Modi considering Farm Loan Waiver Scheme

by Harish Gupta, National Editor, Lokmat Group

Modi considering Farm Loan Waiver Scheme

Rs 2 lakh crore bonanza on cards to farmers, weavers, artisans, middle class

Interim budget will be full of free-bees

Harish Gupta

New Delhi, Dec 20

After debunking the farm loan waivers by the Congress governments at the Centre and states, Prime Minister Narendra Modi is seriously toying with the idea of giving massive sops to the farm sector including a loan waiver scheme.

The PMO is of the considered view that loan waiver schemes had helped the parties winning the elections. It was tried by the VP Singh-Devi Lal combine during the 1989 Lok Sabha poll campaign and helped immensely. The final cost to the Central Exchequer in 1990 was Rs 10,000 crores. In 2008, the Manmohan Singh government waived the loans for farmers to the tune of Rs 52260 crores and returned to power.

Highly placed sources in the PMO say that data is being collected on a war-footing basis to identify the number of farmers in each state who will require National Loan Waiver benefits. The loan waivers worth more than Rs 2 lakh crores crores to send a strong signal to the farming community that the Modi government is serious about their well being and taking them out of the distress.

The government has already asked the RBI interim dividend and may also seek extra money within the next one and a half months. A high powered committee will be constituted shortly to lay down guidelines as to how much money RBI will need in its reserve. This committee will be asked to submit its report within 20 days and pave the way for massive transfer of funds from RBI to the government.

Though the BJP leadership has not undertaken a detailed review of the recent losses in the state assembly polls (or not shared reasons of its defeat with the media), it is under pressure to give doles to the various sectors before the Lok Sabha polls are announced in February-end March-first week.

It has been decided that loans will be waived for the weavers community and artisans which are mostly in UP. Similarly, the middle-class will be given some tax rebates. The PM has already announced massive GST relief brining tax regime from 28% to 18%. This will hit the government by another Rs 20000 crores a year. This loss can be off-set if the buoyancy in the economy comes soon.

Those facing GST penalties and other problems may also be given one time amnesty so that they can get rid of harassment.

In order to garner support from the 263 million farmers and their many millions dependents, the Modi government would move towards waiving loans to create a positive climate.

The party leadership feels that Modi's personal graph has not been dented even after the loss of power in three Hindi speaking states. Therefore, immediate relief measures even if they are to the tune of Rs 2 lakh crores or above, could turn the tables nationally in favour of BJP for the Lok Sabha polls.

Insiders say nothing less than the massive doze of concessions to all the sections including the MSMEs, GST, Farmers, weavers & Middle-class will work in favour of Modi.

Economists including NITI Aayog have already cautioned that farm loans waivers would widen a fiscal deficit which has been capped at 3.3 per cent of its gross domestic product (GDP), or Rs 6.24 lakh crore.

Ends 

"A" in politics but low in Economics

by Harish Gupta, National Editor, Lokmat Group

In democracy, completion of three years in power is a time for perturbation as that’s when the curse of “anti-incumbency” sets in.

Prime Minister Narendra Modi is an exception. Into his fourth year in power, there is hardly any popular disgruntlement against his incumbency. It was evident in the assembly election in Uttar Pradesh last March when the BJP under Modi and party president Amit Shah succeeded in pulverising the ruling Samajwadi Party much to the same extent to which the saffron party had steamrolled its rivals in the mega-state in the 2014 general elections.

By now, BJP is armed with an election machinery which is unparalleled. Its leadership’s ardour to win every poll is legendary. And for the party, the importance of the year 2019, when Modi’s second innings in power is expected to begin, is underlined. At least this is the impression one gets after talking to a number of Opposition leaders. Bihar Chief Minister Nitish Kumar’s statement that he is not in the race for the Prime Minister’s post and veteran politician Sharad Pawar is not ready to play ball with the Congress clearly give the impression that they are unwilling to fight with Modi.  

