Narendra Modi once said, “The diversity of India, of our civilization, is actually a thing of beauty, which is something we are extremely proud of.” As he faces his first major litmus test post-2014 on the national stage next year, he must rue the electoral dynamics and the chaos of identities whose interplay has defined Indian politics since times immemorial. The country has seen a potpourri of policies: from GST to Demonetization and Ayushmaan Bharat; a montage of different sides of (and for) the ruling regime: a greater representation of India on the international stage, electoral realities changing in the country, shifting priorities of the youth, and greater activity of the media and civil society in the country. The country has won some, in moving towards greater inclusivity with schemes such as Pradhan Mantri Jan Dhan Yojana, and lost some, such as some of our luminaries and the sustained influence of caste and communalism in India. The Padma, the lotus, however maintains its identity as the flower (read: party) with a difference: un-besmirched by the filth in which it grows. Strong as that statement is, recent developments and the accomplishments of the Modi government should a good retort to any questions raised against this modern-day Padmacharita, the narrative of the Lotus (read: BJP).
As I look back on the four years of the Modi government, looking at both its highs and lows, I come to the conclusion that India needs continuity in 2019; a chance for schemes that have come into place after the overhaul of age-old systems and constructs to mature, and which without standing the test of time may face a premature rejection if not given the time to incubate, much to the loss of the country and history. Yet another chance for Dharma, as I shall conclude my article with.
Overhaul or a Port of Call?
Since India’s Tryst with Destiny on 15th August 1947, the country has followed a planned economy-model. First begun by Netaji Subhash Bose, rudimentary economic planning of the late-1930s transformed into a formal model of planning under the Planning Commission, established on 15 March 1950. Bose once famously said”
“A comprehensive scheme of industrial development under State ownership and State control will be indispensable. A new industrial system will have to be built up in place of old one, which has collapsed as a result of mass production abroad and alien rule at home. The Commission to be set up for planning will have to consider carefully and decide which of the home industries could be revived despite the competition of modern factories, and in which sphere large-scale production should be encouraged. However much we may dislike modern industrialism and condemn the evils which follow, we cannot go back to the pre-industrial era, even if we desire to do so. It is well, therefore, that we should reconcile ourselves to industrialisation and devise means to minimise its evils and at the same time explore the possibilities of reviving cottage industries where there is a possibility of their surviving the inevitable competition of factories. In a country like India there will be plenty of room for cottage industries, especially in the case of industries, including hand-spinning and hand-weaving, allied to agriculture. Last but not the least, the State, on the advice of a Planning Commission, will have to adopt a comprehensive scheme for gradually socialising our entire agricultural and industrial system in the spheres of both production and distribution. Extra capital will have to be procured for this, whether through internal or external loans or through inflation.”
Nehru was a major admirer of the Soviet model of economic planning and he carried forward Bose’s initiative post-independence. The first Five-Year Plan was launched in 1951 and focused mainly on development of the agricultural sector. However, with time, this Commission start appropriating many of the powers that should have been devolved to other committees and state units. It became a behemoth of an organization that espoused a top-down approach from the Commission to all of the country. In the words of Ajay Chhibber, Director General of the Independent Evaluation Office (IEO)
“The Planning Commission was created in 1950 through a mere Cabinet resolution. It has no Constitutional sanctity. It came into being through a mere executive order and then it just continued to grow, taking over jobs assigned to other institutions like the Finance Commission. For example, allocation of funds to the States was the job of the Finance Commission, sanctified by the Constitution, but the Planning Commission appropriated this task to itself. Because of a different historical context, it even got into micromanagement of devolution of funds, how schemes should be run and even to the extent of how the states should spend those funds. When we started looking at the schemes, and travelled to the States, we realised that the States were not very happy with the way such schemes were designed Centrally and literally pushed down their throats. The States were made to follow the “one size fits all” theory of the Planning Commission for the implementation of the schemes. The States wanted more flexibility; they wanted freedom to design their own schemes, the way they should be implemented and the way funds meant for various schemes should be spent. They wanted to experiment with new ideas, new ways of implementing ideas. At the moment they are denied this freedom.
