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Posted on 21 March, 2019, No Comments Comments admin
I have repeatedly maintained that a fundamental difference between truth and falsehood is that truth holds together and falsehood falls apart. To each fake campaign of the ‘Compulsive Contrarians’ over a period of time, ultimately the truth has prevailed. Either it is the electoral mandate or the judicial process which gives the final verdict.
The vicious theory of ‘Hindu terror’
The vicious theory of ‘Hindu terror’ was coined during the UPA Government by important UPA Ministers and leaders. The ‘Compulsive Contrarians’ adopted it. It was an effort to distract attention from Jehadi terror. It was a conspiracy to give a bad name to the otherwise liberal majority community in India. On terrorism, Hindus were drawn into equivalence. Terror is alien to the Hindu culture. In fact, it’s alien to India’s legacy. We are amongst the few successful nations in the world which have managed to overcome terror and insurgency in several parts of the country. Not a single Indian has ever been arrested or killed in attempting a blast or a terrorist violence across the border. In a series of incidents across the country during UPA-1, an effort was made to invent ‘Hindu terror’. In one case, the actual terrorists were arrested. Upon rethinking by the Government, a charge-sheet was filed against a set of individuals belonging to the Hindu community and completely contradicting the earlier investigation. In the Samjhauta Express blast, the US State Department and the United Nations kept indicating a certain Jehadi organisation and individuals responsible for the 2007 blasts at Panipat. However, it was considered by the then Government as a ‘Hindu conspiracy’. Yesterday’s verdict by the Court has judicially put the last nail in the coffin of the so called ‘Hindu terror theory’.
The Godhra train fire of 2002
The burning of the Sabarmati Express at Godhra in 2002 was an attempt to instigate social and communal tension in the State. The accused in the case were identified. There was voluminous evidence available. The accused were arrested at different points of time, chargesheeted, their bail applications were rejected right up the Supreme Court. Many of the accused were convicted earlier and an accused arrested subsequently has been convicted by the trial court yesterday.
Many ‘Compulsive contrarians’ who had made a career out of creating social tensions in Gujarat started contending that the burning was self-engineered by either the State or the Kar Sevaks. In the most irresponsible act of the UPA Government, the Ministry of Railways under Shri Lalu Prasad Yadav selected, without consultation of the Chief Justice of India, a retired Supreme Court Justice, Mr. U.N. Banerjee, as a Commissioner for Railway Enquiry. The Judge willing to oblige the Government and its political interest, submitted a report that there was no burning by the mob and that the fire had taken place from inside the compartment where the Hindu pilgrims were. I regard this subversion of evidence in order to cover up the heinous crime as the worst stigma on the UPA Government and its Prime Minister. Such a report had no evidential value. Yesterday, the trial court, after perusing all the evidence, has convicted one more accused.
Nirav Modi Arrest
Nirav Modi started cheating the Public Sector Banks in 2011. It was a continuing crime. His crime was detected in 2018 by the. Banks and investigating agencies under the present Government. His assets have been frozen, are being auctioned, criminal prosecution against him have been filed, recovery action for the dues owed to the banks and creditors are being pursued. He is alleged to have been escaped from one jurisdiction to another. It goes to the credit of our investigating agencies that they were pursuing him. On our request, he has now been arrested and denied bail. There is a strong unanswerable case against him and hopefully India will get him back. Whoever cheats India and its institutions cannot get away. He will be found out. This also busts the fake campaign that the present Government had anything to do with him.
There is an inherent danger in relying only on fake issues. They crack up and collapse as three of them did yesterday. I hope the manufacturers’ of fake campaign learns some lesson. They don’t seem to be considering their brazen attitude.
Posted on 20 March, 2019, No Comments Comments admin
Yesterday, the 19th March, 2019, the GST Council held its 34th meeting.
The GST was enabled by a Constitution Amendment which was unanimously approved by both the Houses of Parliament. Several legislations to implement the GST were passed by the Parliament. Laws relating to the State GST (SGST) were approved by all the State Legislatures.
The GST has enabled a single indirect tax in the whole country. Its implementation, compared to several other countries in the world, has been extremely smooth. Some initial teething trouble are to be expected. Everyone learns from experience. Not only did the GST consolidate multiple taxes and multiple cesses, it eliminated barriers in the country overnight. The whole of the country became a single market. Inspectors were eliminated; taxes were reduced and interface between the assesse and the Department was reduced. The online filing of returns and assessment was the order of the day. The input tax credit prevented the cascading effect of tax on tax and ensured that the back chain in manufacturing and services was done through authorisedly. A more efficient system detected leakages and improved the revenue collections. States have been guaranteed, for the first five years, a 14 per cent increase in annual revenue. For the first time since Independence, consumers have witnessed a continuous reduction of taxes.
The decision making process of the Council
Chairing the Council in its initial years has been one of my most satisfying experiences. The quality of participation of State Finance Ministers and their supporting Civil Servants was extremely high. The debates in the Council were on issues of substance. There was no populism. Concern for revenue, consumers, industry and trade dominated the discourse. They concentrated on simplifying procedures. Members shed their political colours outside the meeting venue. To satisfy their political constituencies, some spoke outside the meeting but inside there was an atmosphere of positive suggestions. At times conflicting views and thereafter the consensus.
Thousands of decisions have been taken in the Council. These range from framing of new regulations, circulars, notifications and tariff fixation. Council was always prepared, based on market reports, to make changes wherever required.
The States effectively had a two-third voting right and the Central Government had one-third voting right. All decisions had to be approved by at least three-fourth majority. This necessarily meant that the Centre and the States had to work together. Yet the Council set an incredible precedent which recognises the delicate balance of India’s federalism by taking all decisions through consensus and not once putting any decision to vote. I hope this continues in future. The decision making culture involved extensive discussions flagging various viewpoints and, thereafter, formulating the consensus. A consensus is never imposed, it evolves. Where consensus was not possible, the matter was not pursued.
The lessons from the GST Council
The GST Council has become India’s first federal institution. Its working is a role model in other areas where federal institutions are needed in India. It displays the maturity of India’s democracy and politics. When larger national interest requires, decision makers can rise to the occasion. It negates the popular impression that politicians of different shades of opinions will always be divided on party lines. It has worked to the benefit of industry, trade, consumers and has become the single most important tax reform in Independent India. The question, thus, is why can’t this experiment be replicated elsewhere?
Agriculture, rural development and healthcare
Agriculture, rural development and healthcare are areas where, in larger national interest, the GST Council experience heeds to be replicated. Both the Central and the State Governments have several schemes working for the betterment of the farmer. The agricultural sector needs a major support. Both Centre and States spend a large part of their budget in the sector. Similarly, the process of developing rural infrastructure and improving the quality of life in villages has now started. A lot more needs to be done in both agriculture and rural development. Should the Centre and the States be only competing and not supplementing efforts of each other? Should they not be pooling their resources and ensure that no overlap or duplication takes place and that the interest of the largest number is protected and enhanced?
The same is equally true on healthcare. Primary Health Centres, hospitals, health schemes for treatment of poor patients, supply of medicines at an affordable cost are all intended by both Central and the State Governments to ensure that affordable healthcare is available to the people. For those who cannot afford healthcare, it is available at the cost of the Central and some State Governments. Is overlap of expenditure necessary or should it be pooled and spent in an optimum manner?
Are elected Governments intended to non-cooperate with each other or must they work on the principle of “Bahujan Hitay Bahujan Sukhay”. West Bengal, Delhi, Odisha are amongst the States which have refused to implement Ayushman Bharat where every poor family gets upto rupees five lakh of hospitalisation support annually. Rajasthan, Madhya Pradesh, Delhi, Karnataka and West Bengal are non-cooperative in PM Kisan scheme where small and marginal farmers get Rs.6000/- income support annually. Is this in public or national interest? Is it necessary to act against the poor and allow the compulsion of competitive politics to take over?
Society has great faith in the wisdom of men and women. The country hopes that the wisdom prevails over transient political requirements.
HAPPY HOLI
Note – This is the 10th and the last of my ‘Agenda 2019’ articles. However, I will continue to write when interventions in public cause are required.
