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BJP and Modi – Hits and Misses till mid 2016

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Tushar Kansal
Tushar Kansalhttp://www.tusharkansal.com
Tushar Kansal has served in senior positions in Corporate Finance at Deloitte Touche Tohmatsu, Brand Capital (ToI), Aircel & was Head (Debt Management) at MTS India where he raised more than USD 2.5 billion complex structured debt from International and Indian Banks. He launched the startup IndusB2C.com in end-2014, prior to which he served as CFO (Chief Financial Officer) of DLI (Distribution Logistics Infrastructure), owned by Guggenheim; a USD 200 billion American Private Equity (PE) Fund. He is a B.Tech (Textiles), MBA (Financial Management) from University of Delhi and Google AdWords/ Analytics Certified. Tushar blogs at tusharkansal.com, tweets @TusharKansal & publishes relevant news on the right-wing Facebook page https://www.facebook.com/induschurning/

India is very young (median age of 27 years), thereby making it an utmost necessity that its youth be put to use in constructive, nation building work lest it get sucked into crime or terrorism.

PM Narendra Modi, for one, is a die-hard optimist. BJP (Bharatiya Janata Party) is a vehicle which keeps Nation first. It is an ideal combination for India’s prosperity.

If one goes by the media narrative, we are in midst of multiple duels – that of India vs Bharat (meaning the West-eulogising ruling elite vs rural have not’s), that of neo-modern India (as a 70 year old independent nation) vs classical India (as an 8000 year civilisation) as well as crony capitalism/ crony socialism vs market economy cohabiting with a welfare state.

Presented here is a brief on Hits and Misses in first 2 years of Modi Government.

Two years of Narendra Modi
Two years of Narendra Modi Government

Hits

An economy running on old structure of PSU’s (Public sector units), led Congress to take India down the road of “Crony socialism” – old industrial families (akin to the crony capitalist Oligarchs of Russia) in connivance with dynasty Congress party patriarchs in Government, extracted benefits from the state through corruption and distorted free markets. Congress promoted wasteful public expenditure in guise of “Remove poverty” sloganeering – today hundreds of PSU’s exist which make no commercial sense – 4,00,000 employees get paid from Taxpayer’s money for no work and losses.

Under this rule were distributed loans worth many crores to dubious promoters, all of which are now NPA on books of Banks.

Modi has done away with legacy Crony socialism. Latest recommendations from Niti Aayog clearly say that Government should be only in industries, which are strategic or are must-needed in the long-term, even if they are commercially nonviable.

Then there is the IT (Information Technology) sector, commanding great heights and which has been promoted vigorously by Modi.

Modi’s primary focus is rightly on implementation of laws, rather than instituting them, for every problem. He is also weeding out old, useless laws.

Modi has abolished crony capitalism by a fair business regime which gives equal opportunities to entrepreneurs while promoting capable executioners. Case in point is the new Airlines policy which gives a uniform platform for new entrants, or auctions in Coal and Spectrum.

Modi is treating Indian and Foreign businessmen on equal footing, by a fair regulatory regime and by allowing wide ranging participation in auction of land and minerals. FDI limits have been massively increased across the board.

Modi is also rapidly promoting de-personification of country’s Institutions and making them accessible on the internet. The National Optical Fibre Network (NOFN) project, is connecting all 250,000 gram panchayats in the country through optical fibres, using the networks of Bharat Sanchar Nigam Ltd, RailTel Corp. of India Ltd and Power Grid Corp. of India Ltd and laying additional fibres. A total of 1,30,000 kms of fibre is being laid.

A stable regulatory regime needs continuity of policies and control on over zealousness of Public servants to go by the letter of the law rather than the spirit of it. Modi has accurately recognised this and drastic change of commercials and policies, be in Budget, or in regular administrative policies, has been done away with.

Modi is pushing massive infrastructure investments to boost GDP (Gross Domestic Product) and create a modern nation – be it in highways, ports, waterways or airports.

Modi’s vision is an India completely internet connected and truly integrated into a globalised world.

Modi has also created a truly secular Government, which doesn’t recognise castes and aspires to harmonise and promote uniform religious laws conforming to human values of freedom, equality and liberty. His motto is Constitution first and Sabka Saath, Sabka Vikas – to be with all and to help in everybody’s development.

No one interested in upliftment of India can ignore Agriculture – Indian farmer needs to bring his produce to the market directly, have access to cold storage, warehousing, move up the value chain by getting into branded products and also conform to modern requirements like organic products. Modi’s National Agricultural Market (NAM) is a step in the right direction. He has also diversified agricultural insurance by getting Government to pay for Farmer’s premiums.

