Modi's economic vision, as I see it!

So, what’s Modi been up to in the last seven years? Naysayers have been criticizing him since 2002 and they will continue to do so forever and over the last seven years, in their pathological hatred for Modi, they have exposed themselves to be more anti-India than anti-Modi. This piece of writing, however, is not for these pathologically virulent haters of the man. This is for others, the silent majority of Indians who are willing to see reason and can debate without being partisan. Let us assess what have we seen in India over the last seven years – apparent things done by him and something nobody can dispute.

 

One, we haven’t seen any terrorist attacks that killed civilians outside of Jammu & Kashmir in seven years – yes, seven years! It was a regular feature during CONgress rule, wasn’t it? Two, Pakistan has been shown its place and given an answer to in the language it understands – we can see how precarious the state of Pakistan is, both economically as well as militarily. Three, our armed forces are getting the best of equipment (this is in contrast to the situation when our CONgress defense minister said that we didn’t have the money to buy fighter aircraft in 2013!) as well as mandate to use them as they deem fit – be it on the western borders or northern/ eastern – thus, we have busted the myth the CONgress and its cronies perpetrated for decades together that the larger neighbor was invincible! Four, we are building highways at nearly 40 kilometers a day and railways are just at the cusp of connecting all of India including J&K and northeast and not to mention electrification of the entire network will happen in a few years from now (today amongst largest railway networks in the world, India stands second with over 70% of the network electrified). Fifth, we have achieved 100% toilet coverage across India and hence also achieved open-defecation-free across the country. Six, we have made electricity available to all our six lac plus villages in the remotest parts of the country with almost zero power cuts. Seven, the health insurance scheme, Ayushman Bharat is providing health cover to 500 million of our economically challenged brothers and sisters. Eight, we are well on the way to achieve another major milestone of water on tap to every household across the country!  Nine, housing for everyone is another huge initiative of the government that’s helping the economically weak to have a roof over their head. Ten, the opening of Jan Dhan accounts to make banking accessible to over 430 million economically weak beneficiaries who have added their savings of US$20 billion into the formal banking system apart from the fact that the Jan Dhan accounts ensure that all government financial support reaches directly to the beneficiary eliminating all corruption! And lastly, in the last 18 months, we have emerged stronger from the devastating pandemic that the world is currently witnessing with a couple of indigenous vaccines that have been administered at break-neck speed to reach 700+ million doses! These are only the top ten things or so, that came to my mind as I looked back – am sure there are many many more! For all these things, the government needed money, big money – and for getting the money (which the CONgress government didn’t have in 2013 even to buy us fighter planes!), the economy had to perform for the government to generate the revenues to fund all these humungous tasks. So, this busts one of the big fat lies the CONgress keeps spreading that the Indian economy is failing – if the economy was indeed failing, then, where did the Modi government get the resources to deliver all of the above when in 2013 the CONgress didn’t have the money even to buy fighter aircraft?

 

However, the objective of this article is not to bust the lies CONgress has been spreading but to see what the Modi government’s economic vision appears to be. Is there any common thread that ties all these seemingly disparate activities that the Modi government is undertaking?

 

Let’s look.

The first thing Modi government embarked on was the Swachh Bharat Abhiyaan – we know that the naysayers of Modi were ridiculing him when he embarked on this drive and by the way, the toilet-for-all mission was part of this project only. How was it significant? We know that India lives in her villages – we have known this for a long time now, and in villages (as well as in urban centers), a simple illness such as diarrhea can make an entire household (particularly economically backward ones) a financial wreck and make them trapped in debt forever! So, the Swachh Bharat Abhiyaan would ensure that cleanliness was made an intrinsic part of all our lives and cleanliness will ensure that majority of diseases that emanate from lack of sanitation will be eliminated, and thus, most people will get de-risked from potential financial misery – isn't that simple yet brilliant? Modi government’s other programs have been similarly geared towards empowering the economically weaker segments across the length and breadth of the country – these include programs such as Gram Jyoti Yojana or rural electrification, Awas Yojana or housing for all, Jan Dhan Yojana or banking for all, Mudra Yojana or microloans for small entrepreneurs, Anna Yojana or food for the poorest of poor,  Ayushman Yojana or health insurance for covering all of the economically weak, Ujjwala Yojana or gas cylinders for rural women, and now the Jal Shakti Yojana to provide potable water on tap to all households, including all villages across the country. All these programs have only one theme and that is of empowering the rural as well as urban poor across the country. What would it deliver? One would say, a huge political dividend – that is for sure, but that apart, it is superb economics as well, as it has unleashed Bharat in ways that have perhaps not been done for nearly a millennia! I will explain this a little later but let me take up a few other things that Modi has done before I paint the overall picture of Modinomics as it will play out across Bharat in the coming decade and well beyond.