Posted on 19 March, 2019, No Comments Comments admin
The irony of a large number of Opposition leaders is that they specialise only in politicking and sloganeering rather than understanding the world of development and economy. One of the fake campaigns against the present Government has been on the question of economic data. The Central Statistical Organisation (CSO), which handles data management, always maintains an arm’s length distance from the Government and functions professionally and independently. Our data is maintained as per the best global practices. The World Bank and the International Monetary Fund have always commented favourably while accepting our data. The recent statement by the 108 purported economists needs to be analysed. Most of them have, over the last few years, repeatedly signed the memorandums of manufactured political issues against the present Government. ‘Compulsive contrarians’ can hardly be objective.
We need to analyse as to where we stand in terms of the economy. The period 2014-19 has witnessed the fastest ever growth of the GDP in India for a five year term of any Government. It has been a period of fiscal consolidation. The following chart will give the exact comparison of how the economy has performed during this period as against the earlier period.
An analysis of the above table clearly reveals that the five year GDP has been 7.5 percent – the fastest amongst the major economies of the world. Inflation has been broadly under control. Fiscal Deficit has gradually slided down. The external debt as a percentage of the GDP is on the decline and there is significant improvement in the Current Account Balance of the Government.
GDP and Fiscal Prudence
- Inflation: Inflation during the period 2009-14 was 10% plus. During the period 2014-19, it will come down to an average of about 4.5%. In fact, the last three years average is much lower. Presently it is close to 2.7 per cent.
- Jobs: The recent survey of MSME published by the Confederation of Indian Industry in the month of March, 2019 covers 105,345 firms of varying sizes, across sectors and geographies. The survey indicates “a growth of 13.9 per cent in Net Jobs Created over the last 4 years at 3.3 per cent per annum (compounded growth rate).” The survey further states “given that the total workforce size according to the Labour Bureau is estimated at 450 million (projected for 2017-18), the overall job additions work out to 13.5 – 14.9 million per annum.” The above fits in with the trends given by the EPFO data by S.K. Ghosh and Pulak Ghosh. All these data indicate the general trend of jobs increasing in India, which match the 7.3 per cent average growth rate of GDP. Normally a high growth rate leads to a higher job creation. This can be negated only if the productivity levels suddenly grow up. In India, it is unlikely. There is no social dissatisfaction in terms of popular agitations or protests. Thus, the fake campaign of job losses in India deserves to be rejected.
If we consider the rate of growth of GDP, investment in infrastructure and accompanying economic & labour reforms for the last five years along with the underlying structure of the Indian Economy, it would be amply clear that there have been several sources of employment growth and creation of gainful employment opportunities.
MoSPI has been bringing out employment related statistics using payroll reporting. EPFO data shows that 72.32 lakh new subscribers were added to EPFO between September, 2017 and December, 2018. This would not be possible without an increase in jobs in the formal sector. This is corroborated by a study by Mohandas Pai, which calculated that 1.08 crore jobs have been created in just three professions – CAs, Lawyers & Doctors in 2017.
The faster pace of constructions of National Highways and rural roads under PMGSY are estimated to have generated 178.8 crore person – days of work (as per an IIT, Kanpur Study).
New entrants in the e-commerce and technology space like Uber, Ola, OYO etc have generated a large number of direct and indirect employment activities. About Rs.7.99 lakh crore have been sanctioned under MUDRA, out of which 28% loans are to new entrepreneurs. It would be preposterous to contend that the fastest growing economy in the world is actually losing jobs and that even the 17.1 (as on 19.3.2019) crore Mudra loans created no jobs through self-employment.
- The Insolvency and Bankruptcy Code: It is estimated that in the last two years about three lakh crore of NPAs have been recovered on account of enactment of IBC either through the IBC process or through the pre-IBC provisions. The ability of banks to support growth has increased. The amalgamation of banks is giving way for stronger lending institutions.
- Some Social indicators: The LPG coverage across the nation was 55 per cent in December, 2014 and had increased to 93 per cent (as on 8.3.2019). Ayushman Bharat has provided hospital healthcare to 10.74 crore families totalling about fifty crore beneficiaries. Rural sanitation has increased from 39 per cent in 2014 to 99 per cent as of today.
- Infrastructure indicator: Rural roads were built in 2013-14 at 69 km per day. It has increased to 134 km per day in 2017-18. The same is the position with the National Highways, where today 25 km per day i.e. more than 10,000 km a year are being built. Currently the Metro service operates in 14 cities and its length is 645 km. India’s first High Speed Rail will be completed in 2022-23 covering a distance of 500 km between Ahmedabad and Mumbai. India’s air traffic in the last four years has seen the largest ever growth. Today we have 102 functional airports. We have moved towards near total rural electrification. The construction sector, which traditionally creates significant jobs, is growing in double digits. Yet, if the critics are to be believed, this growth did not create jobs.
- Electronics manufacturing: The Indian electronic sector has made significant advances in the last five years. From Rs.180,000 crore manufacture of electronics in India pre-2014, we have now touched Rs.3.87 lakh crore of manufacturing. The five years of the NDA Government will see the growth of the electronic sector close to rupees five lakh crore. From almost a negligible manufacturing of mobile phones in India in 2013-14, today we are the second largest producer of mobile phones in the world. An incredible contrarian data shows that this did not create jobs.
- Ease of Doing Business: From a low of 142 in 2014, our ranking in the first four years of the Government has improved to 77. This is the fastest ever growth of 65 places in our ranking. In areas such as, ‘Construction Permits’, we have improved our rank by 129 places. In ‘Trading Across Borders (customs)’, we have improved 66 ranks. We have similarly improved in other areas such as ‘Starting a Business’, ‘Getting Credit’, ‘Getting Electricity in a Country’. We still need to improve under certain sectors such as ‘Enforcement of Contracts’.
- Rural Infrastructure and Agriculture: Today India spends Rs.1,84,000 crore on the Right to Food for the poor people by providing them subsidised food. India spends Rs.75,000 crore in income support to our farmers. It further spends Rs.60,000 crore on the Rural Employment Guarantee, the highest ever. We have tripled the expenditure on rural roads. We have made substantial headway in rural electrification, sanitation and cooking gas. On healthcare, through Ayushman Bharat, we have launched the largest and the most successful healthcare scheme for the poor people. We are supporting farmers with over rupees twelve lakh crore of credit, interest subvention, subsidised crop insurance, subsidised fertiliser and seeds and increased MSP and income support system. I believe that these measures when combined with enhanced investments in rural India over the next ten years will help us to bring the quality of rural life closer to those in the cities.
I have given some details of economic development in India over the last five year using empirical evidence. The evidence clearly shows rapid progress in the economic fortunes of all Indians irrespective of caste or creed. Only those who failed to develop the Indian economy despite being in power for several decades cannot witness the reality that is staring in their faces. The whole world, including the IMF and the World Bank, regard India as the fastest growing major economy in the world. The 130 crore Indians believe it. Only the ‘compulsive contrarians’ don’t!
Posted on 18 March, 2019, No Comments Comments admin
Five year is not a long period in the life of a nation. It can, however, be a turning point in its direction for progress. 1991 was an important watershed in Indian history. Prime Minister P.V. Narasimha Rao was confronted with an economic crisis. The economic situation compelled reforms. Many in the Congress Party lacked the conviction to support reforms. After the initial two years from 1991-1993, the Congress Party became apologetic about the reforms. That is probably the reason why the efforts to erase the memory of Shri P.V. Narasimha Rao from Congress Party’s contemporary history is still ‘work in progress’.
The National Front Government partly rationalised direct taxes. The first NDA Government took key decisions with regard to infrastructure creation and prudent fiscal management. Bold policies on telecom and National Highways made significant impacts on the economy. The UPA Governments between 2004-2014, got stuck into slogans rather than economic expansion. They created ‘Rights’ without a major increase in resources being provided to implement those rights. Subsequently, the Government got marred in corruption and wasted its tenure in a cover up exercise. Prime Minister Modi’s Government was elected when India was already a part of the ‘Fragile Five’ and the world was predicting that India’s ‘I’ will be knocked off from the ‘BRICS’. The Government had no options. It was committed to reforms. ‘Reform or Perish’ that was the challenge before the Indian economy. Therefore, the Government systematically and consistently introduced several reforms spread over a five year period which will go down in India’s economic history as the ‘Second Generation’ of reforms that were much needed. I discuss herein some of the significant steps that the Government took:
- Taxation reforms and entire black-money steps
India was substantially a tax non-compliant society. Taxation Departments of the Government were a source of harassment which dissuaded people from coming into the tax net. Our tax rates were abnormally high. The interface between the assessing officers, businessmen and inspectors needed to be substantially cut down. The last five years will be considered momentous in this journey. No taxes have been increased. In fact, after sixty-seven years of increase, tax rates have moved downwards. In a bold step spread over a five year period, the income upto rupees five lakh has been exempted from income-tax. Even deductions available to the taxpayers have been increased to encourage and incentivise savings. The Goods and Services Tax has enforced one tax across the country, eliminated barriers and made inspectors disappear. Both income-tax and GST returns are filed on the net and assessment are done on the net. No interface, no corruption. Queries are raised on the net and responses are given on the net. The number of assesses filing returns with reduced tax rates in income-tax has risen close to double in the five year period. The GST will increase the assessee base in the first twenty-one months of its implementation by almost eighty percent. The ideal tax policy of simplification, no interface, lower rates and higher collections, has been implemented.
