15 - 12 - 2018

India on growth path Modi has to add dynamics

India is on growth path. Latest quarterly figures say in April-June it touched 8.2 per cent. It beats the Reuters figures of 7.6 percent or IMF projections of around 7.3 percent. It is the highest since 9.2 percent growth registered in January-March 2016.

 

The RBI report is also buoyant and finds manufacturing and agriculture growing. Infrastructure should add to it. But it does not also say that the rate of growth would be sustained. During the past some time, the economy grew in some quarters but overall annual figures have remained around 7 percent. 

Very few economies are growing at this rate. This helps the NDA government in an election year.As per RBI, the government’s policies are on correct path. But it should not create complacence. 

The four years of Prime Minister Narendra Modi’s government apparently has clean slate and is not sullied by any scam or poke-marked deals. Nobody, not even the opposition, has been able to level a charge against the government. Congress has yet to come out with any tangible proof for the Rafael deal. 

The people still apparently have faith in Modi though that view is not uniformly true about many of the state governments. Even in Assam, people feel Modi cannot do any wrong but the state government is reportedly not functional.

This should mean that political economy is favourable to NDA. But to turn the people into voters the government would have to take a number of drastic steps and correct many wrongs done by the UPA government.

Let us start with the 431 programmes that the government launched during the last four years. Individually they are doing well. The public, however, does not have a clear perception. They are not even aware that so many programmes have begun in such short time. The people cannot be blamed. The numbers are big and public memory has its limitation. If the government wants to take its benefit it has to repackage the programmes in bunches – may be ten or so. Inflation even around 5 percent is hitting the people as it is over accumulated 60 plus percent since 2010. The NDA government has to take careful steps so that people know they are getting what they want.

There are some other aspects that are being obfuscated by some not so intelligent approach. Development is happening in the railways, ports and Sagarmala, gas connections, road sector, skill development and many others. 

Many of these are delivering. But the machinery is unable to reach the message to people. 

Instead some faults here and there are creating an impression may be contrary to the reality. Let us take for example the railways. Because of severe operational mismanagement there is perception that trains are running late, dynamic fares are fleecing people, cancellation charges are atrocious. 

Profiteering, in people’s perception, seems to be the motive of the new railway system. The Railway Board managed by officials also is aware of it. Why do not the officials tell the government that most of these are unethical and should be corrected? They are unable to state why a pilgrim train to Katra (Vaishno Devi) should have premium dynamic fare structure. Such pilgrimage is done mostly by citizens with below average incomes. When it hurts them it shakes the ballot box.

Even the slightly better off – India does not have in reality a class that is rich – rue why they would pay atrociously high fares for travelling in Rajdhani, Shatabdi or many so called premium trains. 

The rationale of high cancellation charges where people lose up to 100 percent of the fare paid is difficult to understand. Number of travelers is so high that no train in even in non-peak season has a single empty berth. The wonder is why a cancellation should cost that high – almost equal to a tatkal ticket. It is a people’s government and they want the government to understand that they are paying quite high fares and if they are not travelling they should be refunded all except minor clerical charges of Rs 10 to 20 per ticket. It is not happening and the angst is growing.

The railway finances are a difficult number game. Most of these policies were drawn by Congress-led governments. People wonder why the people-friendly government of Modi has not corrected it. The people should not be punished for bureaucratic idiosyncracies.  The Ujjwala gas connections are another puzzle. The publicity itself stating the connection is free was not correct. The charges for first cylinder and hot plate were to be collected in six monthly installments.

There is now a feeling that they have been cheated. Apart the subsidy that was to be refunded to their banks has not reached in many cases except some big cities like Delhi. It puts the credibility of the supplier at stake. There are rumblings. Today many kitchens are finding it difficult to have a refill.

The road sector is the fastest growing. It is connecting but at a high cost to the users. There are multiple taxes and tolls for travelling even between adjacent villages leading to innumerable disputes. The fuel cess of Rs 8 per litre is a huge cost. These are adding to inconvenience, inflation and irritation. 

So are high petro prices and income-tax.

In the west, there are parallel roads and it is not must to pass through toll roads. It needs to be done here too or ideally abolish tolls. Besides, instead of reducing tolls as costs are realized, it is based on a faulty concept of linking it to inflation. 

Banks are also causing enormous problems and irritation apart from the NPAs. A transfer of account earlier was used to be done on a simple application between any two PSBs, now repeated KYC is tormenting. Losing to irrational fees, charges, even for a cheque book or ATM card and TDS reduces deposits breaking hearts. People need care.

Similarly GST on house tax, water, electricity, gas and what not is adding to discontent. Why should there be a tax on tax?

Why should job generation remain a government responsibility? Corporate should be told to create quality jobs and be model employers. If these issues are remedied, the dynamics of politics can change.

There are tremendous expectations from Prime Minister Narendra Modi. Even a fraction of it is done it would change the phenomenon.