We realised that the real problem in schemes not benefiting people lay not so much in the schemes as such but in the way they were approached by the States. We realised that different approaches should have been adopted by different States, which, at the moment, is not available. The Planning Commission did try to inject some flexibility, but that did not have much impact. Also, the majority of the staff at the Planning Commission are generalists, not domain experts, which made it frustrating for the States to explain different issues. That is when we started looking at the Planning Commission itself. The then Prime Minister Manmohan Singh too said that we needed to reform the Planning Commission. So we started looking at the historical background, why it was created and whether it was still serving the purpose for which it was created. We realised that the Planning Commission was initially envisaged only as a think tank, but over a period of time it appropriated to itself the work of other institutions and started the tight-fisted approach of allocating funds between the Centre and the States and among different Central Ministries. This was a task which should have been done by the Finance Commission and the Finance Ministry, for which they are mandated, but the Planning Commission appropriated this job to itself.I have explained in the report how and why this happened and have recommended that they should just be a think tank, thinking big for the long term, generate fresh ideas, look at innovations, suggest systemic reforms and not get involved in the humdrum of routine administration.”
The IEO Report laid the ground for the dissolution of the Planning Commission. According to Chibber, “It is clear that the Planning Commission in its current form and function is a hindrance not a help to India’s development. In my experience, it is not easy to reform such a large ossified body and it would be better to replace it with a new body that is needed to assist states in ideas, to provide long term thinking and to help cross cutting reforms“. The Union Government of India announced the formation of National Institution for Transforming India (NITI) Aayog, the replacement for the Planning Commission, on 1 January 2015. It was a major move in India’s modern history to rethink the idea of a planned economy.
How Is The NITI Aayog Different From The Planning Commission?
Well, Finance Minister Arun Jaitley’s assessment says it all: “The 65-year-old Planning Commission had become a redundant organisation. It was relevant in a command economy structure, but not any longer. India is a diversified country and its states are in various phases of economic development along with their own strengths and weaknesses. In this context, a ‘one size fits all’ approach to economic planning is obsolete. It cannot make India competitive in today’s global economy.” It was this sense of embracing its constituents in a model that was evidently bottom-up and not top-down (as in the case of the former Planning Commission) that drove the IEO and the Modi government to take this monumental step. In the former model, State governments had equal responsibility for the development of India as the Central government, but they often did not have the funds to do the needful. The Planning commission was also an unelected body that was given the powers to dictate the road map of development to an elected state executive in a move that could dilute accountability and responsibility. This changed with the introduction of more involvement and participation of State governments in the NITI Aayog. The permanent members of the governing council of the Aayog are all the state Chief Ministers, along with the Chief Ministers of Delhi and Puducherry, the Lieutenant Governor of Andaman and Nicobar, and a vice chairman nominated by the Prime Minister. In addition, there are certain temporary members who are selected from leading universities and research institutions. Today, the NITI Aayog has achieved an immense lot! Initiatives like Ayushmaan Bharat, the government’s approach towards artificial intelligence and water conservation measures, and the draft bill to establish the National Medical Commission to replace the Medical Council of India have all been conceptualised within the Aayog, and are being taken forward by the respective Ministries. NITI Aayog has also established a Development Monitoring and Evaluation Office (DMEO) that collects data on the performance of various government Ministries on a real-time basis. The data, thus collected, is then used to establish accountability and improve performance in the various government wings.
So, the Modi government brought in the NITI Aayog? All well and good. What now? Is that not enough?
Apparently and understandably not. The reorganization and rethinking of the planned economy of India is not just an overhaul, for the sake of overhaul, but rather a port of call for more things to come. Or atleast that is how it should be. NITI Aayog needs to evolve into a stronger organization. Adding a bit more teeth and making it slightly more detached from the government must be priorities that I feel Modi and his government can bring about, with their history of bringing necessary changes where and when required. NITI Aayog must also keep expanding its horizons in terms of applications of its research and intervention, including in seeing how the bureaucracy can be made more specialist and streamlined, if need be.
More governance, less government, after all, as Modi says!
Reforms, Reforms, Reforms
The one government in India since atleast the 1990s that has been on such a massive spree of reforms has been the Modi government. Yes, the economic liberalization of 1991 stands out, and the Manmohan Singh government brought in the Right to Information (RTI) and Right to Education (RTE), but the scope and sweep of reforms that Modi has introduced is breathtaking. Whether it has accomplished all that it was meant to do is for time to tell. Let us look at some of these reforms critically.