- The anti-black money measures
From the legislation of black-money law, through the laws dealing with the confiscation of property of fugitives and extinguishing their civil rights, significant taxation measures to curb black-money have been taken by the Government. The double taxation prohibition treaties with Mauritius, Cyprus and Singapore have been re-written. International agreements have been entered into for real time exchange of information relating to assets held by Indians in their jurisdiction.
- The Insolvency and Bankruptcy Code
Indiscriminate lending by Public Sector Banks during the UPA Government had created large NPAs. The banking system was under stress. It was being unabled to support growth. Existing schemes and systems were not working. The Insolvency and Bankruptcy Code changed the debtor-creditor relationship. Defaulting managements are removed from management and debtor companies are going in for resolutions with either new promoters taking over or by sale of assets. Banks have finally started recovering their bad debts. No one can cheat the banks and get away.
- Aadhaar
The implementation of the Aadhaar had given a unique identity number to every Indian. It is a historic step towards using technology and digitization of governance. The result is that without any pilferage or middlemen, the beneficiaries of all Government programmes belonging to the Central Government, the State Government or even the local bodies can now get their benefits in bank account directly. In this area we are ahead of any other country in the world.
- Demonetisation
Demonetization has proved to be a significant step towards formalisation of the Indian economy. It compelled people to deposit their high currency cash into the banking system, account for the deposits by paying taxes or otherwise. It brought a behavioural change in how India spends its money. The real test of the demonetisation is ‘has it led to higher tax collections and higher digital transactions?’ The unequivocal answer is ‘Yes’.
- Inflation
The average inflation of UPA-2 was about 10.4 percent. The average inflation during the NDA has been less than 4.5 percent. In fact, it has been much lesser in the last three years. Today the CPI inflation is below 2.5 percent.
- No discretions
The NDA eliminated all discretions which Governments, bureaucrats and politicians had. There is no power in any individual or group of individuals to grant favours, largesse or contracts to individuals. Systems have been established and all contracts can only be awarded through a market mechanism.
- Cooperative federalism
The Fourteenth Finance Commission recommended 42 percent as the share of the States in devolution of the taxes collected by the Centre. It was a significant increase by 10 percent of what the Thirteenth Finance Commission had recommended. The Central Government immediately agreed. The States are today fiscally much stronger. In the GST Council, the States have a two-third vote and the Central Government has a one-third vote.
- Agriculture and rural infrastructure
For the first time, resources have been spent in a major way in rural areas. Rural roads, housing, sanitation, electrification, cooking gas, have all been added to our infrastructure. The farmers now get 50 percent plus their cost through MSP, a subsidised crop insurance scheme, a Rs.75,000 crores income support system by payment of Rs.6000 each to small and marginal farmer annually and Rs.60,000 crores through MNREGA.
- Urban infrastructure
I will separately give details in my later articles on the creation of urban infrastructure. National Highways, rural roads, port connectivity, number of airports, surplus power, modernisation of Indian Railways, more resources for urban infrastructure, significant resources for rural infrastructure, have been the hallmark of infrastructure improvement in the last five years.
- Ayushman Bharat
On healthcare, India has seen a major change. Today Ayushman Bharat ensure that 40 percent of the poorest Indians i.e. 50 crore people get a free hospitalisation upto an expenditure of rupees five lakhs a year. In the first few months, nearly sixteen lakh people have been treated till date. Today, with 40 percent support by Ayushman Bharat and 38 percent support by insurance schemes of either Government employers or corporate body, 78 percent of India is health insured. Our target is to make it hundred percent.
- Financial inclusion
In financial inclusion India has become a global leader. About 35 Crore bank accounts under the Pradhan Mantri Jan Dhan Yojana were opened and every poor household has been connected to the banks. As against 58 percent of the households in 2014, today every willing household is connected to the banking system. Crores of poor people have got an accident and life insurance at normal and negligible cost under the subsidised Government schemes. More than 16 Crore Mudra loans have been given to small entrepreneurs for creating avenues of self-employment. The Indian example in financial inclusion is globally quoted as a role model.
- Investment and Make in India
The stressed banking system that the UPA left behind, had its impact on the investment cycle. From a worrisome situation on the investment front, today fixed capital formation, which is an indication of investment, has moved upto about 14 percent. The Foreign Direct Investment has been liberalised and procedures simplified so as to ensure that India becomes the preferred destination for investment.
- Social impact of Government in social sector investments
Swachh Bharat, which has connected 99 percent of rural homes to sanitation, became the flagship success story. The education of the girl child, reduction in drop-outs from schools, increased remuneration on those employed in the formal sector such as Asha and Aanganwadi, and other such workers has had a tremendous economic impact. So will be the impact of the 10 percent reservation in jobs and college admission for the economically weaker sections. The minimum wages have been increased by about 45 percent. The gratuity limit has been increased from Rs. 10 lakhs to Rs.20 lakhs. Income eligibility for bonus has been increased from Rs.7,000/- to Rs.21,000/-. The impact of middle income groups by implementing the Seventh Pay Commission, the OROP and increasing Government share from 10 percent to 14 percent in the New Pension Scheme has helped the salaried class. The contributory pension scheme for the ten crore informal sector workers is a new first for India. It will make India a pensioned society.
I have outlined above only fourteen game changing decisions of the Government which impacted the economy. The economy expanded at a rate faster than any other country in the world. Our revenues went up and we ensured that the benefit of prosperity and the first right to the exchequer going to the poor is maintained. It will be our endeavour to maintain this direction in future also.
Posted on 17 March, 2019, No Comments Comments admin
India is today at the cusp of making history. Industrial revolutions bypassed us in the past. We had to fight the menace of poverty and lack of growth. A regulated economy for over four and a half decades had added to our woes. When we broke away from ideological shackles of the past, India has witnessed a much higher rate of growth. Today we have reached a situation where we grow faster than others in the world. We are expanding the size of our economy. Our revenues are growing and we are finally being able to transfer more resources to the poor to offer them a better quality of life. Our infrastructure in terms of better highways, more airports, better railway systems, better urban infrastructure, surplus power, more port capacity, are growing every year. If this trend continues for the next two decades, India would evolve into a new league.
The essential pre-requisite for accelerating our movement in this direction is that India must have political stability, a clear policy direction, a strong and decisive leadership. If we falter on any one of these, we will be letting down our own people and future generations. India cannot afford lost opportunities at this stage.
India’s federalism
Federalism in India is inherent both geographically and constitutionally. Our Constitution defines ‘India’ i.e. ‘Bharat – a Union of States’. Our States must be fiscally strong. This is the essence of Indian federalism. Equally, if not more important, is the fact that for India to be a Union of States, there must be a strong Union. If there is no strong Union, both India and India’s federalism will stand to suffer. Let there be absolute clarity. India is a Union of States. It is not a Confederation of States. That is the fundamental difference between NDA and the UPA. This is also the fundamental flaw in this idea of the federal front. The framers of the Constitution had a vision. They were men of wisdom. When prominent areas like defence, sovereignty, security of India, foreign policy and eventually the war against terror were maintained as primary responsibility of the Union Government, can India be ever defended without a strong Union? There can be no ‘federal front’ without a strong Central party.
