Categories: Panorama

A second term for Modi?

Rajeev Mantri

 

Of all the governance breakthroughs achieved by the Modi government, its record in improving welfare delivery has been discussed widely. Under the NDA government’s direct benefit transfer initiative which was launched after Modi entered office, `3 trillion in welfare has been disbursed to over 50 crore identified beneficiaries in the 2018 to 2019 financial year, according to government data. Since the programme’s inception on January 1, 2013, `6.77 trillion has been released directly to beneficiaries.

In addition to the measurable outcomes, DBT has eliminated pilferage. Over four crore fake or duplicate welfare beneficiaries and `2.82 crore (food and public distribution accounts) have been weeded out. This rationalisation and clean up across the welfare categories has cumulatively delivered savings of `1.2 trillion since 2013-2014. The efficiency in welfare delivery makes life easier for the beneficiaries. The Modi government’s economic strategy has enabled formalisation and financialisation on a scale we have never seen before. The rocket fuel that is powering these two changes is digital technology. Most analysts have a narrow focus on one of these policies and are unable to see the results of the holistic strategy.

The shift to GST has driven smaller firms to get registered. In March over 10.3 million businesses were registered under GST. Of these, 6.4 million migrated from the old tax regime and 3.9 million were new registrants. Instead of operating in cash, small businesses are now in the tax net. This is good for both government revenue and businesses because those businesses can now access low-cost formal credit by virtue of keeping records, tracking cash flows and being in the organised economy. Perhaps for the first time in India’s history, it is possible for small borrowers to access credit based on their cash flows rather than by putting up collateral.

Demonetisation ranks among the most polarising policy decisions made by any government. The unprecedented act of withdrawing nearly 90 per cent of currency by value is a policy that straitjacketed members of the academia and think tanks would never even contemplate, let alone recommend. The fact is demonetisation brought a behavioural change in India.

India’s aggregate savings is moving to financial assets from physical assets. Digitisation removes friction and has slashed identification costs, enabling a record number of retail investors to become stock market investors. This has the benefit of making ordinary Indians stakeholders in wealth creation, as well as reducing dependence on foreign institutional investment. These policy changes will bring a higher sustainable growth rate and a fiscal boom like India has never seen before. The next government will have the opportunity to shape the priorities and areas that receive capital from the public exchequer. In 2004, the NDA government had left a similarly robust economy, but the boom in tax revenues and the fruits of the NDA government’s intense reform efforts were frittered away by the UPA government. As India chooses its capital allocator for the next five years, voters should choose wisely: Modi has demonstrated the ability to take calculated risks and drive policy changes, and deserves a second term.

(HT Media)

nt

Comments are closed.

Recent Posts

  • Goa News

Cabral outlines roadmap to end power woes

NT NETWORK Panaji Power Minister Nilesh Cabral on Monday released a white paper on the status of power situation in…

4 hours ago
  • Goa News

Trouble mounts for Sonsoddo dump

NT NETWORK Margao    The Fomento  Green, which has been operating the  waste treatment plant at the Sonsoddo dump, on Monday…

4 hours ago
  • Goa News

Two armed cops to be posted at GMC’s casualty ward

NT NETWORK Panaji The Indian Medical Association’s Goa branch on Monday said  that  Chief Minister Pramod Sawant has assured  deployment…

4 hours ago
  • Goa News

QCI’s fish testing raises eyebrows

NT NETWORK Panaji The Quality Council of India has begun testing  fish samples lifted from the trucks arriving at state…

4 hours ago
  • National News

Patients suffer as doctors go on strike across India

PTI New Delhi Healthcare services were severely affected across the country on Monday as doctors wearing helmets and forming human…

4 hours ago
  • Goa News

CoP says Sagarmala projects must be passenger-centric

NT NETWORK Panaji The Captain of Ports has made it clear that various projects to be undertaken under the Sagarmala…

4 hours ago