Modi is creating robust Export capacities with latest Technology, with Make in India initiative, albeit in an environmentally sustainable manner. He was instrumental in global signing of the Paris Accord.

Looking at US-Canada border or the free movement of people and capital in EU (European Union), Modi is aspiring to create the same for SAARC (South Asian Association for Regional Cooperation) – Project Mausam and increasing connectivity to Bangladesh, Myanmar-Thailand trilateral highway, Sri Lanka (bridge over the sea), Nepal, Bhutan and Afghanistan (Through Chahabar port in Iran) have been achievements for his Government.

Modi also aspires to make India a Financial hub of the world like London, with much deeper, widely held, efficient capital and debt markets. Modi’s vision is to keep taxes low and make INR (Indian National Rupee) fully convertible to enable the rich of the world to do business from India and make it a favourite destination for world’s richest and for headquarters of MNC’s (Multinational Corporations).

However, Modi is plugging Black money loopholes – Mauritius treaty revision, enhanced KYC norms for P-notes, agreement with Switzerland being case in point.

Modi also wants to strengthen the INR, because India is primarily a consumption theme, imports are high and infrastructure development necessitates import of technology intensive capital equipment. But this is WIP (Work in progress).

Then there are other popular initiatives – Clean India campaign, Save and educate Girls, curb on Black money, targeted subsidies through Aadhaar, Make in India, Jan Dhan Yojana, Mudra loans, GST, Defence production, Smart cities, the Power revolution, Digital India, Skill India, increase in Forex reserves by $100 billion and interlinking of rivers.

Misses

It is in Education and Healthcare that some reform pieces are missing – The base for a robust social fabric is proper education & healthcare, especially for our women and children – solutions like India’s light-asset, neighbourhood schools of pre-independence have to return. In Healthcare, there is hardly a substitute for investing in high-end Hospitals.

Modi seems to be ignoring India’s burgeoning population – He would do better by instituting, for a fixed period, stiff restrictions on Government jobs to families with more than one child, to arrest population growth and raise standards of living across the board.

Besides GST (Goods & Services tax), Modi could transition the black money economy of India to a cashless economy like that of Sweden, by abolishing Income Tax in the long term. He is promoting technologies like Mobile Wallets already.

Licence Raj is gone from India, but Inspector Raj still remains. India is too lenient, democracy as practised here is too distorted and there is lack of fear of the adverse in minds of those with even small power. Public services, in West, Middle East, China, Japan, Europe, South Korea or ASEAN, are devoid of corruption. So, while corruption in top echelons there is humongous, but not in daily necessities – like Licenses, water, electricity, real estate certificates etc. Modi has completely removed top level corruption in India. But the only way out now for culling corruption at lower levels, is to bring death penalty for corruption in any public service.

Given the lack of respect for law in mind of many Indians, stemming from a Judiciary mired in humongous number of Court cases and hence in permanent coma, Modi can unclog Courts by moving intra-Government cases to arbitration panels. Modi should also slash on multiple appeal layers of our judiciary system to ensure justice is quickly & correctly delivered.

This is a tricky issue for the Government since Judiciary reports to no one – NO ONE in the system! While Modi has attempted to correct this by NJAC (National Judicial Appointments Commission) Bill, but Judiciary seems to love its “independence” so much so that it is not correcting itself and merely usurping more powers from the Legislature. Crores of cases are stuck, a large part of Judiciary is corrupt and there is no check and balance on them, just on the pretext of Judiciary’s “independence”!

Modi should bring a law to curb incessant sensationalism by Indian media.

Lastly, Modi should aspire to do away with all Reservations (in selections or promotions) because they kill meritocracy and sap institutions, but keep them only for sections which have been historically wronged, like SC’s/ ST’s (Scheduled Castes/ Scheduled Tribes), but that too up to a sane level and only in selections.

Going by how BJP and Modi are accomplishing things one by one, India is indeed in the right direction.

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Tushar Kansal
Tushar Kansalhttp://www.tusharkansal.com
Tushar Kansal has served in senior positions in Corporate Finance at Deloitte Touche Tohmatsu, Brand Capital (ToI), Aircel & was Head (Debt Management) at MTS India where he raised more than USD 2.5 billion complex structured debt from International and Indian Banks. He launched the startup IndusB2C.com in end-2014, prior to which he served as CFO (Chief Financial Officer) of DLI (Distribution Logistics Infrastructure), owned by Guggenheim; a USD 200 billion American Private Equity (PE) Fund. He is a B.Tech (Textiles), MBA (Financial Management) from University of Delhi and Google AdWords/ Analytics Certified. Tushar blogs at tusharkansal.com, tweets @TusharKansal & publishes relevant news on the right-wing Facebook page https://www.facebook.com/induschurning/
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