Mixed bag

Fours years since Narendra Modi became PM, how has his government fared?

56-modi Social studies: Modi with beneficiaries of the Pradhan Mantri Mudra Yojana in Delhi | PIB

Prime Minister Narendra Modi is everything Manmohan Singh was not. Unlike his predecessor, Modi has campaigned widely, stamped his personal style on policy initiatives, and presented himself as an outsider to Delhi’s power and pelf.

Now, with him about to complete four years in charge, everyone has an opinion on how the government has performed. Opinions differ sharply, depending on which side of the ideological divide one is on. Electorally, the BJP, led by Modi, has steamrolled the opposition. This, says the party, proves people’s acceptance of Modi’s governance style. The occasional defeat has been brushed aside as an aberration. Modi’s own popularity remains undiminished.

Modi has consorted with Saudi Arabia, and this wooing of the Muslim world, contrary to his own domestic compulsions, has been successful.

In Karnataka, he said, “The Manmohan Singh government was controlled through remote control by 10 Janpath.” This highlighted the current government’s strength. There is only one power centre—Modi.

But, while his stock among the faithful skyrocketed, many felt that it was not possible to have a debate on Modi’s policies without being angrily shouted down in a television studio, threatened on social media or on the streets. The political polarisation has been acute.

There have been atrocities against minorities and dalits, the backlash of which the government faced recently. Dalits erupted in protests across the country, primarily in BJP-ruled states. Though Modi brought focus on dalit icon B.R. Ambedkar, it was partly because he wanted to demolish the Nehru-Gandhi legacy in Indian politics. As a senior BJP leader said, “Politicians meant leaders from these families. Unless that was shaken, the BJP would need a long time to establish itself.”

Regarding social welfare, Modi was criticised for failing to deliver on his election promise of “Rs 15 lakh in every account”. However, his government has put emphasis on social sector schemes, under which people have been direct beneficiaries. “People have more expectations from us because they know that we can deliver. People know that when they say something, the government will listen and do it,” Modi said.

Among the many welfare schemes, the Pradhan Mantri Ujjwala Yojana and Pradhan Mantri Mudra Yojana have played a huge role. The Ujjwala scheme, wherein LPG cylinders are given to families below the poverty line, has helped the BJP connect with the electorate, especially women. The Mudra scheme has helped people start their own ventures. In early May, Modi took ownership of the schemes by meeting people who had benefited from them. Notably, by the time the Lok Sabha elections are held in 2019, these two schemes would have directly impacted 17 crore people. Though not every beneficiary is expected to vote for the BJP, they will at least know that these were Modi’s schemes; such has been the messaging. And, as Modi seeks a fresh mandate, sharper focus on these schemes would be key.

On the economic front, the government’s biggest advantage has been benign crude oil prices. When crude oil prices collapsed in 2014, the BJP government and state governments got an opportunity to maximise tax gains. The Modi government raised excise duty 12 times between May 2014 and September 2017. The increase in tax helped the government mop-up 02.4 lakh crore in 2016-17. And, though there is concern over increased burden on consumers, the government has ruled out a cut in excise duties.

Regarding the economy, people always look at the growth rate as an indicator. Under the current government, which is fascinated with numbers, there has been a change in the way gross domestic product (GDP) is calculated. Earlier, calculations used fiscal year 2004-05 as the base. However, this was changed to fiscal year 2011-12, six months after the government took charge. The changed methodology resulted in higher growth numbers, which the government took credit for when they were released in May 2015.

Bringing up bhim: Members of a dalit organisation clean an Ambedkar statue in Gujarat. While Modi has brought focus on the dalit icon, he has done so partly to demolish the Nehru-Gandhi legacy in Indian politics | AFP Bringing up bhim: Members of a dalit organisation clean an Ambedkar statue in Gujarat. While Modi has brought focus on the dalit icon, he has done so partly to demolish the Nehru-Gandhi legacy in Indian politics | AFP

The blow to these GDP numbers came when Modi took the political decision of demonetisation, in late 2016, to root out corruption. Though the number of income tax filers has increased, the impact on corruption seemed negligible. Demonetisation brought down the growth rate to 5.7 per cent, leading to severe criticism of the BJP, even from its core constituency of businessmen. The government’s programmes have so far failed to generate that feel-good factor that indicates a growing economy.

Moreover, private investor sentiments were muted because of the rising number of bad loans. However, the bank recapitalisation plan is helping dispel the sense of gloom. Also, the Insolvency and Bankruptcy Code, one of the key reforms of Modi government after the GST, is helping weed out distressed businesses.