An analysis of the two NDA Governments
The first NDA Government led by Shri Atal Bihar Vajpayee had some significant features. It represented the core of India’s federalism because regions were represented. But there was absolute clarity in terms of the primacy of the BJP, its size too acted an effective nucleus of the coalition. There was clarity that Atalji was the unquestioned leader of the Government. The same was true of the second NDA Government led by Shri Narendra Modi. The BJP had an absolute majority of 282 seats in the 2014 General Elections. Yet respecting federalism, it formed a Government with its allies. The nucleus of the coalition was a large party. There was no completion for leadership. The last word belonged to the Prime Minister. That is how the two Governments functioned. There was clarity in terms of policy and the Government had capacity to take difficult decisions and deliver.
The Mahamilawat Gathbandhan
The Mahamilawat gathbandhan being envisaged is a road to disaster. It is a race to the bottom. There is a tug of war on the issue of leader. Four people have clearly indicated their desire to be Prime Ministers – Shri Rahul Gandhi, Behan Mayawati, Mamata Didi and Shri Sharad Pawar. Each desires to expand his or her own base and reduce that of the competitor. The BSP is trying to maximise its base in Uttar Pradesh and weaken the Congress in several States. The Trinamool Congress is trying to maximise its seats in West Bengal and it won’t go with Congress in that State. It does not want Congress to win any seats in West Bengal. The Congress wants to go alone where it has some strength and is desperate to be in alliances, even with its own opponents, elsewhere. Pawar Saheb wants his ultimate dream to come true and is hoping for a hung Parliament where he has an opportunity to play his cards. Where a proxy leadership battle is visible before the elections, it will be full-fledged war post the elections.
The opportunism in this coalition is writ large. Sections of the Congress and the AAP are talking of an alliance. The AAP was formed as a reaction against the Congress corruption. Today it is pleading with the Congress for an alliance. Shri N.T. Ramarao formed the TDP as an alternative to Congress. Today, the TDP leader Shri Chandrababu Naidu is willing to be the Sarthi of Rahul Gandhi. The Congress and the Left are entering into an alliance in West Bengal. Rahul Gandhi made a fake pretence of an anti-CPM speech in Kerala where they are opponents. Dr. Ram Manohar Lohia was the original creator of the slogan ‘Congress Hatao Desh Bachao’ while Shri Sharad Yadav sits in the Congress lap. Shri Akhilesh Yadav of Samajwadi Party appears to be more Congress than the Congress. They have buried the legacy of Dr. Lohia.
Political stability and policy
The Mahamilawat gathbandhan unquestionably promises only political instability. Such non-ideological alliances have only lasted for a few months. That is the unambiguous lesson of history. The Governments by Chaudhary Charan Singh, Shri V.P. Singh, Shri Chandrasekhar, Shri H.D. Deve Gowda and Shri I.K. Gujral had a life of only few months. Who would want to invest in India in an environment of political instability? Would even Indian investors prefer to go outside and look for more stable countries for investment? Where there is instability, there is corruption. People with brief political opportunities make the best of them. This is the experience of the past.
What would be the policy of a Gathbandhan of this kind? Would every regional party demand a ‘Special Status’ for its State? What would then happen to Central funds which are meant for poverty eradication, the defence and security of India? In order to pamper certain exaggerated regional demands? Would expenditure on Armed Forces have to be cut? What will be their policy on expediting infrastructure creation and the poverty alleviation schemes that Prime Minister Modi has launched? Will a war on terror be the priority of such a coalition or will it lead the battle against terror to a possible depletion of a vote bank politics. Will India be run with a national perspective or by a Government which believes that India is a confederation of States?
What is common between the potential members of the Mahamilawat gathbandhan?
There are a few commonalities between the members’ of the Mahamilawat gathbandhan. Firstly, they have no positive programme. They ride on negativism. They just want to remove one man from office. Secondly, most political groups comprise of dynastic parties and dynastic groups. In some cases, first generation dynast is still in control, in many others the next generation has taken over. These are parties with no inner party structures, no inner party democracy and hence no accountability. Many survive either on cost of regional feelings alone. That is their ideology. Thirdly, most of them have serious allegations of corruption either against the top leaders or against the important members who constitute the Mahamilawat gathbandhan. They are rightly referred to as the ‘Kleptocrats Club.’ Fourthly, they have no ideology or philosophy in common. Pawar Saheb believes in market economy. There are many others, including the Communist, who want a more regulated economy. The Congress President proudly proclaims that he is more Left than the Left. Fifthly, their track record of governance is disastrous. Temperamentally they are too many mavericks in the Gathbandhan.
At the cusp of history, India and Indians have a choice to make. Are they electing a six month Government or a five year Government? Are they choosing between a tried, tested and a performing leader or a chaotic crowd of non-leaders? Is India looking at a Government which accelerates growth, development and poverty alleviation or is it looking for a Government made by persons who excel only at self-enrichment? I am confident that aspirational people of an evolving society will make the right choice.
Posted on 16 March, 2019, No Comments Comments admin
The real strength of India’s democracy is the inherent wisdom of the voters. They know what is in their best interest. They make harsh but correct judgments. They punish non-performers and vote back those who deliver. Pollsters, political pandits and commentators can go wrong. Many catch the trend but never its intensity. It is only on the day of results that analysts discover a wave.
Why do waves occur in an election?
Like-minded people with a sense of fair judgement vote in same direction. Unlike many western democracies, a sizeable section of India’s population is not permanently politically affiliated. They have preferences. Their vote preference varies from election to election. They make a judgement on merits and then vote. When similarly situated people with same preference vote in a direction, it constitutes a wave. Similarly hung assemblies and Parliaments are predicted only in opinion polls. The voter is far more decisive. He endeavours to elect a Government with a clear mandate. The front-runner gets more seats than predicted.
It is this sense of fairness of the Indian electorate that enables it to decide on issues. The voter has a huge potential to distinguish between truth and falsehood. Truth holds. Falsehood falls apart. Political leaders are over-confident of their wisdom. Little do they realise that the electorate is wiser than them. He is capable of punishing those who resort to falsehood.
It is a recognition of the performance of Prime Minister Narendra Modi’s Government that Opposition, after five years, has no real issue against the Government. The Government is contesting on a pro-incumbency performance platform. It is a Government with a leader with whom the comfort level of the voter is high. The Opposition is in a state of panic. It’s single point programme is a negative one – ‘remove one man’. The level of ambition is limited. In the absence of any real issue against the Government, Rahul Gandhi has led not only his party but the entire Opposition to rely on fake and manufactured issues. They raise fake issues, create an echo effect and then believe their falsehood to be true. My purpose today is to analyse each one of these issues.
- Rafale
The Opposition’s fake issue of Rafale is that a costlier combat aircraft has been purchased by the present Government. Favours have been shown to a domestic industrialist and procedural violations have taken place.
Truth:
Both the Supreme Court and the CAG have cleared the deal. They rejected all the above contentions. The Government has saved thousands of crores of the exchequer in the Rafale deal compared to the prices quoted in 2007. All procedures have been followed and not one rupee favour has been shown by the Government to any domestic industrialist. Rafale is not to be manufactured in India at all. The Supreme Court has already examined and cleared this aspect.
- Judge Loya’s death
The Sessions Judge of Mumbai, Judge Loya, was hearing a criminal case in which the BJP President had been falsely made an accused. While attending a wedding in Nagpur, he suddenly died. The opposition claimed that this was an unnatural death and the Supreme Court must appoint an enquiry into this.
Truth:
The Supreme Court heard the petition in a Bench of three Judges, examined each fact and found that he died of a heart attack. There were two District Judges with him when he suffered the heart attack at Guest House. It was these two District Judges, alongwith a Registrar of the Nagpur Bench of the High Court, who took him to the hospital where he was declared dead. A number of High Court Judges reached the hospital. There was nobody there except judges or doctors. Justice D.Y. Chandrachud speaking for the Bench dismissed each allegations as false in nature. Strictures were passed against the petitioners.
- Bank loan waiver
It was alleged by the Opposition that loans worth Rs.2,50,000 crores of fifteen industrialists have been waived by this Government.
Truth:
Not one rupee of loan has been waived. Indiscriminate loans were given during 2008-2014 by Public Sector Banks. They became NPAs. The present Government enacted ‘The Insolvency and Bankruptcy Code’, removed the defaulting managements and have, in the last two years, recovered almost rupees three lakh crore worth of NPAs.
- The EVM issue
The fake issue is that EVM machines are being tampered.