It is obvious that BJP is shining in the absence of competition. Congress president Sonia Gandhi, Trinamool chief Mamata Banerjee, CPI(M)’s Sitaram Yechuri—all of them seem trapped in a single strategic silo to combat Modi, which is to “unite” the opposition. The Presidential poll, due in July, can be the first test of unity. But that’s most likely to be fighting a losing battle, as there are unbridgeable fissures in the opposition—Mamata Vs CPM, AAP’s Kejriwal Vs Congress, Samajwadi Party Vs BSP’s Mayawati. Beside, Modi’s inclusive style of campaigning has gravely challenged the traditional parties’ vote-banks. Mayawati’s Jatav, Mulayam Singh Yadav’s once famous Muslim (M)-Yadav (Y) amalgam, Delhi’s Bihari immigrant voters loyal to AAP—recent elections show that the lure of Modi’s “mitron” call brought about seemingly irreparable cracks in these traditional alliances.

Besides, the opposition is bereft of tall leaders. Unlike its UPA predecessor, the Modi administration is not protective about politicians involved in graft cases. Instead, its in-the-face attitude has dragooned most opposition stalwarts in cases from which escape is not guaranteed. Like Laloo and his family members in money-laundering charges; Congress former Home and Finance Minister P. Chidambaram and his son, Karti, in the allegation of siphoning off huge amounts to acquire, among other things, large property in Britain; most of Mamata’s ministers and party leaders waiting to be picked up by CBI on the charge of accepting bribe as shown in the ‘Narada’ sting operation. In the National Herald illegal share-transfer case, the noose may also tighten on Sonia Gandhi and her son, Rahul, the Congress vice-president.

The opposition calls it “witch hunt” but its voice is feeble, with the media prone to self-censorship, and the government, armed with summary provision under Sec 124A of the IPC, being empowered to swoop down on its critics in the social media on the charge of being ‘seditious’. Besides, hit by a blizzard of serious corruption charges, the opposition seems to have lost its moral heft to stand up and question the government. It is more serious than comparable global developments, like near-evaporation of the Labour Party in UK, or the US Democratic Party being in eclipse. Unlike these mature democracies, the Indian opposition parties are personality-based and not much remains of them when the central towering figure collapses.

Though Modi’s political victory so far is undeniable, there are signs of weariness in governance and vision. In 2014, he promised: “I will make such a wonderful India that all Americans will stand in line to get a visa for India”. Unfortunately, things have moved in a different direction. Somewhat embarrassingly, the government Central Statistics Office’s (CSO) figures of national income refuse to tally with estimates of industrial production. In the quarter covering demonetisation of large notes last November, the index of industrial production was flat but national income grew at 7%, like in magic. With large malls lying near-empty, or being converted to office space, a shortfall in demand is self-evident.

Behind decline in demand is the stark reality of job opportunities shrinking. It is not merely due to Donald Trump’s visa policy, or problems in the IT sector due to shifts in technology (entry of robots in workplaces, for example). There are other reasons too, such as:

·      India has 10 million new workers to the workforce annually, but available non-agricultural jobs are less than 5 per cent;

·      Poor education system has rendered most Indians unemployable, including 90 % of the 10 lakh engineers passing out every year;

·      China became the world’s factory in the 1980’s. Now protectionism rules the roost, with global trade remaining subdued at 2.7% in volume terms. India may not be able to do the China act.

·      CRISIL estimates 12 million people will join agricultural workforce between 2011-12 and 2018-19. But agri workers’ number is declining very fast. So the country cannot move up the value chain to become a modern nation.

·      Agriculture, construction, manufacturing—sectors that employ people are lagging GDP growth. Though agriculture production has shown improvement. But its after two years’ of consecutive drought. What have outpaced GDP growth are financial services, real estate, public administration, and trade, hotels and restaurants. Except the last, all other growing sectors have little job potential. The country is indeed experiencing jobless growth. In the proposed GST regime, the last two have been hit hard.

From the rough and tumble of electoral politics, can Modi take a creative leap to make India a hub of innovation and growth? In the next two years, he must prove he can think big on governance. Or else the queues in India for American visa will continue to be longer than the other way round.

