By S. Sivathasan –
By any measure six months are but a flicker in a government’s tenure. Prime Minister Modi has made them look long. By crowding events and achievements within a short span he has made it so. Where are they? They are on two Fronts; Administrative and Economic. Confining to these two areas and that too only in passing, no broad survey is attempted.
Modi had the good fortune of getting into his hands in May 2014, as many as 430 projects which had gone past approvals up to the penultimate. The several million technical hours spent, from pre-feasibility studies to project formulation and detailed project report can be estimated or imagined. They had a total cost of a colossal Rs 20 trillion on which the previous government was sitting. They were all embroiled in the final hurdle primarily of environmental clearance. The UPA government did not have the strength of mind to say boo to the environmentalists, shunt them out of their way and to keep them in the loop. Besides green clearance, there were dilatory issues of land acquisition and coal licenses. From day one Modi government displayed its force of character to clear them all. Environmental considerations were not overridden, but decisions on hold were taken. Verve effusing from nascent energy of a new government accomplished it.
Projects in Motion
If projects are moving now, why not earlier? Congress government had its share in the war effort against the Tamils in SL. Retributive justice is unrelenting in its pursuit. It grips a person and a nation alike. An individual gets immobilized by a stroke. Policy paralysis struck down the Congress government for five years. Lack of movement was the malaise. GDP regressing from 8.5% growth to 5% by 2014 was an index of the malaise. The nation which was stuck in the mire got anchored in it and in the five years of paralysis, inaction became the norm. When the ship floundered, she went in for a new helmsman in 2014.
In the last phase of UPA rule, when 430 projects awaited clearance, 42% out of them were held up on environmental protests. A large power project of 3,000 MW installed capacity first mooted in 2008 and held up for 6 years is among those cleared. Most projects cleared are now in motion as affirmed by the Additional Secretary of the Cabinet Secretariat, who heads the Project Monitoring Group. More striking than orders of magnitude is moving determinedly away from the debilitating phase of immobility. A sea change in moving forward is empowering states in the clearance process. Federal India long crushed by the weight of the centre is getting a feel of the substance of federalism.
Narmada Dam Project
A very rational decision taken on 12 June 2014, by the Narmada Control Authority (NCA) was to raise the height of the dam by 17 metres. Such an increase will provide assured irrigation to an additional 1.632 million acres. Besides, it will augment power generation by 40%. This decision pending for 6 years, was taken within 22 days of Modi assuming office as PM.
What is the history of the Narmada Dam Project? Serious study of the basin from 1947. First proposal made in 1959. Nehru laid the foundation stone in April 1961. Full scale construction started in 1987. Dam with a height of 121 metres completed in 2006. Against this pace should be matched 22 days. This is the current tempo. When the CM Gujarat heard of the decision, she rushed to the dam site, performed a pooja and told the officials that not a day should be lost in execution. She had caught the infection.
To digress a little; The canal network of tanks on Narmada at 75,900 kilometres will be the longest in the world. It is at this dam that the tallest statue in the world will be erected. It is in honour of Sardar Patel. The statue is of iron and Modi would say, to signify “Muscles of iron and nerves of steel”, which Patel really was.
Modi and Arun Jaitley have assimilated more than fully “Diplomacy without arms is like music without instruments”. Frederick the Great said it and Bismarck lived by it. Music rich India is taking to it with ease. One cannot forget the stance of India put forward by the then Defence Minister VK Krishna Menon in the Goa war in 1961. He put forward forcefully and cryptically “India never abjured violence when it came to protecting her interests”. In a Jataka tale a Buddhist monk gives sound advice to an injured snake. If you have turned ahimsic, you need not have stung the man, but ”at least why didn’t you show your hood?” India did not show her hood for ten years or more. India has now started living by her stature. Road building in Arunachal Pradesh ignoring China’s concerns and prospecting for Vietnam’s oil in South China Sea are assertive postures. So is the offer to Vietnam of modernizing her army. For such music, instrument collection has begun in earnest.
With a view to boosting India’s defence preparedness, clearance has been granted and funds provided for a massive programme. The Defence Acquisition Council (DAC) chaired by Arun Jaitley, Minister of Defence has cleared a set of deals to the tune of Rs 800 billion equivalent to $ 13 billion. Of this sum, Rs 500 billion are for 6 new conventional standard submarines all to be built under the overarching current policy of ‘Make in India’. The DAC is mandated to identify a shipyard within 8 weeks. Building them will take 8 years. It may be recalled that in 1999 Cabinet approved a “30 year submarine construction plan” to build 24 conventional submarines. Not a single was inducted for 15 years. Yet in the remaining 15 years it is proposed to build all 24. It may be mentioned that the knots in which the state apparatus was tied are getting shredded.
As important are missile systems and several others to be manufactured with a condition for technology transfer. What cannot be made in the short term will be imported. Premium value is being placed on cutting edge technology and to make in India. One can recollect that around 1960, Krishna Menon placed emphasis on indigenous production. Yet India is the world’s largest arms importer now. In a decade it will be history. The decision maker makes that decisive difference. It should however be noted that preceding sound decisions is an enabling environment that is multi-dimensional. It did not exist then but certainly prevailed at the turn of the century.
The First Budget
It was simply not possible for the first BJP budget to be any different from what it was. It was disappointing but not irretrievable was one comment. A strong compulsion was not to heap unpopular measures on all those with unrealistic expectations. Political prudence and economic dictates needed an interim marriage. Real work awaits the next one. The ground is getting prepared. Petroleum subsidy touching a trillion rupees has been deflected and subdued with deregulation. Political consolidation in the countryside is now manifest with startling victories in Haryana and Maharashtra. The state visits of the PM were a resounding success. So did the visit of the Chinese President in adding a stimulus to India. Months back decks were cleared for coming changes. The administration was being toned up to deliver. Hand-picked IAS officers are in strategic places. Most importantly, standout economists have come to the forefront and their thinking provides an inkling about things to come. A key appointment is that of a Chief Economic Advisor (CEA).
For the Big Leap
The CEA so appointed is Arvind Subramanian. While serving in US he was critical of Modi budget for its “implausible” revenue projections. He also criticized India’s method of “blocking” a WTO pact. When it came to tax collections, as Chief Minister of Gujarat, he described Modi as a “mediocre performer”. It is to the credit of Modi that criticism never stood in the way of selecting the best man for the nation’s good.
Jaitley too stands high in this regard.
In early April 2014, Subramanian wrote “Indians want the ditherers in Delhi replaced by the go-getter from Gujarat… The good news is that a Prime Minister Modi would control the policy levers”. Subramanian’s thinking: Advocacy of free trade; bigger role for manufacturing; boosting trade ties with US; Keeping a close eye on China’s economy. On these he and Modi think alike.
On the day of his appointment October 17, he has said “For any economy like India, two big things are macro-economic stability and creating conditions for rapid investment and growth”. He has also said “India can still become a powerhouse if it makes major upgrades to its roads, ports and power systems and reforms its labour laws and business regulations”. Priorities are very well spelt out.
It is reported that top personnel are engaged in working out the budget for fiscal 2015/2016. It is likely that parameters get clearly set out for an era of reforms. India may look forward to a leap, big or giant.