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Wednesday, October 28, 2015

Will the Modi government be able to boost economic growth in the country? – a guest post

People of India are still waiting for ‘acchhe din’ promised by the Modi government. Some Jan Dhan Yojana bank account holders in Bihar are actually expecting Rs 15 Lakhs to be deposited in their accounts from the ‘kala dhan’ recovery.

Many programmes have been announced by the government. Critics call them populism and hype. Modi has candidly admitted that without creating hype things just don’t get done.

In this months guest post, Nishit lists out several initiatives undertaken by the Modi government that have already started achieving results. Subsidy leakage has been curtailed, and government’s coffers are filling up. India may not be too far away from ‘acchhe din’ after all.

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The Modi Government completes 18 months in office next month and the broader template for future growth is clear now. Whether Modi is re-elected or not for the next term may be a matter of debate, but he is delivering today. The first 40% of any project should be dedicated to proper planning. Proper planning makes life easier.

The key planning components in place are:

  1. Aadhaar Card as the primary document. This was an initiative taken by UPA and taken ahead by the NDA
  2. Self Attestation of documents. This again has been built on the foundations laid by the UPA Government
  3. Jan Dhan Bank Accounts. Once the accounts are in place, it is easy to transfer subsidy money into them
  4. Social Security net for those having lower income. The twin insurance schemes and the Atal Pension Scheme are master strokes. Those who make use of it will benefit
  5. Subsidies directly being transferred to Bank Accounts. UPA started this but made a mess of the implementation. Also, by playing on people’s sentiments to give up cooking gas subsidy, it is a very smart way to cushion against future oil price hikes
  6. Auctions for all natural resources. This does away with middlemen and both the States and Centre get a fair share of the money
  7. LED lights being distributed at subsidised rates. This has twin impact. The total consumption of electricity goes down. India is able to meet global emission targets and get plaudits abroad
  8. Make in India program given a fillip by LED lights. MNCs like Philips planning to set up LED manufacturing units in India
  9. Getting Railways to invest in infrastructure. By arranging for a lower interest rate loan by LIC, it ensures that infrastructure spending gets a boost. Also, Railways remain the owner of the land being developed
  10. Increasing the speed of building highways. This will lead to faster connectivity and also infrastructure spending will lead to more capital investments

The results of all these initiatives will be visible in another two years time. This is how Governments are supposed to run. There may be differences politically, but the policy continuity should be in place. Bihar elections may be a hiccup but those are very minor events in the overall big picture of things to come. Domestically, India is well placed. The raids on commodity hoarders are like icing on the cake.

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(Nishit Vadhavkar is a Quality Manager working at an IT MNC. Deciphering economics, equity markets and piercing the jargon to make it understandable to all is his passion. "We work hard for our money, our money should work even harder for us" is his motto.

Nishit blogs at Money Manthan. You can reach him at nish.stockid@gmail.com)

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