Aadhar: The fear psychosis

by Harish Gupta, National Editor, Lokmat Group

The current brouhaha in the parliament, the media and the court over Aadhar, India’s unique identification card for citizens is typical of a nation witnessing a regime change, and its accompanying about-face on policy. It was the previous Congress-led UPA regime, harassed as it was by mounting subsidies and their rampant misuse through corruption, commissioned the services of IT wizard Nandan Nilekani to set up Unique Identification Authority of India (UIDAI). Insiders say it was Dr Manmohan Singh who came up with the idea and the government authority was created to administer the nation-wide 12-digit Aadhar card. The number touched 50 crores mark when UPA demitted office and shot up to 1.12 billion already. But always wary of upsetting the UPA vote bank—be they PDS cheats and assorted rent seekers—UPA chairperson Sonia Gandhi and the cabal around her put roadblocks on its use in one form or the other. The Aadhar actually remained a number, nothing else. The NDA, on the other hand, is keen to use the Aadhar platform for not only incidental operations like distribution of subsidised LPG cylinders but to replace the entire creaking PDS with a Direct Benefit Transfer (DBT) architecture that may include issuing of Food Stamps.

But a countrywide identification system has its downside. If put in the hands of a draconian regime, its most fearsome use may be as an instrument of mass surveillance, much as the Nazis reportedly used an IBM machine way back in the 1933 census to identify the Jews in Germany. But, food and petroleum subsidy alone costing Rs 240,000 crore in 2016-17, and over 40 per cent of grains and sugar distributed across the Fair Price Shops either rotting in transit or getting pilfered, the gain from Aadhar far outweighs its imagined cost and fears. And the ‘cost’ is being cynically exaggerated by a section of leftist intellectuals in the former National Advisory Council (NAC) of UPA; it was popularly known as Sonia Gandhi’s ‘kitchen cabinet’. Jean Drěze, its economist ex-member, is particularly vocal against the NDA government’s plans with Aadhar. He is campaigning that the Aadhar Bill now passed in the Lok Sabha as a Money Bill (so bypassing the Upper House where the BJP is not in majority), is being built “as an infrastructure of social control”.

Last week, after the Lok Sabha cleared the Aadhar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Bill, 2016, Finance Minister Arun Jaitley reminded the House that it was the “culmination of seven years of discussion” over the Bill. It was a confession of sorts of the stiff resistance that the BJP gave to the passage of some features of the law when the latter was in the opposition. But Jaitley was unambiguous in its purpose. He said “it will empower the state to distribute resources to the deserving people and save the resources that undeserving people get”. It is obvious that the economy, plagued by tepid tax revenues and soaring costs of government wages and defence expenditure, is desperate to curb the pressure of subsidies on both economic and social services. Even after setting aside the ‘merit’ subsidies (i.e., the essential subsidies in primary education, health, sanitation and sewage, mid-day meal, etc.), the non-merit (or inessential state spend on the undeserving) subsidy works out to a hefty one-tenth of the GDP. It is anything but sustainable. And the intention to curtail it signifies the political shift from the left to the right that marks the 2014 regime change.

Before the bill’s passage in the Lower House, it went through the Upper House with a slew of amendments, all moved by Congress lawmaker Jairam Ramesh. His amendments sought to prevent disclosure of “biometric or demographic information” in the interest of “national security”. It was proposed that the clause be substituted instead by “public emergency” or “public safety”. There were a few other amendments that were all swept aside in the Lok Sabha, where Jaitley’s ‘money bill’ made short shrift of Ramesh’s suggestions, one of which was against the use of Aadhar number for any purpose not mentioned in the Bill (such as for filing of Income-Tax return).

However, a good question to ask Ramesh could be: why is he nettled by the term “national security”? It is evident that a fear is stalking the opposition benches that the Aadhar Bill, after it becomes a law, may be used by the government to throw open the dossier on every dissenter and everyone who refuses to toe the line, and get its finger on his location, correspondence history, tax details or personal life. In a world which is digitally vibrant, the twelve digits on the Aadhar card are like a screen to the secret police to every secret in one’s life. In South Africa under the apartheid regime, the 1950 population registration data was used to assign in the 13-digit national identification number, the penultimate (12th) digit, telling if its holder is ‘black’ or not. There is no doubt, therefore, that Aadhar can turn out to be a weapon in the hands of the government of the day fighting war on many fronts. Surely, individuals, groups, communities etc indulging in anti-social, anti-national activities may have a reason to be worried too. For students of recent history, the anti-Sikh massacre after the assassination of Indira Gandhi on 31 October 1984 may be a haunting issue in this respect. The Nanavati Commission report cites a glaring succession of the lynch mobs identifying Sikh households in Delhi with unerring precision within 24 hours of the former Prime Minister’s assassination by her Sikh bodyguards. Therefore, when a conspiracy drives mobs, it is not essential for them to act on a public identification network. There was no Aadhar then.

