In PC’s case, putting personal ego ahead of national interest has virtually derailed the economy.
Chidambaram's dream, India's nightmare
P. Chidambaram is probably right. Narendra Modi's knowledge of economics is so scanty, so sketchy, that it can all be written on the back of a postal stamp. Clearly implied in that barb is the claim that the Finance Minister of India himself is an economic wizard. And of what sort is not hard to find. From the top-most corporate honchos to the "aam aadmi" in Chandni Chowk, there is a near unanimity that Chidambaram, the great economic pundit that he is, has presided over the ruin of the national economy. By all accounts, the economy is in the worst crisis since the start of the liberalisation process in the early 1990s. It will be a miracle if growth touches the 5% mark this year. As for Modi, well, the people of Gujarat cannot be fools, having elected him thrice in a row on the back of a very sound management of the state's economy.
Now, if you said that economic experts like Chidamabram are dime a dozen — and, you may like to include in that list Prime Minister Manmohan Singh and his alter ego Montek Ahluwalia as well — but non-experts who actually do an excellent job of managing the economy, for instance, Modi in Gujarat, are hard to come by, you wouldn't be entirely wrong. Small wonder, then, there is a buzz in the country about Modi while Chidambaram is hard put to locate a safe seat for himself, which will return him to Parliament later this year. By the way, whether he won his parliamentary seat last time around fairly and squarely is a question that is yet to be settled by the courts, though his five-year term is about to end.
Since we lay no claim to being economic experts, certainly not in the league of Chidambaram who has the unusual ability to sell "dream budgets", which eventually turn out to be nightmares for the health of the economy, we will stick to the reported facts. Let us begin with the furious pace with which the Finance Minister is engaged in passing the burden of the election-eve goodies to the next government. In order to earn brownie points for containing the fiscal deficit within the budgeted 4.8% of the GDP, he is leaving a huge burden of unpaid bills for the next government.
The under-recoveries of the oil marketing companies alone are said to be over Rs 1.4 lakh crore. Three more LPG cylinders, granted as per the wishes of Rahul Gandhi, will add another Rs 5,000 crore to that Rs 1.4 lakh crore bill on account of LPG, diesel, kerosene subsidies, but which Chidambaram would pass on to the next government. This business of rolling over the expenses to cook up the budget figures is akin to a man who borrows from A to pay B and then tells them to settle the issue between themselves while he himself seeks to leave the scene. Chidambaram may not be even an MP when the next government is formed, considering media reports which said that because of the strong anti-Congress, anti-DMK mood in Tamil Nadu he may opt out of the race altogether. But he is making sure that his successor in Finance does not have an easy time clearing the mess after him.
Even on meeting the budgeted target on current account deficit, Chidambaram has indulged in underhand practices. For, the 10% duty on gold imports only officially reduced the import of yellow metal but unofficially it caused a huge spurt in its smuggling. Encouragement to hawala trade was a clear outcome of the harsh duty on gold imports. Realising his error, he now says he might reduce the duty on gold in March.
Why March?
Because in February he would have exercised the boasting rights in Parliament that he had succeeded in bringing down the trade deficit to the budgeted limits. It is the same "after me, the deluge" syndrome at work. Likewise, the public sector units are being pressured to cough up higher dividends so that the FM can meet the fiscal targets. Coal India Ltd, which has not developed a new mine in years, was made to shell out a record interim dividend of Rs 29 per share, which enriched the national treasury by some Rs 18,000 crore, including the Rs 3,000-crore dividend tax. Likewise, other agencies are under pressure to help the FM meet the 4.8% deficit target.
But at what cost? Outlays across various sectors are slashed, defence purchases are on hold, social sector schemes and infrastructure projects are denied the requisite funding. Even the outlay for the Delhi Metro has been cut. In short, the red line drawn by Chidambaram around that 4.8% target, which he has committed not to cross, has become a millstone for the growth of the economy. Putting personal ego ahead of national interest has virtually derailed the economy.
Meanwhile, do you recall what Chidambaram had said about the Aadhar-based cash transfer scheme? A game-changer. That had earned the Finance Minister bold headlines in the national media. Last week, the UPA government, of which Chidambaram is the senior-most minister, abandoned the direct cash-transfer of LPG subsidy to the targeted groups.
So much then for the efficacy of the self-anointed economic expert!
