Namonomics: Smiles And Frowns

Namonomics: Smiles And Frowns

PM Narendra Modi led NDA government completes a year. With it, the markets, the experts, the economists, the common men and not to forget opposition parties start to evaluate the accomplishments and failures recorded by BJP government in last 365 days. Let us become a part of the ongoing debate and analysis how things have changed, particularly in terms of economy.

Smiles

• Indian economy registered growth of nearly seven and a half percent in last financial year, which is much higher compared to earlier years. Also, probably India became the fastest growing economy in the world.

• Evaluating the current account deficit and fiscal deficit, it is evident that they all were contained extremely well. It indicates macro-economically India is doing well.

• At the reform front, various reforms have been implemented particularly in foreign direct investment, in insurance, defense in some construction sectors. It has become easier to conduct business.

• The experts say that it is the oil prices that helped Modi government. But one should not forget that it was NDA government that June 2014 announced the sale of five million tonne of wheat and rice each month into the open market to be done from the stock. The step helped to control wheat inflation and rice inflation considerably.

• One should not forget Jan Dhan Yojana and various follow-up programmes. Evolution is the key to success.

• Now India has a transformed foreign policy as it moves from non-alignment to multi-alignment. PM has given message that India is now prepared for business.

• At home, India is finally seeing a major change as it moves from crony capitalism to fair rule-based competition.

• The government decision to dismantle the Planning Commission and offer more financial power to states has been termed as a good one.

Frowns

• PM has underperformed on his promises as the double digit growth goal is getting distant. The hunt for investments and jobs is not moving fast despite favorable international conditions.

• The greatest criticism that is linked to ruling government is the tag of suited-booted sarkar as the policies are termed as anti-poor.

• The consumption is picking up but the broad investment cycle has yet not turned even when after substantial progress was recorded on macro front. It indicates that it is oil decline that resulted in positive macros.

• Jan Dhan Yojana is termed as good but major drawback linked to it is who will bear the cost? There is no transparency on the matter. If customer bears then it will be a problem as there are people with low levels of income. If it is banking then they are financed partly by private capital. And if it government, again it will result in subsidies and fiscal stress.

• Government withdrew proposal on shifting responsibility for managing government debt from Reserve Bank of India to independent agency.

• Government failed to privatize even one single inefficient PSU, which indicates more burden taxpayers.

Conclusion

Everyone is well aware with the fact that PM Narendra Modi won the elections with a clear mandate, and therefore people expectations are really high from ruling government. BJP started its term with the slogan of Minimum government and maximum governance. For some extent, the government has achieved it. However, if compared to people’s expectations it is lagging far behind. It is better to adopt a practical approach as change never happens in a day.