What is more relevant is the fact that the world has changed, and so has technology; and claiming privacy to be a “fundamental right” may be legally debatable but technologically laughable. Assuming that Big Brother is watching one’s movements, it makes sense giving everyone a number rather than making his wheat, or rice, get gobbled up by someone else.

India 2019, via Lucknow

by Harish Gupta, National Editor, Lokmat Group

For Narendra Modi, who stormed the Lok Sabha in 2014 with more than half the seats for his BJP, the ongoing state assembly elections--particularly that in the most populous state of Uttar Pradesh--have come as a mid-term confirmation of his popular acceptance. His leadership style, however muscular, is fraught with controversy. His individual popularity may still be very high but what has dented is the general belief is his ability to be the harbinger of change in India's growth story. With economic growth stagnating and the social indices none too peppy either, it is not only that Modi's 2014 promise of 'achhe din' has become a popular joke. More significantly, doubts are being cast on his horse sense to choose the right administrative tool or select the right personnel in taking course-changing decisions. Recent scrapping of 1,000 and 500-rupee currency notes is an example. Its supposedly positive effect not clear to anyone so far, though Modi bragged at a recent poll rally that he took the great risk knowing fully well the consequences. But  the fact is that it has destroyed income streams of the poor, at least for first two quarters, if not for a whole year. The government has itself acknowledged its negative impact on GDP and the global community of economists and economic journals have expressed their strong disapproval. The latest is a thumbs-down by Financial Times’s Martin Wolf who called demonetization a “brutal tool” and said it got him “puzzled”. It’s a different matter that some in the government feel that Wolf has praised the step.

The decision, like many of Modi’s perplexing moves, may have explanations that he alone knows. But opposition parties argue that these are typical of a person who doesn’t to saner voices. Modi reads in every small election result a popular endorsement of his actions, like BJP claimed that its impressive tallies in the recent civic elections across Maharashtra denoted popular support of demonetization. The claim is obviously fanciful because the Congress collapsed in Maharashtra long ago and NCP became Modi’s pillion rider.  However, the election in Uttar Pradesh, a state the size of France and comprising a sixth of India’s population, offers large enough a sample to test the mood of the nation as far as the Prime Minister is concerned.

Besides, Uttar Pradesh is Modi’s electoral laboratory. Being Hindi-speaking, it offers an audience that best captures the nuances of his speeches. The state is a cauldron of the politics of communal polarization which is the trademark of BJP. It is now ruled by Samajwadi Party, a group known for its close nexus with the minority community. SP is now in electoral alliance with the Congress, which is Modi’s arch rival (despite Congress’ dwindling strength). It is true that BJP swept 73 of the state’s 80 Lok Sabha seats in 2014, but that election was about who’d rule India, Modi or the Congress. In the 2012 assembly election, the contest was about whether Akhilesh Yadav, the young son of SP founder Mulayam Singh Yadav, should lead the state government against “corrupt” Behanji. BJP fared miserably in that election.

As the present election results get announced on March 11, fingers are tightly crossed in both Modi and SP-Congress camps. It’s an intense poker game in which all bets are placed development. SP’s track record is somewhat deceptive as all development efforts seem to have focused on Akhilesh’s showcase project, the Lucknow-Agra Expressway, whereas the state is a goner on three counts: law and order, infrastructure and power. Expectations from Akhilesh are still high because, emerging as victor from a contest with his father and his cohorts, the Chief Minister’s campaign carries the implicit subtext. The subtext is that he has been ‘unshackled’ from his seniors’ spell and, if returned to power, would ‘modernize’ the state. But voters in general are skeptical and they understand how little a chief minister can perform without the Centre’s friendly pat and helping hand. And that’s where BJP’s hope lies in Uttar Pradesh.