Chidambaram, lots of people argue not without justification, is all about bluff and bluster without any concrete achievement on the ground. His record in the Finance Ministry fully endorses that view. Look at the number of foreign companies operating in India which are facing trouble at the hands of the taxmen. Is that how you facilitate foreign investment in the country? Why not ensure complete transparency in tax matters so that foreign companies are in no confusion as to their tax obligations?
Haath flatters Kamal
BJP complains that the Congress media campaign, "Mein Nahin, Hum" is a straight lift of its earlier campaign in Gujarat with the very same tagline. The present lot of BJP leaders seem to be unaware that even the catch-phrase in the Congress campaign, Har Haath Shakti, Har Haath Tarakki, is a lift of its media campaign way back in the 1974 UP Assembly campaign. The Jana Sangh, the BJP's previous avatar, had gone into that election on the slogan of "Har Haath Ko Kaam, Har Khet Ko Paani". It did not work for the Jana Sangh. Will it now work for the Congress? We have strong doubts.
In-your-face populism
You have to grant it to the politicians. They will do anything to try and win elections. Consider this. In Maharashtra, they have reduced power tariffs by 20%, but not for an unspecified period in the future. No. Only for ten months, between January and October 2014. What is so special about that period? A lot, if you consider that both the parliamentary and Assembly elections would have been held by the end of October. By then, a fresh hole of over Rs 7,000 crore would have been dug in the budget of the already bankrupt state, which is already saddled with a debt of nearly Rs 3 lakh crore.
http://www.sunday-guardian.com/analysis/modi-is-no-economist-but-his-performance-better-than-pcs
Narendra Modi vs Manmohan Singh: Comparison of one-year performance as prime minister
New Delhi, May 11: The economy rebounded; exports and imports declined, foreign-exchange reserves grew; coal production, electricity generation and petroleum consumption rose, non-performing assets (NPAs) in banking soared.In seven of 12 indicators evaluated by IndiaSpend, the data reveal a similar trend – a reasonable economic performance after an economic downturn. The large variations in the first-year period centre on.
Industrial production: In Modi’s first year, the index of industrial production (IIP) for eight core sectors (coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity) grew 5 percent during 2014-15 against 4.2 percent the previous year. In Singh’s first year, the IIP for six core industries (crude oil, refinery products, coal, electricity, cement and finished carbon steel) grew 10.4 percent, compared to 2.8 percent in the previous year 2008-09.
Exports and imports: In terms of dollars, exports and imports declined 2 percent and 0.5 percent, respectively, in 2014-15 from 2013-14. In Singh’s first year (of his second term) exports and imports declined far more sharply, 4 percent and 5 percent, respectively, in 2009-10 compared to 2008-09.
Nuclear energy: With the commissioning of the Kudankulam Unit-1 of 1,000 mw in Tamil Nadu during December 2014, India’s installed nuclear capacity reached 5,780 mw in 2014-15 from 4,780 MW in 2013-14, an increase of 21 perccent. In 2009-10, it was up 10.6 percent from the previous year.
Direct comparisons are difficult, considering that Singh was in his second term in office. Modi carries Singh’s economic legacy, which worsened considerably by the end of the term, attributed by observers to a global downturn and misgovernance. But these indicators offer a broad statistical evaluation of the first years of Modi and Singh during UPA2.
A journey through the numbers. Economic Growth: Overall gross domestic product (GDP) growth in 2009-10, at constant prices, was reported to be 8.9 percent. After a change in calculation and base year, GDP growth isestimated to be 7.4 percent for 2014-15.
Agriculture: Agriculture, which employs about 600 million Indians, registered growth of 1.1 percent in 2014-15 compared to 0.8 percent during 2009-10. The numbers indicate a long-standing – and worsening – crisis.Foreign-exchange reserves: Forex reserves increased 12 percent from $341 billion at the end of 2014-15 as compared to $304 billion at the end of 2013-14. For Singh in UPA2, they increased 5.4 percent from $241.7 billion at the end of 2008-09 to $254.9 billion in 2009-10.
Coal: Coal from India’s mines increased 8.2 percent in 2014-15, later falling into a controversy over botched allotments, one of the reasons for the decline in UPA2′s image. In 2009-10, production increased 8.1 percent. Performance of the coal sector is expected to improve with the re-allotment of 67 coal blocks through an auction, although Modi’s figure of Rs.2 lakh crore ($31.25 billion) windfall is now contested
Petroleum: In 2014-15, consumption of petroleum products (diesel, petrol, LPG and the like) increased 3.1 percent, compared to 3.2 percent during 2009-10. India’s demand for petroleum products is expected to grow 3.3 percent in the next financial year, according to the oil ministry.
