Dr. Md. Shairul Mashreque :
The results were declared on 16 May, fifteen days before the 15th Lok Sabha completed its constitutional mandate on 31 May 2014. ‘The counting exercise was held at 989 counting centres. The National Democratic Alliance, led by the Bharatiya Janata Party, won a sweeping victory, taking 336 seats. The BJP itself won 282 seats, the first time since Rajiv Gandhi’s landslide victory in 1984 that an Indian party has won enough seats to govern without the support of other parties. The United Progressive Alliance, led by the Indian National Congress, won 59 seats, 44 of which were won by the Congress. BJP leader Narendra Modi was thus poised to take office at the helm of the largest majority government since 1984. It was also the second-worst defeat of a sitting government in independent India.’
It does appear that Modi has made a history by assuming the office of the Prime minister (PM) for the first time It was a remarkable political elevation (from chief minister to prime minister by winning almost a record number of Loksava seats. No one other than him made such record.It was really a great turnaround for him
Some media campaign highlighted ‘India’s slowing economy amidst a record high current account deficit and a falling rupee in summer 2013. There was a striking reference to a lack of infrastructure investment and a government increasingly likely to give subsidies the national finances cannot afford just before the election. Other points media campaign mentioned were stagnant policymaking and an inefficient bureaucracy. The economy was the main issue in the campaign. Modi brought up the issue of farmer suicides that resulted from high debt and poor yield on their crops. Former Finance Minister Yashwant Sinha criticised the incumbent Chidambaram in saying that he had a “habit that he will get a strong economy, and he will ruin it before he leaves… Shri Chidambaram will be remembered in history as a spoiler, as someone who specialises in sub-five per cent growth rate, for his hubris, arrogance”. The campaign indicated that ‘ the price of onions, a staple in Indian cuisine, faced a dramatic increase. In the lead up to the election, consumer price inflation increased more than expected while, paradoxically, industrial production fell by more than expected causing a dilemma amid slowing growth. The price of salt was also indicative of general food inflation. Other issues highlighted included Telenguna in Andhra pradesh, decreasing economic growth and staggering food crisis and poverty.
The challenges ahead of Narendra Modi indicate that he will have to go through fire and water. Already he was caught up by dilemma. One challenge was to appease downtrodden masses all with his master mind. He seemed to be circumspect taking lessons from the policy failure of his predecessors.
Immediately after assuming the office of the Prime Minister Modi announced his 11-point agenda of action (Times of India). The main measures to face the challenges include among others investment on agriculture, transport, employment, energy, infrastructure, tourism, internal security, revitalizing SAARC building special relation with China, Japan, Russia and neighboring countries.
Recent reports point to the fact that Modi has become out of his wit finding it hard to cope with increasing trend in mass frustration. The beginning does not seem to be a happy one. According to latest reports :The challenges facing the Modi government are largely defined by the legacy of the UPA rule. The prime object of the new government should be to take the economy back to the high growth (8 percent plus) trajectory at the earliest. This calls for a slew of carefully considered measures, administrative as well as legislative. A major legacy left by the UPA is the raft of rights-based legislation, notably right to work and right to food. The land acquisition law gives a better deal for the landowners, but correspondingly makes it harder and costlier for industries to acquire land.
These supposed welfare measures may not have saved the day for UPA, but remain as statutes on the book, which the new government will have to deal with.
Even if the BJP reconciles itself to such measures in ideological terms, it needs to undertake a critical evaluation of the various schemes so as not to fall in the same rut as the previous government. More than Rs.2 trillion were spent on rural employment by the UPA during its tenure, but there is little to show in terms of physical assets like check dams, roads and levelled fields. Apart from large-scale leakages, payments under the scheme are mostly viewed as entitlements rather than wages for productive work. A collateral damage is the serious impairment of the work ethos among large sections of rural labour which can have an adverse effect on farm output if left unchecked.
In fact his main area of concern is shattered economy that he inherited. Price index remains extremely high far beyond the reach of the commoners. Poverty is rising with increasing pauperization of the poor. Growth rate is not rising to the level of expectation.
‘Contrary to popular perception, barring retail, the BJP welcomes FDI in almost all other sectors (even up to 100 percent in certain cases), especially where it brings in new technology or innovation. Whether it is FDI or investment from domestic industry, it is the “ease of doing business” that matters most. Inordinate delays in project approvals and numerous hurdles at various stages of implementation can sap the energy of even the most enthusiastic and committed investors. Ensuring time-bound approvals and implementation of projects holds the key to spurring investment and growth.’
If there is one measure that will have a significant impact on easing of supply constraints, it will be to scrap state monopoly on coal mining and permit merchant mining, with allocation of coal blocks through auction. Rolling out the much delayed Goods and Services Tax (GST), for which the necessary spade work has been done, will send out a positive signal and aid growth. It is also necessary to bring about an investor-friendly tax regime.
Reining the fiscal deficit is a prerequisite for ensuring sustainability of growth. Any laxity on this front will not only lead to crowding out of private investment but also severely limit policy options of the Reserve Bank of India in combating inflation. One factor that merits close attention in this context is the subsidy burden. Doing away with diesel subsidy should not be a problem now. However, scrapping fertiliser subsidy will be a challenge for which the requisite political courage needs to be mustered. Notwithstanding the BJP’s reservations on “Aadhar” (unique identification scheme), serious thought should be given to direct cash transfers to targeted beneficiaries, which will go a long way in checking leakages.
As a matter of fact Modi has been caught up by a recalcitrant challenge facing the music. . He is sitting on the horns of dilemma. Tremendous price hike in kitchen market is alarming. Inflation was high.
(Dr. Md. Shairul Mashreque, Professor, Department of Public Administration, Chittagong University)
