023

8 years under Modi

Eight years under prime minister Narendra Modi (2014-2019 and 2022) can be described as eventful in terms of socio-political happenings since 2014 when BJP stormed to power under Modi. In his 2014 campaign, Modi who was then Gujarat chief minister promised reform, growth, job creation, controlling inflation and equitable distribution of wealth, summarised in the slogan “achhe din”. Now eight years is a long time to check if ‘achhe din” or good days are here. In 2017 the Modi government passed the GST law which had been initiated by the previous UPA-II government. However, the opposition pointed to the falling rupee, flight of capital, plummeting GDP and a sharp drop in manufacturing activities are the result of a series of economic policy failures. Further it termed the “ deeply flawed GST” and 1,100 amendments since 2017 which have made the taxation structure cumbersome for medium and small businesses. The Modi government inherited a banking system burdened with huge bad debt. The non-performing assets (NPAs) of banks had risen for a number of reasons – from bad credit decisions to poor monitoring, connivance of bank employees, as well as cyclical business downturns. The government’s Insolvency and Bankruptcy Code (IBC), proved to be a game changer as it took NPAs head-on. To tackle the ghost of black money, the government took a momentous decision at midnight on demonetisation on November 8, 2016 but the decision was taken against the advice of two successive RBI governors, Raghuram Rajan and Urjit Patel. It was done on the wrong premise that a lot of money was black but later when 99.7% of the currency came back to the system it proved there was actually no ‘black money dividend’ – the Rs 3 lakh crore that the government expected. India’s farm crisis has worsened in the Modi years. While the Modi government carried forward decisions on various issues, yet in some, it had to back down due to political expediency such as the three controversial farm laws on which it stuck its neck out but which it had to revoke. However, the bright spot in the Modi government’s record was speeding up of highway construction, the new Bharatmala and Sagarmala projects, the building or revival of regional airports and regional air connectivity, and much work on modernising and expanding railways etc. On disinvestment the total receipts on account of disinvestment stood at Rs 13,561 crore on 31 March 2022, which is Rs 1.61 lakh crore less than the original budgeted target of Rs 1.75 lakh crore. After storming back to power in 2019, the Modi government was more aggressive with pursuing economic decisions. The Make in India’ was launched with much fanfare. However, despite opening up several sectoral caps for FDI and improving ‘ease of doing business’ ranking, manufacturing has not picked up as expected. The opposition, especially the Congress has attacked the Modi government over wholesale inflation, which it claimed was at a 30-year high and food inflation has made the life of the middle class and poor unbearable. The Congress also claimed that unemployment rate is officially touching 8 per cent, and could be much higher. Instead of creating the promised 2 crore new jobs every year, over 12 crore jobs have been lost. Be that as it may, Modi still is the most popular political leader winning 52.5% approval rate across the nation as against only 6.3% for Rahul Gandhi.

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