Many Indian and international observers were surprised, and some were even shocked, when the Finance Minister of Government of India announced that around Rs. 7 lakh crore would be pumped into Indian economy to tone up the economic development of the country and make a big leap forward.
Why surprise and shock?
The surprise and shock were mainly because such bold ( what some critics term as audacious) steps had never been taken by any government of India during the last seventy years. Such massive announcement of providing Rs. 7 lakh crore stimulus to the national economy has been preceded by two equally bold ( some call it audacious) steps of demonetization and introduction of GST, which are no doubt far-reaching economic reform measures.
The surprise and shock are all the more so since no other Prime Minister of India in the past had taken such bold measures towards reform, taking a calculated risk.
The fact that critics cannot ignore :
There seems to be an equal number of admirers and critics/skeptics about the course of changes that would happen in the next two years when the five-year term of Narendra Modi government would conclude.
However, even Mr. Narendra Modi’s pledged critics cannot deny the fact that from day one of assuming office as Prime Minister of India, Mr. Modi has been stressing that economic and industrial development in a massive way can alone lead to solutions for the multitude of problems faced by India and that reform measures are needed.
Compulsive need for bold steps :
With more than around 25% of national population remaining below poverty line, the huge and rapidly expanding youth population seeking jobs and employment and lack of skill amongst the large section of youth in the country, multitude of problems inevitably exist in India and they cannot be solved without taking very major steps to push up the development agenda.
With such problems, coupled with huge corruption and nepotism not only in government machinery and amongst politicians but also from business houses, the scenario is challenging for any government.
For the most of seventy years, after India attained independence, most of the governments in India have been mouthing platitudes, making promises, initiating half-hearted steps and introducing many populist measures to buy peace from the people, particularly those belonging to lower income group.
With such approach, some improvements have happened, but the fundamental problems remain unattacked and without much of overall improvement for all segment of the population.
Mr. Modi taking the bull by horn :
Certainly, Mr. Modi is taking the bull by horn to deal with a difficult situation in a straightforward way
Several of the schemes initiated by Modi government in the last three years such as clean India campaign, construction of thousands of toilets throughout the country, opening of zero bank accounts for millions of poor Indians to enable them to have banking operations, strong promotion of digital economy and encouragement of yoga culture should not be viewed in isolation as mere social welfare schemes. They are much more than that, as they would fundamentally change the psyche of the countrymen for the better, which is an essential prerequisite for motivating the people to improve their life content and target higher goals.
It is well known that widespread corruption in the country has resulted in wastage of substantial government investments carried out in the past by siphoning away of the funds by unscrupulous persons at various levels. The demonetization and GST which were followed by binami law, identification of shell companies and debarring the directors in such companies are measures to attack the corruption problem directly, which again is a prerequisite for growth.
Modi government is not sparing the inefficient or dishonest businessmen and investors, by implementing bankruptcy regulations that are resulting in incompetent owners of the industrial and commercial establishments paying the price and losing their holdings. This is far different from the earlier days when the industry would become sick, but industrialists would never become sick.
The massive efforts to promote skill development in the country is another noteworthy long-term strategy.
The fact is that the banking institutions in India are nearly bankrupt now, which is the cumulative effect of mismanagement and dishonest practices and political influence in the banking operations over the last several decades. With banks unable to lend due to a huge number of defaulters and accumulated nonperforming assets, the investment climate in the country has become poor.
The most urgent need in India is to create more jobs to make the huge youth population become productive and prompt them to acquire the skill to take up the emerging opportunities in the job front.
The Bharatmala scheme to construct 34,800 kilometers of road in which Modi government proposes to invest Rs. 5,35,000 crore is an extremely pragmatic step. This would strengthen the infrastructure facilities, create demand for goods and services, promote job avenues, create interest in acquiring skill amongst job seekers and encourage huge interest in setting up projects for production of a variety of goods that would be needed for the Bharatmala project.
Critics are not sparing :
While Modi government is moving with great speed, the critics are not sparing. There seem to be overwhelming interest amongst critics and media in highlighting the deficiencies rather than identifying the bright spots. Most of the media discussions are half-informed and opposition political parties want to see only the negatives.
Unlike China where the Chinese President Xi Jinping could initiate far-reaching measures without having to face the electorate in the noisy elections, Mr. /Modi has to necessarily take the countrymen along with him while initiating such strong and bold measures. He is trying his level best under the circumstances.
Where would the money come from , critics ask :
While viewing the Rs. 7 lakh crore stimulus for the Indian economy that has been announced, the critics ask as to where would the money come from. They seem to be not convinced that the issuance of recapitalization bonds would enable the government gets the level of money required.
However, there are also view that it would be possible to raise funds in various ways such as overseas investment, dilution of government equity in various public sector projects, etc.
The courage of Mr. Modi, the driving force :
In any case, there is absolutely no doubt that Narendra Modi government is leaving no stone unturned and seem to be having extraordinary confidence that large section of Indian population understands the compulsive need for such measures.
While the critics and media would continue to advance criticisms and would view Modi government’s bold moves and strategies in disbelief. Mr. Modi is obviously fully convinced that he would lead the country in a way that would take the country forward to find solutions for the multiple problems.
The confidence of Mr. Narendra Modi and his courage of conviction is the basic driving force for the far-reaching desirable changes that are taking place in India today.