Electricity: A good indicator of an economy’s health, installed electricity capacity in 2014-15, rose 10 percentagainst 2013-14. In 2009-10, it increased 7.7 percent over the previous year.Renewable energy: With pressure on India to cut carbon emissions renewable energy – it is responsible for 12 percent of India’s total installed power – growth rates were high during both terms. The total installed capacity of renewable energy reported a 7.56 percent growth in 2014-15 and growth of 17.20 percent in 2009-10.
Non-performing assets: NPAs of public sector banks increased 17 percent from Rs.2.27 lakh crore in March 2014 to Rs.2.73 lakh crore in December 2014, a carry-over from UPA2. Public sector bank NPAs had increased 23 percent in 2009-10 over the previous year. NPA growth rates of this magnitude can destabilise the banking system.
One year of Narendra Modi govt: Expectations were unrealistically high-Financial Express
One year of Narendra Modi govt: Jokes sometimes have a way of capturing truth more effectively than analysis.
By: Pratap Bhanu Mehta
Jokes sometimes have a way of capturing truth more effectively than analysis. The measure of the present government is captured by this one going around: What is the difference between the UPA and the NDA? In the UPA we had a government and no prime minister; in the NDA we have a prime minister and no government. This has an element of cruel exaggeration. But it highlights the central tension of one year of Narendra Modi’s government. The PM is still riding relatively high in public popularity. But the government is looking very ordinary. Areas where he devotes inordinate attention like foreign policy have some sense of purpose.
Occasional schemes done in mission mode like Jan Dhan Yojana achieve their targets. There is a sense that overall transactional corruption at high levels is, at the moment, down. There is still an air of expectancy around big legislation like the goods and services tax. But government as a whole is floundering, getting tripped on execution and detail.
Admittedly, the expectations of the Modi government were unrealistically high. The inherited regulatory and administrative mess that the UPA had left were never going to be easy to clean up quickly. But Modi was also very lucky. He got the single biggest windfall any leader can want in terms of lower global energy prices, which automatically tempered his challenges on inflation and subsidies.
The government’s economic performance has been disappointing. Contrary to the prime minister’s own rhetoric, there is almost no decision that this government has taken that one could call bold. Some of the new welfare measures, like old age pensions and insurance, are necessary. But they are, in comparison to UPA’s welfare schemes, hardly trail blazing. The rationalisation of subsidies (other than petrol, started under UPA) has barely begun. With the continuation of Aadhaar a potential platform for a more rationalised welfare state is in place; but the future shape of welfare is still uncertain. Rather than being fixated on poverty lines the governments framework is rightly focused on access to key elements of inclusion, including power and infrastructure.
But the government is sending mixed administrative and financial signals on social sector spending. This will cost it political capital: In a time of stagnant rural wages, which are dampening demand, MGNERGA was the only instrument the government had for alleviating short-term agrarian distress. Demand is stagnating, and will not revive without an increase in rural incomes.
Second, the UPA brought the economy to a grinding halt by a combination of legislative hubris and lawyerly casualness. This government risks falling into the same trap. The finance ministry’s credibility to tax issues is, rightly, sinking to a new low and it will take time to recover. This session it did pass some significant legislation on insurance, mining, coal. But its strategy on two major pieces of legislation, land acquisition and GST, is perplexing.
The Land Acquisition Act of 2013 needed some amendment; but the government’s approach has been ill advised.
Instead of a sensible, workable middle ground, it is trying to move the clock back to 1894. It has also needlessly lost political capital in the process. The GST, when passed, will be a game changer. But it is inexplicable how the government has not done enough to ensure that the full efficiency gains from GST are realised. Not doing away with interstate levies risks, as one commentator described it, producing a moth-eaten legislation. Third, on almost every regulatory issue, from taxation to the environment, the Centre has steadily produced more uncertainty rather than less. It does not seem to have the support structures that can create modern 21st century regulation.
Third, this government’s speciality was supposed to be execution. In some ministries like the railways, there is a promising new energy; the ministry of power at least got Coal India to shape up on the production front. But the ability of this government to get public investment out of the door, a crucial element in getting growth up, has yet to be demonstrated. As FE reported earlier this week, there has been a decline even in public tenders for big infrastructure projects. The government does not yet have a credible plan for reviving stalled projects, most of which are not stalled because of land acquisition problems.