Truth:
India’s Election Commission is an extremely fair and an independent institution. Millions of staff are involved in the process of manufacturing machines and conducting the elections. The electronic voting machines were introduced when the Congress Party was at the power. In the last two and a half decades, dozens of elections have been held where parties have either won or lost. This is nothing wrong with the machines. There is a problem with the political losers. It is the same machine with which the Congress party won the recent Assembly elections.
- Freedom of Speech is being crushed at JNU
It was alleged that by prosecuting those raising seditious slogans on breaking India into pieces at the JNU, the Government is threatening free speech.
Truth:
There is no free speech provided under the Indian Constitution which permits an individual to argue that the country can be broken into pieces. Sovereignty and national security are constitutionally provided restrictions to free speech under Article 19(2) of the Constitution.
- The GST
The GST has been a disaster, alleges India’s Opposition.
Truth:
All Opposition parties have supported the GST Constitutional Amendment and the legislations under it. It was a part of their manifesto. They failed to implement it when they were in power. Finance Ministers’ belonging to Governments run by opposition parties are a signatory to every decision on tariffs. All GST Council decisions are unanimously taken. The GST has simplified India’s complex taxation structure. There is one tax. There are no barriers; there are no inspectors. Small businesses upto rupees forty lakhs are tax exempted. Those with a turnover of rupees one and a half crores can compound their tax by paying at one percent. Collections have gone up and the rate of taxes are brought down in favour of the citizen at almost every meeting.
- Demonetisation was a failure
The Opposition alleges that demonetisation was a failure which caused tremendous hardship to the poor people.
Truth:
Demonetisation caused hard sleep only on the holders of black money. Demonetisation helped in formalising the economy. It compelled anonymous owners of cash to deposit the money in the bank and account for the same pay taxes. It helped in formalising India’s economy, increasing India’s tax base. It hastened the digitisation of the Indian economy. India today collects more taxes at lower rates and uses them for the benefit of the poor.
- Nirav Modi
The Opposition alleges that Nirav Modi was helped by this Government.
Truth:
Nirav Modi started defrauding the banks in 2011 when the UPA was in power. His crime was detected in 2018 by the present Government and its agencies. All his assets have been frozen, criminal cases filed for prosecution and extradition proceedings launched against him. Some assets are being auctioned. It is only a matter of time before India get him to face the consequences in India. Nobody who frauds India can escape.
- Vijay Mallaya
The Opposition alleged that the Government helped Vijay Mallaya.
Truth:
Vijay Mallaya and his company were given loans when the UPA was in power. In fact, banks were directed in 2010 to give a second restructuring of the NPAs of Vijay Mallaya. There is documentary evidence which confirms this. It was on the strength of this restructuring that he got his account regularised and eventually did not pay the bankers. He escaped. No steps against him were taken by the UPA. The NDA have filed civil and criminal litigation against him and succeeded in the extradition proceedings. An appeal against the extradition order is now being heard in the United Kingdom.
- Pulwama and Balakot
The Opposition alleges that the Government is politicising terrorist strike at Pulwama and the Indian Air Force strikes at Balakot in Pakistan wherein the JeM camps were liquidated. These are being used for a political advantage. The Opposition demands that evidence of what happened at Balakot should be placed in the public domain.
Truth:
Our security forces have liquidated innumerable terrorists in the recent months. The terrorists, however, managed to strike at Pulwama. Our security forces liquidated the terrorists within days. On receiving information that a very large terrorist camp was being operated at Balakot in Pakistan, the Prime Minister directed, the Indian Air Force to strike at the camp. The Indian Air Force did a commendable job. It was a perfect exercise. They liquidated the terrorists and the camps. The resisted the counter-attack on the following day by the Pakistan Air Force by pulling down an F-16. The Air Force Chief has confirmed this. Independent satellites quoted by various Indian media organisations conclusively establish the damage done by the strikes. The Indian Armed Forces are extremely professional. They consider it not in the interest of national security and military discipline that the details of military operations should be placed in public domain.
- The Special Status for Andhra Pradesh
The Opposition, particularly TDP alleges that the Government has denied a ‘Special Status’ to Andhra Pradesh as promised.
Truth:
The Fourteenth Finance Commission re-categorised the States. Such re-categorisation does not permit a special status. The Finance Commission Report, which has been accepted, has a constitutional mandate. The Government, therefore, found a way out by which an amount equivalent to what would have been paid under the Special Status would be given to the State of Andhra Pradesh as a Special Package.. The Andhra Pradesh Government thanked the Central Government and welcomed the proposal. Thereafter, it reversed it’s stand for political reasons. Shri Chandrababu Naidu and the TDP need to answer as to why they accepted the Special Package in lieu of Special Status, thanked the Central Government for it and then reversed their stand?
- Institutions
The Opposition alleges that institutions are under threat from the Central Government.
Truth:
The real facts are absolutely to the contrary. It is the Opposition which has been indulging in a mass-intimidation of the judiciary. They even brought an impeachment motion against the erstwhile Chief Justice of India. They put pressure on Judges by threatening to walk out of courts alongwith their allies and lawyer fellow travellers. They intimidate Judges who are not willing to decide in their favour. While the Government and the ruling party have fully respected the Election Commission, it is the Opposition which raised allegations against them. They question the dates on which polling is to be held. They induce communalism on the dates fixed for campaign by invoking the Ramzan argument. They intimidate those media organisations and channels who do not toe their line. Recently, the RJD leader Tejashwi Yadav wrote a letter to Rahul Gandhi suggesting that till elections Opposition parties must boycott electronic media channels.
- Economy
The Opposition alleges that Indian economy is in a disastrous situation and jobs are not being created.
Truth:
India is the fastest growing economy in the world. The average GDP rate of growth in the past five years is about 7.3 per cent. This is the highest ever five year rate of growth in India. Certainly, the fastest growing economy in the world cannot be in a mess. Our macro-economic data is the most prudent ever. Our fiscal deficit and Current Account Deficit are under control. Our foreign exchange reserves are extremely high. Our revenues have grown exponentially. Inflation is under control.
If over a period of five years an economy grows at a rapid pace, its multiplier effect on jobs is very large. The recently released report of the Confederation of Indian Industry (CII) and the data of the Employees Provident Fund Organisation (EPFO) clearly indicates the number of jobs being added, both in the formal and informal sectors. The sixteen crore Mudra loans given have helped the informal sector to grow significantly. There is no social unrest in the country. A high growth and job loss can occur only if productivity levels improve significantly. That does not appear to be the case.
Each one of the above is a fake issue. If fake issues are taken out of Rahul Gandhi’s speech, nothing will perhaps be left. The Opposition is in pathetic state. It has to manufacture fake issues against the Government since the real ones don’t exist. The Opposition underestimates the wisdom of the electorate. I am confident that the electorate will respond to India’s Opposition parties and show them their place.
Posted on 15 March, 2019, No Comments Comments admin
India is the world’s most populous and largest democracy. It is a highly aspirational nation which is also the world’s fastest growing economy. Very soon we will be fifth largest economy in the world. After a decade, it is likely that we will be amongst the top three economies in terms of size alongwith United States and China. We have witnessed an exponential growth of the middle class. The ‘neo middle class’ has emerged at a fast pace.
How does the world’s largest democracy elect its Governments? Should it be on the basis of leadership quality, policy, ideology, performance or should it be on the basis of dynasties and family charismas?
The Congress and the making of a dynastic democracy
Post-Independence, the Congress party was a political group with a galaxy of tall national leaders. Yet Pt. Nehru started grooming his daughter Smt. Indira Gandhi as a successor. He made her the Congress President ahead of many other seniors. This sowed the seeds of an effort by many others to convert India to a dynastic democracy. Smt. Indira Gandhi first encouraged her younger son Sanjay Gandhi to be groomed as a successor but his sudden and unfortunate death prevented that. Thereafter, she groomed her elder son Rajiv Gandhi to be her successor. The Congress tried to remove itself from the shackles of dynasty for a brief period after the unfortunate assassination of Rajiv Gandhi but could not get out of its clutches for long. Smt. Sonia Gandhi then took over as the longest serving President of the Indian National Congress and thereafter passed on the leadership baton of the Party to her son Rahul Gandhi. Thus, generation after generation, the Congress Party’s leadership berth is reserved for a member of the preferred family. When the Party is now in doldrums, another member of the family has entered the scene.
