Good economics is good politics


Gopal Krishna Agrawal

Modi Government has been voted back to power with an unprecedented majority. Modiji is an undisputed leader of not only the BJP or the National Democratic Alliance (NDA) but of the whole country. It is also expected that sometime in 2020 the NDA will also have a majority in the Rajya Sabha as well, something which eluded it during its last term in the Government. This puts the incoming government in a very comfortable position to undertake many more reforms under the decisive leadership of Shri Narendra Modi.

The first term of Modi government was a success so far as macro-economic management was concerned. GDP growth was revived, inflation was tamed, fiscal deficit was controlled and the balance of payment crises was averted. The first term was about cleaning the system and putting things back on track. Looking at the macroeconomic parameters now, they all are in a very good shape. Inflation is under control at around 4.5%. GDP growth is on a higher growth path, and is about 7.5 %. Fiscal deficit at 3.5% is under control. Current account deficit is also healthy. Tax to GDP ratio at 12% has also improved.

Modiji worked hard for five years as prime minister on governance with dedication for ‘Sabka saath, sabka vikas’. If you look back, our government has implemented direct benefit transfers (DBT), improved access to energy, healthcare, affordable homes, toilets, and other infrastructure. There is enhancement in the public spending in the rural areas. The Government has declared 115 district as aspirational district and identified 65000 villages as backward area and working on a push model whereas the district collectors have been made responsible for the delivery of seven major government schemes, like Ujjwala, Ujala, Mudra, Ayushman Bharat, Pradhan Mantri Awas Yojna et al to every eligible beneficiaries in the respective areas.

‘Benefit to the last person’ ‘Antyodaya’ is our ideology from the start of the Jan Sangh days. Our financial inclusion program has been very much appreciated by The World Bank. At the end of first term, Modi government had reached out to more than 220 million poor households cutting across all social segments. This outreach has created a new constituency for BJP above all caste and religion. Party President Amit Shah’s focused and special campaign to connect to these millions of beneficiaries has yielded desired results.

India’s aspirational middle class is rising again, looking for opportunities and ease of living. This middle-income group will be driving consumption demand and set up businesses. We proudly remember that in the past 2000 years, India and China together occupied almost 60% of the global trade.

Our focus on the missing link of the manufacturing sector and MSME sector in particular achieving 77th rank on Ease Of Doing Business (EODB) are bearing good result. Government has E-assessment, helping in removing widespread corruption in the direct tax structure. It will smoothen the process and remove subjectivity. The focus of all the steps is to lower the effective rate for the taxpayers.

Implementation of GST has been a big reform. It does away with the multiplicity of tax structures, subsuming central, state and local taxes, it results in a reduction of indirect taxes for the consumer, it creates ease of doing business by online registration, filling of returns and assesment and creating one tax one market. For the consumer, it reduces prices of manufactured goods, for the Government it means increased tax collection and fiscal consolidation and creation of a much simpler system to administer through GSTN network. Small Businesses with aggregate annual turnover up to Rs 40 lakhs are exempt from GST. And those having annual turnover up to Rs 1.5 crore can avail the benefit of composite scheme by paying 1 percent tax and get out of GST formalities.

Over the last 5 years our government has focused on institutional mechanism to resolve problems. Reforms like IBC, NCLT and other legal changes have been implemented. Many of the large companies facing bankruptcy and NPA problems are now being resolved. The Modiji is also working on projects revival under the ‘Pragati’ initiative.

Land and labour, being important for the industrialization of the country, the Centre is pushing for digitisation of land records and land lease agreement; it is helping in establishing ownership of land. On the labour front there has been efforts on the formalisation of labour. 93% of our labour force is in informal sector. The working conditions in this sector are very poor. Government through introduction of Universal Account No (UAN) and reforms in Industrial Acts has implemented Provident Fund (PF), ESI, job security, social security etc. into this segment.
Our Agricultural policies were being formulated with objective of doubling of farmer’s income. MSP has been increased to 150 percent of the cost of production. Farmers are getting insurance cover through Pradhan Mantri Fasal Bima Yojna. Our commodity import export policy is more aligned to ensure that the farmers get better price for his produce. Government has several other initiatives lined up.
We have a clear-cut road map for 5 trillion economy by the year 2024. We are determined to make India, an economic superpower. The decisive leadership of Shri Narendra Modi has ensured that all the required steps and decisions are taken promptly.

Without resorting to populist spending, Government understands the sanctity of Tax Payer’s money. Giving out doles, with this money will be inflationary. Our focus has always been on increasing the efficiency of government expenditure. Better targeting on our social welfare schemes, we did not announce farm loan waiver in our manifesto; and still won with such a huge majority!

In economic terms we are in a very good situation of low inflation with high growth rate. We believe that good economics is good politics.

(The writer is BJP National Spokeperson for Economic Issue)