Sunday 23 August 2015

It’s jobs, and not sainthood, that count (Sunday Guardian)

M.D Nalapat is the Editorial Director of The Sunday Guardian.
It’s jobs, and not sainthood, that count
It is time for Modi to show the same innovation in his economic principles that he has shown in foreign policy matters.
hose who have been tracking Narendra Damodardas Modi since 2001, and few even earlier, have mostly been surprised at the difference between his foreign policy initiatives and the manner in which the Prime Minister has been tackling the domestic problem of the economy. By 2022, India will have as many citizens as China, with barely a fifth of that country's gross output. Unemployment is an illness that works steadily and insidiously on the determination of an individual, with prolonged periods draining it away and often replacing effort with ennui. The jobless are fodder for extremist groups of all faiths, as witness what took place in Germany in the 1930s. A country that had gifted the world some of its finest musicians and philosophers, morphed into a nation run by thugs, with hundreds of thousands joining in the annihilation of the innocent. If we consider how many inventions useful to humankind were developed by Jewish minds, the scale of the loss becomes clear. Those six million Jews murdered by Hitler and his party could, had they been alive, created countless additional works of art, literature and science to enrich the world. The spiralling cost of bread was a key driver of the "Arab Spring", much more potent than any mass reach-out towards democracy, as otherwise organisations such as the Muslim Brotherhood could not have been elected to office in an ancient country such as Egypt, of course, with a nudge from the United States and its NATO allies. For Prime Minister Modi, the first three items in any ten-point agenda needs to be jobs, jobs and more jobs. The top layer of decision makers in government, including politicians holding paid office in legislatures, Parliament and elsewhere, need to be intensively — and subtly — monitored, and wrongdoers punished rather than be allowed to continue in their posts. The IAS is an organisation having several who have the will to effect changes beneficial to the public. However, it needs to be changed from the present form, in which promotions have become a matter of ritual, and horizontal entry from elements of civil society barred. In foreign policy, it is apparent that Prime Minister Modi followed his own instincts rather than the diktat of officials, although on matters relating to fiscal and monetary issues, he seems to be going by the consensus evolved by officials, rather than following his instincts. Hence the paradox of a Modi government continuing with the high tax, regulation and interest rate regime of its predecessor. The best way to double and then again double the number of those in the formal tax net would be to lower rates, while an effective way to boost the service economy, on which so many jobs depend, would be to slash rates rather than boost them. Not only are high interest rates making the products of Indian businesses non-competitive, so are tax rates. Prime Minister Modi has not favoured any particular business house over others, as a look at balance sheets would reveal. However, he needs to do more, for example, by asking government banks to convert long-outstanding loans in selected companies into equity and disposing these of in the market in a fashion designed to avoid a slump in prices.
The top layer of decision makers in government, including politicians holding paid office in legislatures, Parliament and elsewhere, need to be monitored and wrongdoers punished rather than be allowed to continue in their posts. 
While the babus of the Finance Ministry still believe in the P. Chidambaram model, their counterparts in the Home Ministry seek to make this country even less welcoming of individual liberty than it was during the UPA period. How else to explain the focus on pornography at a time when attention ought to be on the multiplying websites attracting youths to ISIS and like ideologies? As for the Telecom Ministry, it was a shock to see its defence in the Supreme Court of 66A of the Information Technology Act, so to expect it to defend net neutrality in the absence of a public outcry against efforts to dilute it would be unrealistic. As for the Law Ministry, officials there need to read their Constitution of India, and try and reconcile the thrust of this with their UPA-style defence of colonial laws such as Criminal Defamation. What is one to make of BJP-ruled Maharashtra, where diet is regarded as being as much a responsibility of the state as it is in Somalia or Afghanistan and where even those who are married are made the subject of unwelcome attention by the police if they so much as hold hands in public? While zealots are welcome to seek — through peaceful and non-intrusive persuasion — to seek to convert the 1.26 billion people of India into saints, the Prime Minister and his party will be principally judged by the success or otherwise of his economic policies. It is, therefore, time for Narendra Modi to show in his core economic policies the same spirit of innovation that he has displayed in matters of foreign policy.

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