The 1991 change
Conventionally it was only the Congress which was a party controlled by a family. Post-1991, a significant change took place in Indian politics. Most political parties which were created post-1991 converted themselves into dynastic parties. They had no organised structures, no parliamentary board and no decision making bodies. The leader of the party was the head dynast of the family. The succession of the party was within the family. The cadres owed loyalty only to the leader. The leaders were usually charismatic. In most cases the leader amassed wealth. The party was functioned like a personal property of the family. The family took all the decisions. The party became a crowd around a family.
The demonstrative effect of family controlling political parties was that even non-dynastic parties converted their structure into a family owned party. Thus, from Jammu and Kashmir to Tamil Nadu, there are very few political parties which have a structure left. In most cases, an individual controls it. When there is no immediate family, it is either the brother or nephew being groomed. The only parties which functioned outside the family and dynastic principle are the BJP, the Left parties and may be a few smaller ones.
The dynasts believe that oligarchy helps in holding the party together, defines the line of authority and enforces discipline within the party. The ideas of the leader are their ideologies. Even his aberrations and eccentricities are accepted as the ideology. The leader’s dictatorial tendencies are accepted in the larger interest of the party. Many of the leaders of such parties are highly corrupt. Charges of corruption, misdemeanour and even prosecution do not weaken their stranglehold on the party. Survival of the leader in such situations becomes the main political agenda of the party. Even when the leaders are in prison after conviction, their stranglehold on the minds of the cadres remains. When dynasts defect from one coalition to another, the cadres don’t question. They call it an opportunity.
Impact on politics, policy and governance
The impact of this on politics, policy and governance is indeed adverse. Many of these parties are ill-equipped at governance. They win a reasonable number of seats and then claim their partnership share either in a State or the Central Government. They possess the capacity to make a difference in the arithmetic in relation to coalition politics. Since ethics in public life is a major casualty of these leaders/ family owned parties, ethical standards in governance fall. These parties are indifferent to the concept of governance. They have very little interest in policy. Their political stand depends on an opportunity to better their own prospects. They prefer voicing either State issues or populist issues over sound policy. Their policy is to protect their constituency.
Inner party democracy and policy become a big casualty – Horizontal induction of talent into politics also suffers. Many well-meaning citizens get disillusioned with the politics altogether. Some compete for keeping the leader and, at times, his family members, humoured. When parties thrust on themselves or on the polity and even governance, men of inadequate stature, vision and mind, the country suffers. While many found the system of family owned parties to be convenient, others dissented against this practice and wanted a change. They were looking for men of competence, clarity and those who would make a difference. Politics, like nature, abhor vacuum. The acceptance of Shri Narendra Modi at national level, after his tenure as a Chief Minister of Gujarat, was also on account of this popular desire to get rid of dynasties. Much before the BJP’s Parliamentary Board in 2013 announced Shri Narendra Modi as Prime Ministerial candidate, the people of India had accepted him.
The Modi factor
Prime Minister Narendra Modi grew from an extremely humble background. He worked in the party organisation till he was inducted into the leadership. He had to work and struggle for the positions that he got. He earned them. India was changing while the dynasts thought otherwise. If the results of 2014 elections are closely analysed, most caste based parties suffered a blow. Most family owned parties lost. This was not because of Prime Minister Modi’s popularity alone, it was also because India had changed. An aspirational India with multiple modes of communication and knowledge gathering, realised that it is only men of merit, competence and integrity who can arouse public confidence. Mere membership of a family is no criteria. I am confident that this trend will continue in the 2019 elections. Prime Minister Modi and aspirational India will together demolish the concept of families.
Are two dynasts better than one or is it otherwise?
The key question is – will the dynastic parties learn from their 2014 drubbing and a possible defeat in 2019? Possibly not. It is here that the people of India will have to bring about a change. India is not a monarchy. Neither is it a kingdom or dynastic democracy. Dynasts disapprove persons of talent and merit. The real strength of democracy will be realised when myth of dynasties is finally buried and these parties are taken over by men of competence and merit. That will provide Indians with a better choice.
There is another curious feature. Most families where a single dynast created the party, have moved into the next generation. In the next generation, there may be more than one heir. Both the heirs become aspirational and, therefore, the parent dynast distributes the largesse. But recent history has proved otherwise. Confucius had rightly said that just as there can be only one sun in the sky, there can be only one emperor on Earth. Where power sharing between successor dynasts takes place, who is the ultimate emperor? Haryana, Bihar and Tamil Nadu have witnessed the battle of brothers. In Uttar Pradesh, it was father vs. son. Andhra Pradesh earlier witnessed the battle of the sons-in-law. In Karnataka there is an experiment of sons sharing the State and the grandsons sharing the Centre. In Maharashtra, the initial ripples have started. The Congress has undertaken the same experiment. It believes that two owners are better than one. Will Confucius be proved right and history record that one eventually prevailed over the other or will it be otherwise. One failed. The other won’t take-off.
Posted on 14 March, 2019, No Comments Comments admin
Prime Minister Narendra Modi has demonstrated during the last five years his indefatigability by literally working round the clock. Not only has he proved to be a quick learner, adapting easily to foreign policy, economic and strategic issues, his clarity and determination have facilitated quick decisions making even in complicated matters. On policy issues, he sits for hours together with his team, Ministers and officers of various departments of the Government and takes decision in relation to important matters. He sets targets only to beat them. His image as a doer is now recognised by most Indians. Many India observers across the world have marvelled with India’s pace of taking decisions and implementing them. The BJP, therefore, has chosen an effective slogan for the forthcoming elections “Modi Hai to Mumkin Hai” – ‘Modi makes it possible’.
Some of the important landmarks in this direction could be summed up below:
- For the first time in history, for five years in a row, India has been the fastest growing major economy in the world – a ‘sweet spot’ in the global economy.
- For the last five years, neither direct nor indirect tax rates were increased. On the contrary, they were reduced. Those with a net income of upto rupees five lakhs have been exempted from income-tax. Before every meeting of the GST Council, the nation speculates as to which taxes are going to be reduced. Small businesses upto a turnover of Rs.40 lakhs are GST exempted. Those with a turnover upto Rs.1.5 crore can pay one percent GST. Affordable housing is now taxed at one percent. While reducing the burden of taxes, the tax base has expanded and the collections have grown exponentially.
- In a period of twenty months, the smoothest implementation of the Goods and Services Tax has taken place. The Constitution amendment, the taxation laws subordinate to it, the regulations and the tariffs have all been decided unanimously by Parliament and the GST Council respectively. Nobody imagined that India would reduce the rate of taxation and increase the tax collections.
- In 2014, seven kilometres of Highways were built everyday. Today that figure is thirty kilometres per day i.e. more than ten thousand kilometres a year. India has become the largest Highway developer in the world.
- In 2014, only 38 percent rural homes were connected with sanitation. Today 99 percent rural homes are connected with sanitation.
- Ninety-one percent of all villages are connected with rural roads. The expenditure on rural roads has been increased three times.
- Fifty crore of the poorest people in India have been assured hospital treatment upto Rs. 5 lakh a year per family under the Ayushman Bharat Scheme. The Scheme was implemented on 23rd September, 2018 and as of yesterday 15.27 lakh patients have been treated on a cashless basis.
- Eight crore households of the poorest BPL households are being provided with cooking gas stoves and cylinders. India’s poor have graduated from the ancient system of cooking to an ecologically friendly and a more modern system.
- All willing households (100 percent) in India have been electrified.
- About thirty-five crore bank accounts under the Pradhan Mantri Jan Dhan Yojana have been opened connecting every household to the banking system. This is the largest ever financial inclusion scheme in the world.
- More than sixteen crore loans under the Pradhan Mantri Mudra Yojana have been given to encourage self-employment and job creation. 54% of the beneficiaries are SC/ST/OBC/ Minorities. 72% of the beneficiaries are women.
- In 2014, India had 65 functional airports with commercial flights. Today there are 101 airports with commercial flights. This figure is likely to increase by another 50 very soon.
- Indian Railways have now entered the era of superfast 160 km per hour train and locomotives which are domestically manufactured. Very soon the dream of bullet train will be realised. The quality facilitates in rail travel have improved significantly.
- The Bankruptcy and Insolvency Code (IBC) has changed the pattern of creditor-debtor relationship. It has now become possible for the creditors, banks and financial institutions to throw the defaulting management out of control and eventually realise their debts.