Fourth, the government’s biggest and unconscionable failures are on health and education. Admittedly, the mess in these sectors was also inherited. But these are two sectors where there is not yet even an indication of a framework to solve deep problems in this sector. The financial commitment to both these sectors is tepid in relation to the need; the regulatory frameworks are a complete mess; and the air of ad hocism and uncertainty makes for a dismal future for these sectors.
There is a sense that the prime minister wants to fly high. But whether the government has the engine power to support him is an open question. Since the economy is chugging along, helped by favourable external conditions, the weaknesses of this government will remain disguised for a while. But it needs to get its act together, before the winds blow a sputtering engine off course.
A nationwide India TV-C Voter opinion poll, telecast on Monday, said that external affairs minister Sushma Swaraj leads the Union ministers in terms of performance.
"In a severe dent to Prime Minister Narendra Modi government's image, a whopping 78 per cent of the people who responded to a nationwide India TV-C Voter opinion poll have demanded that the centre should withdraw the controversial land acquisition bill," said an India TV release.
It said that 63 per cent of the respondents conveyed that Modi government's image at present appears to be anti-poor and anti-farmer, while as many as 48 per cent of the respondents said that Prime Minister Modi's popularity has declined in the last one year.
Giving region-wise break-up, the survey said 65 per cent of respondents in north India, 52 per cent in the west, 34 per cent in the east, and 38 per cent in the south felt that Modi's popularity has declined.
"External affairs minister Sushma Swaraj led the Union ministers in respect of performance, with 56 per cent saying her performance was 'good', 31 per cent terming it 'average' and 13 per cent rating her performance as 'poor'," the release said.
She was followed by home minister Rajnath Singh, whose performance was rated good by 50 per cent of the respondents, average by 36 per cent and poor by 14 per cent, and finance minister Arun Jaitley (49, 28 per cent and 23 per cent respectively).
On the other hand only 44 and 40 per cent respectively held human resource development minister Smriti Irani and surface transport minister Nitin Gadkari's performances as "good", 35 and 38 per cent respectively as average and 21 and 22 per cent as poor.
As many as 59 per cent of the respondents said they were satisfied with Modi's one-year rule, but 41 per cent said they are not, the survey said.
The breakup was a whopping 82 per cent in eastern India, 59 per cent in the south and 57 per cent in the west but only 44 per cent in north India.
On specific issues, 64 per cent said inflation has not dipped during the last one year while a similar number said they were satisfied with the government's efforts to bring back black money.
The survey said 51 per cent of the respondents said that corruption has declined in the last one year.
Asked about Modi's schemes they considered the best, 46 per cent opted for Swachh Bharat, 19 per cent opted for Jan Dhan Yojana, 18 per cent liked 'Make in India', 11 per cent opted for 'Saansad Adarsh Gram Yojana' and six per cent for none of above, the release added.
Asked about the effect of Modi's performance on the forthcoming Bihar assembly polls, 52 per cent said that it will have "a good effect" while 45 per cent replied in the negative.
Occasional schemes done in mission mode like Jan Dhan Yojana achieve their targets. There is a sense that overall transactional corruption at high levels is, at the moment, down. There is still an air of expectancy around big legislation like the goods and services tax. But government as a whole is floundering, getting tripped on execution and detail.
Admittedly, the expectations of the Modi government were unrealistically high. The inherited regulatory and administrative mess that the UPA had left were never going to be easy to clean up quickly. But Modi was also very lucky. He got the single biggest windfall any leader can want in terms of lower global energy prices, which automatically tempered his challenges on inflation and subsidies.
The government’s economic performance has been disappointing. Contrary to the prime minister’s own rhetoric, there is almost no decision that this government has taken that one could call bold. Some of the new welfare measures, like old age pensions and insurance, are necessary. But they are, in comparison to UPA’s welfare schemes, hardly trail blazing. The rationalisation of subsidies (other than petrol, started under UPA) has barely begun. With the continuation of Aadhaar a potential platform for a more rationalised welfare state is in place; but the future shape of welfare is still uncertain. Rather than being fixated on poverty lines the governments framework is rightly focused on access to key elements of inclusion, including power and infrastructure.
Second, the UPA brought the economy to a grinding halt by a combination of legislative hubris and lawyerly casualness. This government risks falling into the same trap. The finance ministry’s credibility to tax issues is, rightly, sinking to a new low and it will take time to recover. This session it did pass some significant legislation on insurance, mining, coal. But its strategy on two major pieces of legislation, land acquisition and GST, is perplexing.