For Modi, however, the road to Lucknow constitutes the first leg of his march for a second term in 2019. He tasted big-time assembly defeats earlier, in Bihar and Delhi, and the chances of BJP-Akali alliance  in Punjab are doomed. Even in Goa, Uttrakhand and Manipur, none is sure of BJP win. But Uttar Pradesh is a different kettle of fish. It is vast and complex; it is a mini-India in many respects. Modi’s victory in Uttar Pradesh will not only cramp the style of his rivals, who are used to blocking every move by him at the upper House, but recharge him with the courage to take unconventional steps in fixing some of India’s endemic problems. These problems, which are economic, political and diplomatic, are big and had been pushed under the carpet for too long. His war against corruption may be aimed at opening the Janampatris (horoscope) of his political rivals. But he believes that if corruption is curtailed, it will help improving the GDP growth. The Note ban move will fill government coffers and fear factor will force people to pay taxes.  

The most urgent economic problem is to find a solution to possible unemployment of highly educated Indians due to expected changes in the US visa regime as well as rise of big data analytics and Artificial Intelligence. The answer is to upgrade use of IT in India so that engineers returning from the US can lend their hand in a spectacular rise in productivity at home. But it calls for bipartisan efforts to make the necessary changes in labour and other laws. Politically, the biggest reform will come with simultaneous holding of parliamentary and assembly elections. It is a reform to which the BJP is committed but lacked the nerve. On the diplomatic front, Modi, like Atal Bihari Vajpayee before him, can leave his mark as the architect of a permanent solution to the Kashmir problem. At any rate, it requires Modi’s unquestioned authority to mould India’s foreign relations freely to suit the extremely volatile diplomatic atmosphere.

In other words, Modi needs authority to stand up to the next general elections. A victory in Uttar Pradesh may revitalize his authority. He must reach Lucknow if he can hope to return to Delhi.  

It's Modi Vs Gandhis, let India wait

by Harish Gupta, National Editor, Lokmat Group

As a joke, it is clever but contrived. As a jibe in parliament, it is rank graceless. Prime Minister Narendra Modi’s latest remark in the Rajya Sabha about his predecessor Dr. Manmomohan Singh—only Doctor saab knows the art of bathing wearing a raincoat in the bathroom—looks like having put paid to the budget session when it resumes on March 9 after a month-long adjournment. The Congress, which is Lilliputian in the Lok Sabha but ‘big brother’ in the Upper House, has threatened to keep out of the rest of the session if Modi doesn’t apologize. And that’s asking for the moon unless the stand is changed after March 11.

However, beyond the frightening display of “indigestion”  at the highest level of India’s political life, the incident also highlights just what CPI(M) party chief and Rajya Sabha member Sitaram Yechury  remarked, that it is not a reply (to President’s address) but an election speech. For that matter, on demonetisation, none from the treasury benches, including the Prime Minister, ventured to respond to the fact of the GDP dropping a full percentage point post-note ban. During the winter session, it was Dr Singh who had got Modi’s goatby forecasting that GDP would be dented by a percentage point, and even upped the ante, in an uncharacteristic way, by calling demonetisation as “organized loot” and “legalized plunder”. Dr Manmohan Singh’s sharp attack on the Modi government surprised all because he rarely spoke in such strong words before, even when Rahul Gandhi tore his Ordinance in full public view. Modi who was sitting in the Rajya Sabha then, kept his cool and waited for an opportune time to strike back. And when he did, all hell broke.

Congress’ leaders did their best to counter Modi’s offensive, but it was not enough. BJP president Amit Shah promptly sprinkled salt on the wound by reminding Congress vice president Rahul Gandhi about his mother Sonia Gandhi’s famous invective at Modi during the days when he was chief minister of riot-hit Gujarat, that he’s maut ka saudagar (merchant of death). Shah did a bit more chest-thumping as he claimed that BJP has given a prime minister who “speaks” and before him “there was one whose voice could be heard only by you and your mother”.

It is evident that if the existing ill will between BJP and Congress continues—and there is not a snowball’s chance in hell that it will go anytime soon—there will hardly be any significant legislative action in the present Lok Sabha. Modi’s ‘raincoat’ jibe was undoubtedly unbecoming of him, but so was Manmohan Singh’s “organised loot” and “plunder”, words that the Prime Minister said Singh had been “made to utter” (implying off-stage prompting by the Congress president). Looking backward, it is obvious that what was mere obstructionism by BJP during UPA 1 (2004-09) turned into splenetic outbursts in the UPA 2 (2009-14) period, when the opposition led by BJP blocked every legislative move by the UPA. Political analysts gave it a sober name, ‘policy paralysis’, but it was actually a series of outbursts against the Congress’ dynastic leaders.