Goods and Services Tax (GST)
The basic idea for introducing Goods and Services Tax (GST) is to convert India into a single market. Along with the Insolvency and Bankruptcy Code 2016, which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy, the GST has led to ease of doing business, fiscal consolidation and a strong economic growth of India over the last four years. The GST scheme has led to a unified tax system removing a bundle of indirect taxes, besides leading to a reduction in manufacturing costs that have brought down prices of consumer goods. A unified tax regime is also expected to lead to less corruption which will indirectly affect the common man, besides helping in goods and services now being easily exchanged between states. On the flipside, services are expected to be more expensive and familiarisation of the common man to the nuances of this scheme will take some time.
The GST Council has bracketed all the goods and services in the country in five categories – 0%, 5%, 12%, 18% and 28%. Petroleum products, alcoholic drinks and electricity are not taxed under this scheme and instead are taxed separately by the individual state governments. The government has imposed the tax rates in a way that essential services and food items remain in the lower tax bracket and luxury services and products attract higher tax. One of the most heartening addition to the market under the GST regime has been the anti-profiteering clause (Clause 171). The anti-profiteering clause in the GST law mandates that all businesses have to pass on the benefits they get from lower tax rates to the end consumer. Not complying with these provisions can result in businesses having their registration cancelled and being asked to pay heavy penalties.
If the numbers and comments by experts are any indication, the GST initiative has been fairly successful. The collections for October 2018 have been ₹1,00,710 crore. Around 38,00,000 new taxpayers have registered after the introduction of the GST scheme and the total number of taxpayers, as of October 2018, stands at a whopping 1,14,00,000. Even the Chief Economist of the International Monetary Fund (IMF) Maurice Obstfeld praised the Modi government for the solid economic growth of India and the economic reforms introduced, particularly the GST. At a more local level, the initiative has paid dividends: A recent analysis cited by the Finance Ministry showed that a household has been saving up to Rs 320 every month on commonly-used daily item including soaps, food items and cosmetics after the implementation of GST since July 2017. There are still issues like improvement of enforcement and infrastructure for the new tax structure, and this sorely requires strong political will and leadership, coupled with a sense of continuity. Something that I feel our Prime Minister Narendra Modi can bring through, if given a second opportunity to serve.
Demonetisation
Given the importance of currency in contemporary times, one of the most dramatic moments of Modi’s tenure since 2014 was when, on 8th November 2018, Modi announced a plan for demonetisation in the country in an unscheduled live national televised address at 20:15 IST, only hours after informing the Union cabinet! The very next day ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series were rendered useless and replaced with newly issued ₹500 and ₹2000 banknotes in exchange for the demonetised banknotes. Then started a crescendo in the theatrics with the poor common man having to wait in line for hours to get his money replaced. I myself saw a particularly long line winding around the circular buildings in the middle of Connaught Place in Delhi. Even Rahul Gandhi, a man born with the proverbial silver spoon, joined a line to share in the angst of the common man (apparently). The angst even percolated into Lutyens Delhi and the elite, with former RBI governor giving perspective, by saying:
“Demonetisation slowed down India’s economic growth at a time when the world economy was growing and it impacted the GDP significantly.”
Nobel laureate Amartya Sen, severely criticised the move, calling it a “despotic action” among other things, while Steve Forbes (of Forbes magazine fame) described the move as ‘Sickening And Immoral‘. Traders and micro, small and medium enterprises (MSMEs) also cited job losses (reported at the rate of 43% in the trader segment, micro-segments reported job losses of 32%, small segments reported 35% and medium-scale industries reported 24% job losses) and problems due to this measure.
So is the picture as grim as it sounds and was demonetisation plain bad?
Not through and through at all! We can see this if we look more closely at what the move aimed to do, in the first place. Its first primary goal was to track and account for the black money in the country, besides tax evaders. According to the official ‘Operation Clean Money’ Report by the Income Tax department, 2% corporates were seen to deposit 22.6% of cash and the average deposits in this category is at ₹ 1,37,00,000. In the non-corporate and proprietor category, the average deposits stand at ₹ 42,00,000 and approximately ₹ 16,00,000 respectively and together they account for an approximate 50% of the deposits in the overall category. During demonetisation, the deposits were backed via identity cards and later most of the bank accounts were linked to Aadhaar cards of the depositers. As per another official Status Report, the following was the breakup of the sources of cash deposits: 57.5% Cash Sales, 20% Cash out of earlier income or savings, 9.6% other cash receipts, 4.2% cash out of receipts exempt from tax, 4.1% cash withdrawn out of bank account, 2.9% loan repayment in cash and 1.7% from other sources.
