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Six months of Modi government: Decoding the 'Acche Din'

By Ajith Vijay Kumar | Last Updated: Tuesday, May 5, 2015 - 01:18

To The Point

After 30 years of politics of oscillation, a period when 'coalition dharma' was the cornerstone of governance and governments, May 16 saw the emergence of the Bharatiya Janata Party (BJP) with an absolute majority.

More than the party, India had voted for the promise held by one man – Narendra Modi. After a decade of despondency, it was time for action and Modi was given the mandate.

While it may be imprudent to ignore some path breaking initiatives started by the UPA government – especially UPA I, when economy was soaring - Manmohan Singh ended his stint at a low, partly because of the general sense of drift and corruption allegations and partly also because of his image as a non-proactive prime minister.

As a personality, Modi was radically different from his predecessor and he made the biggest political promise of all – delivering 'Acche Din'.

It was an explosive proposition. Two words that signified the aspirations of the billion plus Indians.

More than anything else, 'Acche Din' signified a rekindled hope in the aam aadmi that tomorrow would be better than yesterday.

Six months may be too short a time period to expect a complete overhaul of the 'system' but 180 days are good enough time frame to gauge the intent of the new dispensation.

One approach to gauge Modi government's performance would be by looking at hard data. Inflation, GDP growth, fiscal deficit and other such macroeconomic pointers tell a story about the health of the economy.

For every attempt by Modi government to take credit for falling food/fuel prices, detractors can hold up the dismal GDP data as a counter point. And they have a point: The fall in retail inflation has more to do with a softening of prices globally and less to do with the steps taken by the government to tame it.

The debate can be never ending.

A more realistic prism to analyse 'Modi raj' can be its impact on different strata of the society. They are the real stakeholders. They are not economists. They have their feet on the ground.

The Poor - Empower

From UPA government's focus on guaranteeing food, education as a solution to poverty to Modi's promise to build toilets and houses for the poor, those at the bottom of the pyramid have been at the centre of the policies rolled out by successive governments, but the question, always, has been whether anything has changed on the ground?

Tendulkar committee fixed the poverty line (2011-12) at Rs 27/day in rural areas and Rs 33 in urban areas, it was later revised by a similar panel headed by former RBI governor C Rangarajan to Rs 32 in rural areas and Rs 47 in cities.

The governments do need a reference point to ensure targeted delivery of assistance to those who most need it, however, what has long been missed, or worse ignored, by those out to create vote banks based on handouts is the desire in the poor to live a life of dignity.

The poor, especially in the rural areas, in our country have few or no rights. From marginal farmers to SC/STs, millions of rural poor yearn to get out of the clutches of money lenders and landlords who have exploited them for generations.

The urban poor have similar issues but those who need most help are the families that are just about 'middle class'. Blue collar workers, maids, security guards, they are the invisible citizens of our cities. A spell of job loss or ailment in the family is all that is required to push them back to poverty.

More than assistance, what they need is empowerment. The Modi government has started on the right note by stressing on making the marginal sections of the society self-sufficient.

Middle Class - Deliver

Among the most vocal supporters of Narendra Modi, the middle class was enthused when the NaMo bandwagon rolled into Delhi. Years of high inflation and high interest rates had hit them hard, especially the salaried class.

Their limited income seldom dissuades them from dreaming big. Also, a majority of them, especially in the urban areas are aware of the limitless possibilities that can be very well within their grasp.

Hence, Finance Minister Arun Jaitley's recent statement that the government is not keen to increase income tax rates and instead look at ways to widen the tax base is being welcomed given its direct impact on household budgets.

But the one issue that can make or break 'Acche Din' for them is their experience while dealing with interfaces of government delivery.

While they may agree that PM Modi needs time to bring structural changes but they will not buy government's failure to ensure that the people are delivered promised services.

It's not about big things. Free air at petrol pumps or the guarantee that LPG cylinders are not tampered with are issues that affect them directly. And, the fact remains that nothing has changed on the ground.

All that is needed is a strong will on part of the government.

The middle class revels when PM Modi enthralls New York and Sydney, the middle class loves his speeches. But they also expect him to address small but significant issues that define their living. He will do it, they hope.

The Business Class - Facilitate

India Inc had high expectations from PM Modi after the growth momentum slipped away due to the policy paralysis during the latter part of UPA's tenure.

The private sector was hoping for path-breaking reforms that would kickstart the economy. Problems with land acquisition and the credit squeeze were snuffing out the limited oxygen business had been left with after the global economic slowdown.

While Modi deserves credit for toning up governance by ensuring that files move faster and bureaucrats get a free hand to implement policy, however, the positive vibes thus created are yet to fully translate on the ground.

GDP growth has not picked up as industrial output has remained stagnant. Big job creating sectors like real estate are besieged with huge unsold inventories, indicating that all is not well with the economy.

With the inflation now well under control, the industry would be expect the government to lean on the RBI to cut interest rates.

The markets are booming but that's primarily owing to the positive speculation on India's growth story.

Modi does have some grand plans like the 'Make in India' – already being implemented in defence deals - but what he needs to be cautious is the real danger that euphoria of hope may quickly turn to anger if his government fails to deliver on reforms.

The government's positive stance towards FDI and private investment in sectors like railways is also an area that would be keenly watched.

Modi's emphasis on skill development through 'Shrameva Jayate' and labour reforms are initiatives that may deliver results in the coming days as the demographic dividend that Modi speaks about often can turn into a curse, soon, if the youth fail to find jobs.

The Common Denominator

From 100-day agenda to Modi @ six months, appraisal of a task as big as running a government that's accountable to 125 crore people is best performed by going by the basics.

And, the basics, as of now, suggest, Modi government has at least managed to remove inertia in governance. With stable inflation and steady outlook, the aam junta appears willing to give him a longer rope.

But May 16, 2015 may be an altogether different story.



First Published: Wednesday, November 26, 2014 - 12:20

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