Another criticism of the government has been the lack of jobs. “There is no evidence that the way we are going about skill development is leading to the transfer of skills that increase employability,” said former Planning Commission deputy chairman Montek Singh Ahluwalia. “It has to be India-specific, but we have to learn from other countries including Singapore and Indonesia, which are doing it better than we are.”

The government, however, has countered, saying it is focusing on self-employment. “We are going through several transitions, and these transitions are works in progress. Whether it is farm to non-farm, whether it is rural to urban, whether it is subsistence by self-employment to wage employment, or whether it is the unorganised sector,” Bibek Debroy, chairman of the prime minister’s Economic Advisory Council, said during a recent event.

In fact, government officials say that the Modi effect is now showing on the economy, just like it has been in electoral politics.

However, a problem area has been the agriculture sector. Though Modi promised to double farmers’ income by 2022, the sector was hit badly by demonetisation and the introduction of GST. Projecting the growth of the economy, T.C.A. Anant, former chief statistician of India, said agriculture and allied industries would grow by just 2.1 per cent in 2018-19, compared with 4.9 per cent in the previous fiscal.

Export data shows that agricultural exports dipped from $21.5 billion in 2014-15 to $16.3 billion by end of the 2016-17 fiscal. “The entire sector is awaiting Narendra Modi’s much promised ‘agriculture boost’ to India’s economy,” said Anil Kumar Mittal, managing director of basmati exporter KRBL Limited.

Said Yogendra Yadav, psephologist and founder of Swaraj Abhiyan: “Farmers are the biggest losers in the Modi regime. In the past four years, farmers across the country have first protested in their own areas, and then congregated on the streets of the capital to protest over months. There is no north-south or east-west divide in the distress faced by farmers.”

One of the bright spots in the government’s growth story is the infrastructure sector. The government’s Smart Cities programme and a hike in allotments made under the National Urban Renewal Mission have helped the cause. “The government’s focus on infrastructure is significant for the economy,” said Dharmakirti Joshi, chief economist, CRISIL. “It holds even greater importance at a time when private investment in infrastructure has taken a back step.”

However, Joshi said there was scope for improvement. “Overall, in the last four years, the pace of infrastructure development was only moderate,” he said.

No Modi story is complete without evaluating his foreign travels, which have been characterised by great energy. His swearing-in set the tone—it would be neighbourhood first. But, four years later, Modi seems to have not capitalised on the energy. Relations with Pakistan have soured. Modi tried and failed like many before him, so perhaps it would be unfair to blame only him. Importantly, his government has brought back Kashmir to the table, which previous regimes had avoided.

Pakistan aside, some secure relationships have somehow unravelled during Modi’s tenure. Nepal is a classic example. It has taken him three visits to Kathmandu, along with two visits by Foreign Minister Sushma Swaraj, to smooth ruffled feathers. The Maldives, which was a firm partner, has distanced itself from India. The reason seems to be a lack of reciprocity.

Modi, however, strengthened relations with West Asia. He became the first Indian prime minister to go to Palestine on an official visit, while the closet flirtation with Israel is now out in the open. He has also consorted with Saudi Arabia, and has tried to secure India’s energy future. This wooing of the Muslim world, contrary to his own domestic compulsions, has been successful.

In terms of economic diplomacy, his pet plank, Modi has not had a lot of success. Trade negotiations between India and the European Union have been stalled since 2013. And, there is no breakthrough in sight. “This government has not signed any major free trade agreement in the past three or four years,” said professor Gulshan Sachdeva, professor at the Centre for European studies at Jawaharlal Nehru University.

Notably, the trade deficit between India and China is $63 billion. And, despite the recent wooing in Wuhan, when Modi met Chinese President Xi Jinping, the balance scale is still tipped in China’s favour. In coming days, the biggest challenge for Modi will be how to deal with China. Wuhan might have calmed tempers, but it has failed to convince the defence establishment that China can be trusted. Especially at a time when the world is being polarised, with the west pitted against Russia. And, with an unpredictable US president, Modi would have to do a balancing act.

On the defence front, the Centre has paid a lot of attention to security, especially after the surgical strike in Pakistan-occupied Kashmir and the long standoff with China in Doklam. However, recently, Lieutenant General Sarath Chand, the vice chief of Army staff, told lawmakers that 68 per cent of the Army’s weaponry was dated, and only 8 per cent was state of the art.

When she took over as defence minister last September, Nirmala Sitharaman had said that her priority would be providing the best equipment to the military. But, five months later, when Finance Minister Arun Jaitley presented the budget, the defence sector got only a 7.8 per cent hike over the previous year.