Now the table has turned, and it is ‘Modi V. Dynasty’. At an election rally in Haridwar last week, Modi was at the height of vexation with the Congress’ top leadership. “I tell the Congress leaders: hold your tongue, else I have your detailed horoscope. I do not want to desert dignity and reason, but if your desert dignity and reason and speak nonsense, your history will always chase you”. It can well be empty bluster; but who knows if it has ammunition?

Beyond the clash of ego, however, there is a looming threat that the medium to long term effects of demonetisation by the Modi administration may put India on an unexpectedly slippery slope of economic slow growth against strong global headwinds. IMF has trimmed India’s growth forecast for current (2016-17) and next fiscal by one percentage point (giving some credence to Manmohan Singh’s forecast though he said there will be two per cent fall ) and 0.4 percentage point, respectively, primarily to choking of consumption due to cash shortage and payment disruptions across the economy. But the same IMF, in its World Economic Outlook (WEO) update, has upped China’s growth estimate for 2016-17 from 6.5 per cent to 6.7 per cent. China is an aging country with a per capita GDP over five times that of India. It will be difficult, if not impossible, for India to catch up with economies that have raced ahead if it has no national strategy to put its youthful population to productive use. But, going by the Modi-Gandhi feud, national consensus on any issue is unlikely.

It is even more unfortunate that India’s electoral politics does not hold out any prospect for political unanimity on national cause. It is because over time, particularly in the present decade, the two warring parties, BJP and Congress, are increasingly becoming driven by personalities. Modi and the Gandhis, to be precise. If there are others, they’re bit players. Or like new organs growing from original stem cells, like Sasikala has grown out of the late Jayalalithaa of Tamil Nadu. The party system is under pressure, not merely in India but all over. The Grand Old Party of America, the Republican Party, has been totally eclipsed by Trump, who is anything but a republican, be it a small ‘r’ or capital. The British Labour Party is on stretcher and the Conservative Party died with Brexit. In India, the Congress resembled a party in the classical sense so long as it had a full-scale party as its main adversary, the BJP. But the fig-leaf is gone. And a couple of battling individuals have taken the charge to define the destiny of the world’s largest democracy!

Come back oh, charkha

by Harish Gupta, National Editor, Lokmat Group

If you are running marathon but joined the race an hour or so late, it is likely that you will reach the final post 26 miles away some time. But the competition will certainly close before that. A similar fallacy is staring India. When government"s financial data were released last week, and it was found that the Gross Domestic Product (GDP) had grown 7.1 per cent in the April-June quarter, against 7.9 per cent in the last quarter of the previous fiscal, there was dismay and consternation all around.

Swamy ke peeche kaun hai?

by Harish Gupta, National Editor, Lokmat Group

The name may be Bond, James Bond, but there is always an 'M' in distant London, the super-boss of the MI6, who dictates each of his moves like a puppeteer to the puppet.

ACHHE DIN NOT TOO FAR

by Harish Gupta, National Editor, Lokmat Group

In May 2014, Narendra Modi, on assuming power as India's Prime Minister, seemed an epitome of strength in stark contrast to UPA in its last leg. But it took only a few months to find the Modi administration's Achilles Heel—its deficit in numbers in the 245-member Rajya Sabha. Pitted against an opposition determined to crush Modi's reputation as a human dynamo, if not his credibility, the government had to sit out as scores of its bills got stalled in the upper house. The government was crippled and the opposition thought it had won.

 However, the Congress' fencing in the Rajya Sabha is showing gaps that may soon be wide enough for Modi to ride through. Come August 1, when biennial elections fall due to 56 seats across 15 states, and seven more nominated members are replaced by 'eminent' personalities chosen by the present dispensation, the NDA/UPA difference will be greatly neutralised. But the real change lies in the growing pull of BJP among large regional players, like TMC in West Bengal, BJD in Odisha and, significantly, both SP and BSP in Uttar Pradesh.