Taxpayers provided responses for 13,33,000 accounts involving cash deposits of around ₹28,90,00,00,00,000! If not for demonetisation, how could these details be unearthed? Based on these findings, the Income Tax department categorised taxpayers in various categories: high-level, medium-level and low-level tax evaders. Notices for first 1,00,000 evaders has already been issued, as per the official Taxpayer Segment Analysis. The steep increase in the number of Income Tax Returns filed as well as the amount of tax collected in 2016-17 and 2017-18 showed that demonetisation has also played a big role in both widening the tax base. During the Fiscal Year 2017-18, 6.84 crore Income Tax Returns (ITRs) were filed with the Income Tax Department as compared to 5.48 crore ITRs filed during the Fiscal Year 2016-17, thereby showing a growth of 24.81%. Digital payments have also grown by leaps and bounds in the last two years, leading to a more cash-less economy. As per the RBI Annual Report 2017-2018, in the last two financial years (2016-17, 2017-18), retail digital payment methods saw 103% increase in volume and 111% increase in value. If one were to compare the RBI Monthly Bulletins for December 2016 and August 2018, the monthly usage of mobile wallets has also been seen to grow by 311% in volume and 358% in value from September 2016 to June 2018.
Besides these ways of keeping a track of black money, the Indian government has gone on an offensive against serious offenders and also started criminal investigations into cases of money laundering, bribery and financial offences. When we see Christian Michel and Vijay Mallya in the clutches of the Indian government, one can only be led to believe that even though many talk big on corruption and black money, it is the Modi government that truly walks the talk.
Major Reforms Still To Come
The lateral entry of deserving citizens into the Civil Services and the Women’s Reservation Bill are two reform-based legislations that I personally look forward to. The latter has been an area of interest and concern for me, since a fair few years. It is the need of the hour that women are represented in the highest bodies of the country. I would, however, also be interested in knowing how the government looks into the idea of intersectionality of gender with other identities, in this context. But that academic interest and query is for later!
The Right Welfare State And Services, Galore?
The other major area that the Modi government has been looking into is that of services and the conception of a Welfare State. Hardly a scion of the Left, Modi has always had a deep concern for the downtrodden and weaker sections of the population of India. Even though his party and government may have been blamed for capitalistic pursuits at times, he has always been as much concerned with the lower strata of society as with the high-flyers of the international market. In this regard, some of his schemes have been revolutionary and worth describing.
Ayushman Bharat Yojana
I recently read that somebody had nominated Narendra Modi for the Nobel Prize in Peace. Notwithstanding whether he deserves it or not, which could be a debate for later, the reason for this apparent nomination was a government scheme that has been rolled out recently: Ayushman Bharat Yojana. Also called Modicare, the scheme, as per a government release aims at making path breaking interventions to address health holistically, in primary, secondary and tertiary care systems, covering both prevention and health promotion.
The scheme is an umbrella of two major health initiatives: Heath and Wellness Centres and National Health Protection Scheme (NHPS). The National Health Protection Scheme will cover over 10,00,00,000 poor and vulnerable families (with approximately 50 crore beneficiaries) providing coverage up to ₹5,00,000 per family per year for secondary and tertiary care hospitalization.
On the other hand, under the Yojana, the government also plans to setup 1,50,000 Health and Wellness Centres will be setup to provide comprehensive health care. This will include for non-communicable diseases and maternal and child health services, apart from free essential drugs and diagnostic services. Some of the services to be provided at Health & Wellness Centre include pregnancy care and maternal health services, neonatal and infant health services, child health services, services for chronic communicable diseases, management of mental illness, dental care and eye care.
The progress of the scheme has been outstanding. Thirty three states and union territories have accepted the scheme except three Delhi, Odisha and Telangana. More than 1,00,000 people have taken benefit of the scheme till October 2018. By 26th November more than 8,25,000 e-cards had been generated. There has also been an increase in concerted efforts to recruit more private hospitals to the scheme. The Ayushman Bharat Yojana is slated to be the world’s largest government-funded healthcare programme and a move away from the government that brought about the scheme is a move against an ambitious and yet fairly realizable programme for the betterment of health-services for the common masses of the country.
Pradhan Mantri Rozgar Protsahan Yojana
The idea of employment and services from the government is good but what if people themselves can increase the same and add on to what the government provides. Recently the Indian government has started to incentivize job creation along with social security cover in a model that is state-employer-funded benefit scheme. As per the government document on the scheme,
“The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Plan Scheme has been
designed to incentivise employers for generation of new employment, where Government of India will be paying the 8.33% EPS [Employment Pension Scheme] contribution of the employer for the new employment. This scheme has a dual benefit, where, on the one hand, the employer is incentivised for increasing the employment base of workers in the establishment, and on the other hand, a large number of workers will find jobs in such establishments. A direct benefit is that these workers will have access to social security benefits of the organized sector.”