- The Aadhaar – the Unique Identity Number, has made it possible that the benefits given by the State to all weaker sections reach them directly and instantaneously without any pilferage.
- In addition to building rural infrastructure, farmers for 22 crops have been assured an MSP of cost plus 50%. Besides a subsidised Crop Insurance Scheme, 12 crore small and medium farmers will get an annual Rs.6000/- as an income support. As of yesterday, 2.77 crore farmers have received the first instalment.
- In addition to a Rs.75,000 crore income support to farmers, Rs.60,000 crore is being spent on MNREGA. This transmits resources to the rural economy.
- Cheap and subsidised food-grain is being provided to the extent of Rs.1.84 lakh crores. No Indian will sleep hungry.
- Every BPL family in rural India will have a house by 2022. Fifty lakh houses are built every year.
- The unorganised sector labour, including farmers will, now be entitled to Rs.3000 pension under a scheme where the Government contributes 50%. This will benefit ten crore families.
- Inflation, which was 10.4 percent during the UPA Government, is down to less than 2.5 percent today.
- The Prime Minister and the Government have shown to the world that it is possible in India to run an honest Government in India.
- For the first time in history, a 10 percent reservation for the economically weaker sections of the non-reserved categories has been given in public employment and educational institutions.
- India has demonstrated, both through the Surgical Strikes of 2016 and Air Strikes of 2019 that rather than merely dealing with terrorism within the country will not suffice. It is willing to adopt unconventional methods of attacking terror at the point of its origin.
The above are only an illustrative list of the kinds of strides India is making. Has any Government done more? It was the same Governmental machinery, the same political system, the same implementation instruments that the Government had at its disposal. It is both the motivation and the leadership which made the vital difference. It is precisely for this reason that India will witness an election where the people will get an opportunity to endorse Prime Minister Modi’s leadership, decisiveness, integrity and performance. Indeed he makes it possible.
Posted on 13 March, 2019, No Comments Comments admin
The situation till May, 2014
India was considered, by both domestic and international investors, as one of the most corrupt nations in the world. India’s credibility on the issue of corruption was at the rock bottom. The banking system had been siphoned-off during the UPA by those who benefitted from ‘phone banking’. India had one of the lowest taxation bases in the world. Evasion was not considered morally or commercially imprudent. It was a normal business practice that the promoter’s equity in a new project would be ‘manufactured’ from the bank debt and then round-tripped either through the Mauritius route or Kolkata shell companies. Spectrum, mineral and other largesse were delivered on the strength of ministerial discretions. Rent-seeking was an established norm. Cash was the preferred mode of political funding. Many found it convenient to keep assets abroad, particularly in tax havens. Most defence transactions were tainted by middlemen close to the power centres.
From the Bofors gun deal to the HDW Submarine purchases, the Airbus transaction, the Augusta Westland deal, the fertilizer scam, the footprints of the Indian National Congress and its leaders were everywhere.
The turning point
Prime Minister Modi’s five year tenure will be regarded by future political historians as a turning point where a movement to free India from corruption began. The Government and its Ministers have conclusively proved that it is possible to run an honest Government in India. Not a single charge of any substance has been made against the Government. Frustrated with the clean image of the Prime Minister and his Government, the Congress leaders resorted to fake allegations but were snubbed both by the Courts and the CAG. The message loud and clear to all is that a ‘new normal’ has now been established in India. If you don’t pay back the banks, you will be out of management. If you escape out of the country, you will be extradited back. If you indulge in round-tripping, you will be found out. Lakhs of shell companies have been closed down. International treaties have been re-written. The Mauritius, Cyprus and Singapore routes which enabled round-tripping, have been closed down. Treaties have been entered with various countries for a real-time exchange of information with regard to assets held by Indians abroad. Ministerial discretions have been abolished. The spectrum, coal mines and other minerals are now allocated through a market mechanism. So are Government contracts. The Government maintains an arm’s length distance from the IBC process in the NCLT. The new promoters are decided by the Committee of Creditors through a transparent bidding process. There has not even been a whisper of allegations that in any of these cases political interference has taken place.
India is today building ten thousand kilometres of National Highways per year. Not one contract has been impugned having been allotted on any collateral consideration. New airports are being allocated by tendering processes. The Government has even formulated a scheme to ensure that even political funding through electoral bonds is done by tax paid money.
Where are the middlemen?
Prior to May, 2014, Delhi was a city flooded with middlemen. They have been rendered jobless. Some have escaped the country. The corridors of North Block and Udyog Bhawan, which were flooded with businessmen and industrialists, are today vacant. As a Finance Minister, not a single person till date has approached me for file pushing. The message is clear – this Government works. It cannot be pushed. The Prime Minister told the bankers in 2015 that not a single call will come to him from either South Block or North Block. We have lived upto that promise. The bank boards have now professionals on them. The days of loan pushers on bank boards are over. All senior executives, CEOs of Public Sector Banks are now appointed through a professional mechanism of the Bank Board Bureau.
The impact on Ease of Doing Business
The Environment Ministry was the hub of all corruption. Files were stacked on tables and not cleared indefinitely. Files even travelled with some Ministers. Today, all applications are online. The permission are granted or refused online. There is no scope for pushing files. It is not without reason that India’s rating for Ease of Doing Business have improved from a horrible 142 to 77. Last year the largest single improvement was done in the matter of building and construction permits. The new byelaws framed by the Government and adopted by most municipalities now provide for an online grant of building permits and permissions to be done within a definite period of time.
The use of technology in taxation
Besides the municipalities, the taxation department was notorious for harassment and corruption. On the direct tax front, returns are now filed online, queries are addressed online and assessment orders are passed online. Even the refund are communicated and delivered online. This year 99.6 percent of all personal income-tax returns filed have been accepted as they are. The CBDT is now working on a project where returns would be assessed and orders delivered within days of the return being filed. There is no interface between the assessing officer and the assessee. Assessees no longer know the name of their assessing officer. They do not send him gifts. The GST has been designed to give the benefit of input credit. This necessarily involves the inputs being purchased from registered dealers or through banking transactions. This is leading to a more gradual formalisation of the economy. For the first time, we have had a Government for five years which has not increased any taxes. On the contrary, it has reduced many taxes and yet significantly increased the tax base and the tax collections. This has enabled greater spending for defence, poverty alleviation and infrastructure.
The Kumbh (2019) vs the Commonwealth Games (2010)
A textbook illustration is a comparison between recently concluded Kumbh at Prayagraj and the 2010 Commonwealth Games. The Commonwealth Games are remembered more for corruption than for the number of medals India won. Projects were delayed; many were incomplete even when the games came to a close. There was mass scale corruption. Many went to jail and their criminal cases are still pending.
The Kumbh 2019 is an excellent illustration of how public funds are effectively and honestly used. A total amount of Rs.4200 crores has been spent. Eight kilometres of ghats, 1.2 lakh toilets, residential camps, pandals to house twenty-four crore pilgrims have been constructed besides improving the city infrastructure. All of 683 projects were completed in time. This year’s Kumbh is regarded as the best ever organised.
The Direct Benefit Transfer
The former Prime Minister, the late Shri Rajiv Gandhi had stated that only fifteen percent of the amount released by the Central Government reaches the beneficiaries. Corruption consumes the balance 85 percent. The Centre would transfer money to the State. The State would send to the money to the Collector, who would then use the machinery of the Tehsildar and the Panchayat Head to handover the State support to the beneficiary. There was pilferage all the way. Aadhar as a unique identity has ensured Direct Benefit Transfer (DBT), which ensures that payments under hundreds of scheme reached the bank of the beneficiary straightway without middlemen. The money is then used by the ultimate beneficiary.
What is the methodology that the Prime Minister and his Government framed to ensure this moral transformation of India?
- No discretions with Ministers or civil servants in commercial matters. Decision to be taken by the market mechanisms.
- Fairness in awards of contract, natural resources and largesse.
- Banks to operate independently without any political interference.
- Anti-black money steps such as the black money law dealing with unlawful assets abroad, placing both direct and indirect tax system on the digital platform, reducing personal interface, lowering the rates, increasing the tax base through compliances and ensuring that anti-evasion measures are strictly implemented.
- The Direct Benefit Transfer (DBT) has ensured that benefits travel directly to the targeted.
- The investigative agencies have to be fair, clean and professional. This has now been implemented.