But the number game in Rajya Sabha has only begun. In Andhra Pradesh, one has to watch if TDP gifts an assured seat to BJP minister Nirmala Sitaraman or INLD offers an olive branch in Haryana. And how many seats are gained by BJP's 'frenemies', like SP, YSR Congress and TRS is yet to be seen. And AIADMK, always a supporter of Modi except on the GST Bill, may get even closer to him if it is returned to power in the state for another term. No doubt it is Modi's skill as a player on India's vast political chequerboard that has begun to reap dividends. 

But he is lucky not only on the political front. The met department's forecast of 106 per cent of July-September "long period average" rainfall, after two years of below-average showers, has given a boost to demand which is so overwhelming that it kicked off a week-long stock market rally. Perhaps, rain Gods are also smiling at Modi after two years of drought. The Index of Industrial Production has registered a two per cent rise in February after months of contraction. Of course this rate of growth is midget sized compared to the 6 per cent that India has clocked on an average in the past ten years. But it is the first green shoot after a long drought. It synchronises with yet another happy tiding, that of the consumer price index rising only 4.8 per cent in March from over 5 per cent. Significantly, this drop in retail inflation is due to moderation in food prices, a key factor that can put more disposable income in the hands of the rural population. Besides, it signals the prospect of agriculture turning the corner at last, after a minimal growth of 1.1 per cent in 2015-16 and generally lackadaisical performance in the past. Tied to that is the destiny of half the country's population engaged in agriculture, a sector that contributes only 15 per cent to GDP.

Optimism about India under Modi is not limited to his loyalists and RSS bhakts in the country. It is shared by some of the world's largest Private Equity funds who specialise in the art of investing in businesses that has the prospect to grow in the future, often on a 10-year horizon. Carlyle, the world's second largest PE fund, in a note circulated by its director of research, has noted: "The most optimistic forecast for 2016 GDP growth in China (7%) matches the most pessimistic for India". It quotes IMF data to put India's expected returns on incremental capital (a single unit of capital newly deployed) between 2016 and 2020 at 24.7 per cent. It is twice that of the global figure and 1.7 times of the Emerging Markets. Be it power, railways, roads, airports and ports, the signposts of future growth, India has come a long way in the past two years.

Under Modi, India's politics is moving away from its traditional populist mould. Earlier, Congress was identified with its populist programmes—be it MGNREGA, PDS or doles. The real gains from them remained doubtful due to lack of strict monitoring mechanism and corruption. But Modi, the pragmatic leader, is doggedly pursuing Jan Dhan Yojana, Mudra and Aadhar, projects that bring welfare within the scope of audit. Only future can tell how much of wasteful expenditure Modi's fiscal filters are going to save. He is painted as hardhearted but that did not deter him, or his colleague, Maharashtra chief minister Devendra Fadnavis, to send wagons of drinking water to parched Latur. Modi may have failed to keep his election promise of bringing black money hoarded abroad back to the country. But his government is taking plenty of measures to raise the cost of tax evasion within the country. He is determined to regulate the sectors that shelters black money, such as property, jewellery, natural resources etc.

 He took the bold decision to allow 100% FDI in e-commerce companies thereby eliminating circulation of black money in retail and wholesale trade. He may have been opposed to some of the UPA’s schemes as Gujrat Chief Minister. But he is a fast learner. Once he realises the gains of a scheme, he doggedly pursues it. The way he is going after domestic black money and didn’t yield an inch is an indication of his well crafted strategy. He knows that he is creating an army of Modi-haters. But he had an inkling that the wheel of economy will surely turn. With RBI Governor Raghuram Rajan showering praises on him, the ACHHE DIN are not too far. Narendra Modi is not a hasty reformer. But nor was Deng Xiaobing, the maker of modern China, who said it is a good policy “to cross the river by feeling the stones”

(The author is National Editor, Lokmat group)

Union Budget last lane, no gas

by Harish Gupta, National Editor, Lokmat Group

As the date for 2016-17 Union budget advances, one cannot but have the impression of ‘driving’ a car on a game console. A lot of sound effect, and dizzy images of speed. But when the game is over, you can see the image of the car right on the spot it was. No action, no distance covered.