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India: Well begun is half done

From investment to Social Sector reform, Modi’s government has transformed the country’s political landscape after two years in power

THE National Democratic Alliance (NDA) gov- ernment, led by prime minister Narendra Mo- di, has completed its two years in office.


It is normal for any government which enters the middle of its tenure to consolidate its road map for the future. For the Modi government, the first two years have been like the slog overs [to use a cricketing term]

The government was formed in a peculiar environment. The (previous coalition govern- ment, the United Progressive Alliance) UPA had abandoned policy formulation. It was dubbed as an era of ‘policy paralysis’. Both global and do- mestic investors had started disregarding India. India was off their radar. The credibility of gov- ernance was marred with scams and scandals. The Prime Minister’s office (PMo) was no long- er the repository of the last word.

The 2014 election verdict was aspirational. The decisive majority in the Lok Sabha (lower house of parliament) made decision-making easier for the new government. The prime min- ister, by instinct, is decisive, so the character of governance has changed.

Prime minister Modi and his team have pre- sented India with a changed political and gov- ernance culture. That India can have a clean government at the centre where files move on their own, middlemen are unemployed, discre- tions are eliminated, is a reality being presented before the country today. From ‘policy paralysis’, India has transformed into the fastest-growing global economy for two years in a row.

Federalism has been respected as never before. The prime minister, with his hands-on ap- proach, has given India a government that projects itself as different from its predecessor. India needed investment – it is the starting point of all economic activity. Both the banks and the private sector had overstretched them- selves during the UPA government. Thus, a bulk of investment in the past two years came by way of enhanced public expenditure and Foreign direct Investment (FdI).

The emphasis of the investment has been In- dia’s infrastructure, rural sector and social sec- tor. The highways sector is booming all over again. The expenditure this year on India’s rural roads will be three times what it was earlier. Twenty-five more regional airports will be added. The railways are being strengthened. With the re-development of 400 major railways stations, the face of Indian railways will be changed.

There is more power available than India needs. The port capacity is being strengthened with ad- ditional investments. Game-changing initiatives in the oil and gas sector have been undertaken. electrification of all un-electrified villages, ex- pansion of rural roads, rural sanitation, housing for all, enhanced expenditure on irrigation, more money for the rural employment Guaran- tee Scheme, more money for interest subvention to make cheaper capital available for the farmer, are all instrumentalities of funding rural India.

The social sector schemes have been path- breaking. The Pradhan Mantri Jan dhan Yojana is the largest-ever financial inclusion scheme in the world. every Indian today has the facility of being connected to a bank account. Subsidies are being rationalised so as they are targeted only to the poor and needy.

The direct Benefit Transfer is saving a lot of money so that it can be preserved for the more deserving. The cheap insurance schemes, the employment generating Mudra Yojana, land- mark crop insurance schemes and the proposed health insurance for the weaker sections of soci- ety are a part of the larger social security pack- age that the government has rolled out.

For the first time in India’s history, coal and mineral spectrums are available only through online auctions. The mining sector today has been opened up for investment. The non-dis- criminatory system of allotment is in sharp contrast to the scam culture of the past.

Taxation in India was perceived as extra ag- gressive. Today, 94 per cent of assessees file their returns online, all taxpayers get their refunds digitally and only one per cent have to physi- cally interact with the department for their as- sessments. The direct taxes are being rational- ised so as to incentivise manufacturing and in- crease investment.

The GST [Goods and Services Tax], once im- plemented, will prove to be one of the biggest tax reforms since independence. It will allow a nationwide transfer of goods and services with- out any stoppage. It will reduce evasion, yield higher tax and increase India’s GdP

The banking sector has been considerably expanded. Small banks, payment banks, which are now available through licenses on taps, have provided more options to the consumer. The Bankruptcy and Insolvency Code, coupled with amendments to the Sarfaesi Act and strengthen- ing of the debt recovery Tribunals will go a long way in empowering the banking system to re- cover dues.

The 14th Finance Commission has enhanced the share of the states in the central tax pool from 32 per cent to 42 per cent. This has empow- ered the states to spend more on development

In the past two years, the NdA broadened its footprint all over the country. After the Lok Sab- ha elections, the NdA won in the states of Ma- harashtra, haryana, Jharkhand, Jammu and Kashmir and Assam. We lost in delhi and Bihar. The Congress, meanwhile, lost every state post 2014. The NdA today, besides ruling the centre, is in power in 15 states in the country.

The next year will witness many more important legislations and directional steps in policy formulation. Under prime minister Modi, our effort will be to grow and grow faster. We have shown the world a government with a difference. We will continue to strive in that direction.

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