Big hits of Modi Sarkar (2014-2019)
If one were to look back at the positive achievements in the last five years, there have been economic and political steps in the right direction.
- One big hit for the current government will surely be the speedy implementation of the Insolvency and Bankruptcy Code. At least, the process of cleaning up the balance sheets of banks has started. More importantly, it has put a sense of fear into promoters that they cannot just borrow and take the lenders for granted.
- Implementation of GST without being inflationary was an achievement that is not given its due. In most other countries that implemented GST, it has been inflationary in the first 2-3 years. The GST Council has managed the rates in such a way as to temper the inflation impact all through. Even collections are improving.
- Congress may have ushered in UIDAI and Aadhar, but it is to the credit of the Modi government that it combined the power of Jan Dhan and Aadhar to create a combination of reaching benefits, reducing spillage, eliminating the middle man and creating an audit trail of transactions in rural and semi urban areas.
- Demonetization may have had its own pitfalls and critics but it achieved two very important purposes. It pushed India towards digital money and it eliminated the idle liquidity under your pillow. With a surfeit of liquidity, banks had no choice but to transmit rate cuts to the borrower.
But, there have been some misses too!
It would be a little too flattering to say that there have been no misses. Here are some of the things where the government could have done better.
- Lack of jobs creation may be one of the major challenges for the Modi government. The CMIE has pegged unemployment at a record 7.5% in India. While that figure may have become a bone of contention, the fact is that there has been tremendous loss of jobs in the last five years. While some of it was purely due to technology and the process of creative destruction, there has been an impact on jobs due to demonetization and the rollout of GST.
- Continued farm distress will go down as another miss by the current government. The Modi government had promised doubling of farm incomes by 2022 but despite fixing MSP at 150% of cost, farmers continue to sell below breakeven levels and rural incomes and demand are on a downturn. The trickle-down strategy has just not worked.
- Implementation of progressive ideas like “Make in India” and “Ease of Doing Business” was another major hitch. Two brilliant ideas remained largely on paper due to paucity of talent and a will to implement these ideas. At the end of 5 years, the government has little to show by way of increased exports or in-sourcing.