In the last decade, the growth of economy at an annual rate of 7% to 8% was accompanied by a low growth in jobs. The proportion of persons in the labour force declined from 43% in 2004-05 to 39.5% in 2011-12. As per the Sixth Economic Census (2013), around 58.5 million establishments were in operation of which 59.48% were in rural areas and 40.52% in urban areas. Further, about 77.6% establishments (45.36 million) were engaged in non-agricultural activities. These establishments employ around 131.29 million persons, of which 51.71% were employed in rural areas and 55.71% were working in establishments having at least one hired worker. Thus, the government felt that a significant potential for employment lay in these establishments, especially those covered under the Employees’ Provident Fund Organisation (EPFO). It is to tap into this area that the government released the PMRPY scheme. In the Budget Speech 2016-17, it was stated that
“In order to incentivize creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. This will incentivize the employers to recruit unemployed persons and also to bring into the books the informal employees. In order to channelize this intervention towards the target group of semi-skilled and unskilled workers, the scheme will be applicable to those with salary up to Rs 15,000 per month. I have made a budget provision of Rs 1,000 crore for this scheme.”
According to the Ministry of Labour, 77,83,658 new jobs were created in the formal sector between April 2016 and September 2018, under the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). 96,921 establishments across 36 states and Union Territories have also benefited from the scheme till 30 September 2018.
Digital India Programme
Digital India is a campaign launched by the Government of India to ensure that the Government’s services are made available to citizens electronically. This is slated to be done by improved online infrastructure and by increasing Internet connectivity, thereby making the country digitally empowered in the field of technology. The initiative includes plans to connect rural and semi-urban areas with high-speed internet networks. Digital India consists of three components: the development of secure and stable digital infrastructure, delivering government services digitally, and universal digital literacy.
In July 2015, top CEOs from India and abroad committed to investing ₹22,45,00,00,00,00,000 towards this initiative, saying that the investments would be utilized towards making smartphones and internet devices at an affordable price in India which would help generate jobs in India as well as reduce the cost of importing them from abroad. The scheme seems to have greatly helped the Indian masses and included many in the digital fold. Internet subscribers had increased to 50,00,00,000 in India as of April 2017. India is now adding approximately 1,00,00,000 daily active internet users monthly, which is the highest rate of addition to the internet community anywhere in the world!
In Conclusion
Dharma is that which sustains the multiplicities of identities and realities. That which equilibriates. That which harmonizes. The Modi government has done various things to stabilize the rocky boat that the Congress had left them. After the flurry of scams of the Congress from that period and the clueless politics of the party at the moment, one can only see the clean and coherent BJP under Narendra Modi as the right choice, the Dharmic option. Some may argue that the cases of communal tension have increased under the BJP. Having been a vocal and strong critic of the fringe Right radicals myself, I would however, like to highlight the visible movement away from violence for Gauraksha and mob lynchings by Modi (expressed on occasions such as during his Independence Day speech recently). This is what gives me some hope that the BJP will steer clear of the false Hindu machoism that some are so proud of. Hinduism has been a strong and yet inclusive and tolerant way of life, and any party or formation that aims at representing it must espouse these values. Taking all the sections of society forward together, caring for the masses in a sincere and honest manner, maintaining a clean record in office and laying off the more base aspects of politics have all been Dharmic characteristics of this government, and it is this above all the various policies and programmes given above that make me side strongly with the BJP in 2019. Modi has often taken the plunge, notwithstanding what people felt or thought, if he has felt that a move or policy was for the good of the nation. This confidence and belief in that which is right above all else places my confidence in him and his government.
Not much unlike Krishna told Arjuna in the battlefield at Kurukshetra in the Mahabharata, I would like to call on all those who want to safekeep what has always been a haven of Dharma – India to stand by the BJP and fight for a future that remains clean and truly Indian, in its inclusive and progressive manner of thinking and conducting oneself. I would like to end with a few verses from the Taitiriya Aranyak:
धर्मे सर्वं प्रतिष्ठितं तस्मात् धर्मं परमं वदन्ति|which means `Everything is dependent upon Dharma. That is why Dharma is said to be Supreme’.