100-day agenda of Modi government

Wednesday 05th June 2019 05:33 EDT

A full majority government has been re-elected in India after many years. A young, aspirational India has identified itself with Prime Minister Narendra Modi and his “idea of India”. Here is a non-exhaustive agenda for Modi’s first 100 days. India is on the cusp of overtaking the United States to becoming the world’s second largest economy, with a consumer spending of $5.7 trillion, 77% of the population under 44 (80% among the middle class), and a billion Internet users, all by 2030, according to the World Economic Forum.

In mission mode, Modi needs to expand his “home delivery of services” model (cooking gas, health care, multiple citizens’ services) to cover major government services. Separating the “point of decision” of a government service from “point of delivery” will be a necessary condition to get red tape out of the way. Technology as the lifeblood has to flow through every major government programme, especially in agriculture and health care, through the ambitious ‘Digital India’ programme, which cannot remain a stapled-together version of the schemes of previous years; it needs to become genuinely transformational.

Loan waivers and input subsidies have not ameliorated rural distress, so the key policy shift is to move away from production to income. Having promised $85 per small farmer as a direct transfer, he needs to move from an inefficient, ossified cross-sector subsidy regime to an income-support model. This is possible by expanding this to cover all farmers in terms of both value and volume.

Harnessing data

India is emerging as a major ‘data economy’ with over 800 million mobile phone users, half of whom own a smartphone. India needs to leverage the enormous data it produces and deepen use of an ‘India Stack’ everywhere. However, India is way behind the US and China in terms of artificial intelligence, data analytics and blockchain. It needs to pump in millions of dollars to make itself future ready, perhaps by first completing the fibre optic pipe that it begun to lay five years ago. It needs to make it extremely simple for startups to start and die (should they wish to). India received about $11 billion in venture capital through 748 deals in 2018 (of $29 billion private equity inflows) but there is much more capital waiting to come if its unicorns and ‘soon’icorns (soon to be unicorns) benefit from an easier regulatory framework.

Modi needs to set up an “India First” Investment Agency directly in his office which should reach out to select ‘Fortune 1000’ companies to set up shop in India. He needs to send empowered envoys to attract them for marquee investments (in exchange for assured job creation). Credible incentives must include an exemption from India’s notoriously opaque land laws and bureaucratic maze.

There are 200-odd labour laws that mandate companies with 100 or more workers to get government permission to lay off or even change job descriptions (which never comes). Thus, India does not get the benefits of scale of huge factories with over 75% firms employing less than 50 workers, to escape such regressive laws. There is a golden opportunity to compete with and take business away from Bangladesh (garments), China (toys, electronics and manufacturing) as their wages rise. India can turn attractive by abolishing such restrictive labour laws, which will enhance employment by erasing a key factor that throttles India’s global competitiveness.

Fast tracking privatisation

There must be a start to the privatisation of Air India and the other top 10 public sector entities without the restrictive covenants that discouraged bidders the last time. It should not be a tinkering on the margins with privatisation as has been the case so far. The bold reclassification of bad loans (of about $190 billion) to reveal their true picture needs to be followed by recapitalisation, a merging of banks, narrowing down priority-sector lending.

And finally, the focus needs to be on execution and delivery. Modi should set up a delivery unit inside the Prime Minister’s Office using modern technology tools for deep monitoring and follow-up, programme-wise and office-wise. The government’s relentless focus should be on results and not only on process and effort. This can be the next avatar of the Pro-Active Governance And Timely Implementation (PRAGATI) system.

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