The Land Acquisition Act of 2013 needed some amendment; but the government’s approach has been ill advised.
Instead of a sensible, workable middle ground, it is trying to move the clock back to 1894. It has also needlessly lost political capital in the process. The GST, when passed, will be a game changer. But it is inexplicable how the government has not done enough to ensure that the full efficiency gains from GST are realised. Not doing away with interstate levies risks, as one commentator described it, producing a moth-eaten legislation. Third, on almost every regulatory issue, from taxation to the environment, the Centre has steadily produced more uncertainty rather than less. It does not seem to have the support structures that can create modern 21st century regulation.
Third, this government’s speciality was supposed to be execution. In some ministries like the railways, there is a promising new energy; the ministry of power at least got Coal India to shape up on the production front. But the ability of this government to get public investment out of the door, a crucial element in getting growth up, has yet to be demonstrated. As FE reported earlier this week, there has been a decline even in public tenders for big infrastructure projects. The government does not yet have a credible plan for reviving stalled projects, most of which are not stalled because of land acquisition problems.
Fourth, the government’s biggest and unconscionable failures are on health and education. Admittedly, the mess in these sectors was also inherited. But these are two sectors where there is not yet even an indication of a framework to solve deep problems in this sector. The financial commitment to both these sectors is tepid in relation to the need; the regulatory frameworks are a complete mess; and the air of ad hocism and uncertainty makes for a dismal future for these sectors.
There is a sense that the prime minister wants to fly high. But whether the government has the engine power to support him is an open question. Since the economy is chugging along, helped by favourable external conditions, the weaknesses of this government will remain disguised for a while. But it needs to get its act together, before the winds blow a sputtering engine off course.
Sushma Swaraj 'best' minister in Modi government: Survey-Times of India
NEW DELHI: A whopping 78 per cent of respondents have demanded the NDA government withdraw its land acquisition bill, said an opinion poll released on Monday, with nearly half of the those surveyed saying that Prime Minister Narendra Modi's popularity has declined and 63 per cent saying that his image appears to be anti-poor and anti-farmer.A nationwide India TV-C Voter opinion poll, telecast on Monday, said that external affairs minister Sushma Swaraj leads the Union ministers in terms of performance.
"In a severe dent to Prime Minister Narendra Modi government's image, a whopping 78 per cent of the people who responded to a nationwide India TV-C Voter opinion poll have demanded that the centre should withdraw the controversial land acquisition bill," said an India TV release.
It said that 63 per cent of the respondents conveyed that Modi government's image at present appears to be anti-poor and anti-farmer, while as many as 48 per cent of the respondents said that Prime Minister Modi's popularity has declined in the last one year.
Giving region-wise break-up, the survey said 65 per cent of respondents in north India, 52 per cent in the west, 34 per cent in the east, and 38 per cent in the south felt that Modi's popularity has declined.
"External affairs minister Sushma Swaraj led the Union ministers in respect of performance, with 56 per cent saying her performance was 'good', 31 per cent terming it 'average' and 13 per cent rating her performance as 'poor'," the release said.
She was followed by home minister Rajnath Singh, whose performance was rated good by 50 per cent of the respondents, average by 36 per cent and poor by 14 per cent, and finance minister Arun Jaitley (49, 28 per cent and 23 per cent respectively).
On the other hand only 44 and 40 per cent respectively held human resource development minister Smriti Irani and surface transport minister Nitin Gadkari's performances as "good", 35 and 38 per cent respectively as average and 21 and 22 per cent as poor.
As many as 59 per cent of the respondents said they were satisfied with Modi's one-year rule, but 41 per cent said they are not, the survey said.
The breakup was a whopping 82 per cent in eastern India, 59 per cent in the south and 57 per cent in the west but only 44 per cent in north India.
On specific issues, 64 per cent said inflation has not dipped during the last one year while a similar number said they were satisfied with the government's efforts to bring back black money.
The survey said 51 per cent of the respondents said that corruption has declined in the last one year.
Asked about Modi's schemes they considered the best, 46 per cent opted for Swachh Bharat, 19 per cent opted for Jan Dhan Yojana, 18 per cent liked 'Make in India', 11 per cent opted for 'Saansad Adarsh Gram Yojana' and six per cent for none of above, the release added.
Asked about the effect of Modi's performance on the forthcoming Bihar assembly polls, 52 per cent said that it will have "a good effect" while 45 per cent replied in the negative.
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