India has understood that corruption follows the law of Newton’s gravitational pull. It travels from top to bottom and not the other way round. If the leader at the top is honest and has the capacity to ensure similar ethical standards from his colleagues, the moral authority of the Government to ensure integrity travels through the system.
The message today to those who operated improperly in the system are getting to realise that it is safer to be clean. That is the difference between Prime Minister Narendra Modi’s NDA Government and its predecessor UPA.
Tailpiece
While I was finalising this blog, an online site carried a detailed analysis of the unjust enrichment of the extended Gandhi family. While on the subject of cleaning public life, a relevant issue which many people raise with regard to several Indian politicians and their extended families living well without working. The expose with regard to the extended Gandhi family provides you with an answer. While conventionally many may have relied on straightway corruption through bribery, a new methodology has now been established. Wheeler-dealers and fly-by-night operators give you the privilege of ‘sweetheart deals’. With very little investment, windfall profits are thrust on a few privileged ones to enable them to create a capital. ‘Political equity’ results in buying goodwill. It enables you to influence decisions. When exposed, the beneficiaries hide behind the shield of ‘clever business decisions.’ If the ‘capital creation’ of the Congress Party’s first family is subjected to a forensic audit, facts will speak for themselves. Those who live in glass houses should not throw stones.
Posted on 12 March, 2019, No Comments Comments admin
The JeM terrorist attack at Pulwama has brought back into focus the key issue of national security. India is a land of patriotic people. We have a history of valour and sacrifice. India struggled for Independence but with their heads held high. We still find it difficult to digest our humiliation of 1962. We remember the 1965 and 1971 Wars and the 1999 Kargil war with a sense of honour and satisfaction. Indians believe that the country must be secured. The entire nation in one voice has condemned terrorism which cost us the life of two of our former Prime Ministers, besides our security personnel and citizens.
Dangers of linking the battle against terrorism and insurgency with vote banks
Conventionally India condemned any form of terrorism and insurgency in one voice. When a misguided section of Muslim community globally took to terrorism in order to voice their issues, Indian Muslims predominantly refused to be a part of that philosophy. Fortunately for us that trend continues till date. Unfortunately, a few misguided modules in India did emerge. They are dangerous but our security forces overcame most of them.
TADA was legislated when late Shri Rajiv Gandhi was in power. It was used and abused but it continued as a law. After the 1993 Mumbai bomb blast it was widely used against the terrorists, a communal campaign started against this. TADA was dubbed as anti-minority. A campaign for its revocation started. The Narasimha Rao led Congress Government repealed TADA. India which was most adversely impacted by terror was without an anti-terror law which would act as a strong deterrent and contained both procedural and substitutional provisions to deal with crime relating to terror. The Government led by Shri Atal Bihari Vajpayee legislated POTA. It took the Government a joint session of both Houses of Parliament to approve the law. The Congress promised to repeal the law. The distinction between an anti-terrorism and an anti-minority law is significant. The Congress and its allies tried to obliterate that difference. Since then the Congress started going soft on terror. It started an appeasement of terror.
When the Batla House encounter took place and the terrorists were killed, the Congress leaders dubbed it as a fake encounter. The terrorists they claimed were innocent. When the guilty of the 1993 Mumbai bomb blast, 26/11 attack on India’s commercial capital and the Parliament attack case were to be executed, many Congressmen started appealing for amnesty. The ‘disruptionists’ who prefer to call themselves ‘Left liberals’, fought a legal battle to save the terrorists.
The low point in Congress party’s attitude towards separatism and terror was reached when a combination of separatists, jehadis and Maoists ganged up to raise slogans on ‘Desh ke tukde tukde’ at New Delhi’s JNU, the Congress President Rahul Gandhi stood shoulder to shoulder with them to defend their right of free speech to champion the cause of breaking India into pieces. He deviated from the Congress legacy of not associating with these extremists. Once the identification of Congressmen with the Maoists and the separatists was signalled by Rahul Gandhi, it was natural for Congressmen and their friends to support the cause of ‘urban Maoists’ who were allegedly conspiring to assassinate India’s Prime Minister. It is, therefore, not surprising that the new Government in Chhattisgarh, the hub of Left wing extremism, has now taken several decisions, including appointment of committees to effectively examine the ‘misuse’ of police powers against the Maoists. The battle against terror has been weakened on account of Congress party and its mahagathbandhan friends diluting the fight against terror and insurgency for the sake of votes.
Kashmir and terror
The State of Jammu and Kashmir was a foremost victim of terror. The people of Jammu and Kashmir are the worst sufferers. Pakistan never reconciled to Jammu and Kashmir being an integral part of India. It waged wars but lost them. It resorted to encouraging cross border insurgency and supporting domestic terrorists. The Congress had no structured plan during ten years of UPA on how to deal with the problem.
Prime Minister Narendra Modi inherited this as a legacy issue. He experimented the conventional method of trying to soften the relationship with Pakistan in a hope that wiser sense would prevail, but Pakistan responded with Pathankot, Uri and Pulwama. He encouraged the mainstream political parties of the Valley to be a part of the national coalition in Kashmir but unfortunately the double talk of support from Delhi and the pressure from the Jamat-e-Islami were to the detriment of anti-separatists policy.
Pulwama and Balakot
The terrorist strike of Pulwama which cost India the life of 41 CRPF jawans shook the conscience of the whole country. Our security forces have already liquidated some of the major terrorists involved in the Pulwama attack. Post the Uri attack, our forces and the Government have intelligence information with regard to the existence of terrorists training camps along the Line of Control. The Army in September, 2016 conducted the surgical strikes with utmost precision. There was no casualty on the Indian side and those camps were destroyed. We had crossed the LoC for the first time since 1971 war.
Our security forces and the Government again had information through intelligence agencies with regard to a huge terrorist training camp of the JeM at Balakot. On the 26th February, 2019, the Air Force conducted air strikes and destroyed the camp causing severe losses of the terrorist infrastructure comprising of men, material and premises.
By these two actions, Prime Minister Modi had evolved India’s internal security doctrine. Do we fight the terrorists merely on the strength of intelligence information, preventing attacks and diplomatically isolating Pakistan? In such cases, will we be able to ensure a hundred percent success. The odds are loaded against us on this ground. Even if the terrorists succeed only once a year, they make their point. Our intelligence and security has to succeed hundred percent. That is a big challenge. Alternatively, the Surgical and Air strikes evolved a policy that we must attack terror at the point of its origin. In both cases we succeeded. Pakistan realised that there was a severe cost involved if the State continued to patronise terror. The world welcomed our pro-active approach. Pakistan was diplomatically isolated. Its traditional friends were not willing to stand up and defend it.
Political Battle
The BJP led Government, both at the Centre and in Chhattisgarh, had a consistently strong position against the Left wing extremism. From JNU to Chhattisgarh, the Congress has struck a deal with them. There are increasing instances of Left wing extremists actively encouraging the Kashmiri Jehadis in the Kashmir valley. The Congress does not oppose the idea of a pro-active approach in destroying terror at its point of origin. It is disturbed with regard to the political fallout of this pro-active approach on the image of Prime Minister Modi. The Congress is one with the Government on condemning Pulwama but is disturbed about Balakot. Thus it repeatedly rubbishes the surgical strikes. It contends that they have either taken place in the past also or alternatively they never took place under Prime Minister Modi. On the air strikes, their conduct is even more dubious. While giving lip sympathy to the Indian Air Force for the first two days, they started a multi-pronged attack. They questioned the success of the strikes. They started demanding proof that terrorists had died at Balakot. They even contended that the strike had taken place not against terror but to ensure BJP’s victory in the forthcoming elections. This was a self-goal by the Congress in domestic politics. This was also playing into the hands of Pakistan where statements of Congress leaders, including Rahul Gandhi, were played out on television channels in Pakistan. Pakistan Government cited these statements to bolster their own falsehood.
This raises the final question. When India battles ultra-Left and Jehadi terrorists, when it is faced with serious threat of cross border terrorism, how does India respond? This is a choice before the electorate in the 2019 general elections. Can an over-ground ally of Left wing extremism be put in power at New Delhi? Can those who have weakened the battle against terror for the cause of vote bank politics be trusted? Should not those who have played into the Pakistani hands be taught a severe lesson in these elections? Unhesitatingly the answer to the above question is a big ‘yes’. This country is safe and secure under the NDA Government led by Prime Minister Modi.