PM Modi poised to speed up change (Sunday Guardian)
In economic policy, an often unremarked aspect has been the consolidation of the banking system.
Prime Minister Narendra Modi’s achievements resemble an iceberg, in that very little is visible above the surface, despite 24/7 efforts by the I&B Ministry to showcase his successes. Among the most consequential is the breakthrough in relations with both global superpowers, the United States and China. Some days ago, through the US Consul-General in Kolkata, the Barack Obama administration affirmed in an unprecedented remark that Arunachal Pradesh “was an integral part of India”, thereby distancing Washington from Beijing’s claim to the Indian state. Thus far, bowing to pressure from the Pakistan army, which is nervous at the geopolitical consequences for itself (as a hedge, against India) of a Sino-Indian border settlement, the Chinese side has refused to allow progress on even an agreed marking of the 3,488-kilometre border. Meanwhile, again in an unprecedented gesture, the Indian Navy sent a flotilla of naval vessels through the South China Seas to make goodwill visits to Vietnam and the Philippines. Rather than register its objections, Beijing openly saw the move as innocent of any hostile intent, clearly confident that India was not considering China as a future target for military operations. The credit for such an upswing in relations between Delhi on the one hand and Beijing and Washington on the other vests with the personal diplomacy of Prime Minister Modi, who has developed a close personal rapport between himself and both Barack Obama as well as Xi Jinping.
Although several within the strategic community regard the supply of F-16s to Pakistan as much less of a threat to India than has been made out in Delhi, the blowback from that decision has resulted in a temporary freeze on the supply of the aircraft, even while annual assistance to the Pakistan military (which is kept going largely on the charity of countries such as China, the US and Saudi Arabia) has been reduced to $500 million. A further sign that Washington is in the process of seeing Delhi as its key ally in the region was the drone strike which killed Mullah Mansoor, a terrorist asset protected by the ISI. Should Prime Minister Modi’s coming visit to the US next month result in fresh breakthroughs in the relations between the two largest democracies, the odds are rising that such individuals as Masood Azhar and Hafiz Saeed may be next on the hit list in view of their numerous operations targeting civilians in Afghanistan and India. And despite pressure from arms lobbies worried at the impact on their clients should India sign three foundation defence agreements with the US, the momentum seems in favour of such a decision being taken before Barack Obama steps down as President of the US in the initial days of 2017. In the case of China, Prime Minister Modi is likely this year itself to ensure that the bureaucratic obstacles to Chinese investment and tourist footfalls, mainly by the MHA, be removed. An example of bungling is the giving of only single-entry e-visas, which has resulted in the stoppage of applications by many Buddhist tourists, who need to visit Nepal and the historic sites there during their pilgrimage within the subcontinent. Another killer in the e-visa scheme is the disallowance of group visas, thereby shutting off a major chunk of footfalls. Across the government, several such—often deliberate—policy distortions are being removed by Prime Minister Modi, who is looking into the operations of all corners of the government on a regular basis.
Despite Islamabad’s efforts to portray him as anti-Muslim, Modivian diplomacy has shown this allegation to be false, with the Prime Minister making very successful visits to Qatar, the UAE, Iran and Saudi Arabia. Should these be followed by steps such as introducing Islamic banking in India on the same lines as is being done in the City of London, investment in the tens of billions of dollars is expected to flow from the GCC to India, although those opposed to such financial synergy may seek to use the courts to slow down progress in economic cooperation between the GCC and India and between Iran and India. In the case of the latter country, rather than dealing directly with Iran, a future US administration may prefer to see Delhi to be the intermediary ensuring cooperation with Tehran in matters such as cleansing Afghanistan of Wahhabi terrorism. The Prime Minister has visited 50 countries in less than two years, thereby raising the geopolitical stature of India across the globe to the same level that was the case in the early 1950s.
In economic policy, an often unremarked aspect of policy since 26 May 2014 has been the consolidation of the banking system, the start having been the merger of six state banks into the SBI. The toxicity of the ocean of bad loans given under political command in the past is being slowly reduced by a more honest declaration of NPAs and the possible consolidation of 29 public sector banks into around a dozen in the future. Steps have been taken to improve the regularity environment, as for example by raising the bar for declaration of a factory from 20 to 40 or more workers, although experts say that 100 is a more practical limit. Labour Minister Bandaru Dattatreya has been encouraged to stop dabbling in campus matters and focus on the trade unions, several of which he has been meeting during the past months.
Groups outside the country are intent on using unions to paralyse the economy and create chaos, hence the importance of ensuring that trade union leaders, who are among the most sincere and patriotic citizens of the country, be kept informed of the ways in which the lives of their members are being sought to be improved by the government, sometimes in the form of reducing or eliminating the role of the state in corners of business activity. Overall, as took place in China during the 1980s, there is an emphasis on the upgrading of infrastructure, with the Sagar Mala matrix of 25 coastal hubs being an example, as also the building of more roads and development of smart cities.
For decades, much of the country’s farm produce has been lost through wastage, and this is sought to be reversed through the setting up of agro-processing clusters from Punjab to the Northeast, with an expansion later into other parts of the country, so that farm produce gets rescued from wastage, as indeed is already taking place in the case of electric power. Silently, efforts are on to reduce and finally eliminate Wahhabi terror as well as Maoist violence, although both of these are long-term projects that will take about a decade to be wholly successful. Border security is being looked into by the Prime Minister, and gaps are getting filled. Now that Assam has come into the BJP’s kitty, it is expected that infiltration from Bangladesh will get substantially reduced.
Overall, much has been done, although much more remains to be achieved. Judging by the experience of the 12 Gujarat years, the first two years in government of Narendra Modi are, in a sense, “on the job training” for the tasks ahead, this time not at the state but at the Central level. After that, change accelerates, until by the end of the fourth year, the “National Modi Model” becomes wholly operational.