Apart from empowering the rural and urban poor across the country, what Modi has also done is also break the agriculture sector from shackles of inefficiency with the roll-out of three farm laws that as I have explained in one of my previous blogs – is a major gamechanger for the rural economy. Then, with his Atmanirbhar program, Modi is giving a huge push for indigenous manufacturing with amongst the lowest corporate taxation regime anywhere in the world attracting record FDIs into the country as well as incentivizing local players to step up their investments. Not just that, local manufacturing in the area of defense and opening the sector to private players have also spurred the sector into action with a significant jump in defense exports in the last seven years. Further, huge investment in the development of infrastructure across the country including roads, rail networks, ports, airports, and waterways is going to unleash the logistics sector in ways that we have never seen before leading to making Indian manufacturing competitive and further spurring domestic investment and FDI into the manufacturing sector. Further, with credit support to micro-enterprises, the Mudra Yojana has provided over 300 million microloans with an overall credit outlay of over $200 billion over the last seven years! Lastly, a program such as the One District One Product program will facilitate healthy competition within and across all the 700+ districts in the country to bring the best out of our people to showcase to the world.

 

Now that we have more or less captured most of what Modi has done over the last seven years – let's now see if there is a common thread that ties it all up and how does it unleash Bharat in ways that have not been done for nearly a millennia.

 

What is needed for a society to flourish and grow? Five things: stability, security, freedom, infrastructure, and opportunity. Modi has ensured all these for our people. As it is said, we can move as fast as our slowest constituent – hence, Modi's focus on the last man in the chain. Modi is empowering the poorest sections of our nation by giving them access to healthcare, electricity, potable water, food, and access to credit for setting up micro-enterprises, thus, unleashing the entrepreneurial spirit at the bottom of the pyramid – this will spur livelihood and eventual wealth creation for these currently marginalized segments of our nation. Imagine a scenario: with no lingering worries about healthcare, or for that matter food security or of roof over their heads and the fact they can now save two hours a day they spent just on getting potable water for the household and that they will have access to electricity giving them another four productive hours per day, the women in villages are getting empowered to start a micro-enterprise – now, assume that just a third of the women in Bharat (in the villages) potentially start such an enterprise, we are talking about nearly 100 million women who can potentially add say ₹6,000 per month to our GDP or over ₹7 lac crores p.a. or 3% of FY21’s GDP – assuming we can achieve this over 5 years period, this alone translates to a GDP bump up by 0.60 percentage points every year over the next 5 years just from women in rural India from a base of zero today! Now, imagine it’s not a third of such women but two-third of such women or for that matter all women participate in this revolution: GDP will see growth by 1.2% points to nearly 2% points just from this alone year-on-year for next five years! Further, with access to reliable electricity, a lot of agriculture-processing can take place within villages and apart from value-addition and value-creation in villages, food spoilage can be reduced or even eliminated – what would be the addition of this to the GDP? Also, with access to electricity and with the New Education Policy in place, the children pursuing studies in rural India i.e., over 300 million pupils will be spurred into pursuing academics and from that say just 0.1% achieve scholarship, we are looking at the very least over three hundred thousand high achievers coming from Bharat! All this will push rural India or Bharat’s resurgence as the new growth engine (right from the bottom of the pyramid) for India’s GDP, leading to not just be the source of GDP growth but also be the huge source for domestic consumption that would stimulate further demand creation in the economy that would be fed into by urban producers and service providers aka stimulation of economic activity across the country, from the bottom to the top.

 

Can you imagine the juggernaut that would be set rolling?

 

An empowered Bharat contributing by way of transformed agriculture and rural GDP will lead India’s economic growth from the bottom-up setting off a perpetual cycle of tremendous growth for decades to come. This is what Modi’s economic vision looks like to me!