• IPC 2017

3 Year of Modi Government -Achievements,Failures and the Road Ahead

By GovernanceToday
In Cover Story
July 21, 2017
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pmmodi_650x400_81429260110It has been three years since the Narendra Modi-led NDA government came to power in May 2014 and India is going through an interesting and intriguing phase of transition and aspirations. Among the most urgent issues that the Modi government wanted to address were policy paralysis, inflation, black money and corruption. The long-term agenda included reforming the system – administrative, judicial, police and electoral – and bridging the rich-

poor divide. The government has succeeded in creating enough noise – from demonetisation to anti-corruption drive – to project itself as a crusader against black money and corruption. With the Modi government’s ministers competing against each other to announce more schemes almost every day, one cannot blame the government for policy paralysis either.

What we need to look at is how the government has performed.Were its achievements  qualitative?Is it well on its way to fulfil the BJ P’s pre­ election promises in the reaming next two years?

Perception wise, the government has scored. It is seen as a government in action. And the majority of the  promises that figure in the section requiring “immediate action” seem to have been attended to. The areas where its action has not been so effective include employment creation,but skill development is noteworthy as the Ministry of Skill Development aims to train 400 million Youths by 2022. The promise ofTeamIndia remains rhetoric, but the progress of the Goods and Services Tax (GST) Council being an exception and the new tax regime is likely to be in place from July 1, 2017 to boost the Indian Economy.

ACHI EVEMENTS

 It would not be a hyperbole to say that the Modi-led NDA government is one of the most hardworking governments that have taken charge of the country.Apparently, it cannot be said that all government schemes have succeeded, but many schemes have been effective and others have raised hopes of following suit.

When Modi took charge,what he got in heritage was a bureaucracy suffering from inaction and almost empty coffers ailing from scandals and scams. There existed an atmosphere of frustration and disappointment throughout the country. Perhaps that is why the

BJP under Modi in the 2014 general elections received an unprecedented mandate after 30 years of Rajiv Gandhi that too on emotional count aftermath assassination ofIndira Gandhi.

Let us take a look at the government schemes which have been successful in realizing the slogan of ‘acche din’a slogan that played a major role in bringing the BJP to power.

Surgical Strike: a wakeup call for Pakistan

Most people think that the Modi government has given freedom to the Indian army to function and it has managed to keep Pakistan under control. Of course,just a solitary strike is not sufficient and people are expecting more such strikes, but still they agree that it is a lesson for Pakistan.

The recent video released by the Indian army in which it is evident that guided Indian missiles in the

Naushera sector have destroyed several Pakistani bunkers and the follow up statement of Defense Minister, Arun Jaitley that ‘military solutions have to be given by military officers, not by political commentary’ have served as a healing touch to placate the roiling emotions  of the nation.

Speed of road/highway construction hiked

The Narendra Modi government built 21 km of roads per day in 2016-17 , missing its ambitious target of constructing 41 km every day. Despite that, this is an all–time highest figure achieved by the ministry which is almost twice the rate at which the roads were built during the time of the UPA government. Between 2009 and 2014, on an average 6 km to 9 km of roads were built per day.

2012-14: 9 km/day

2015-16: 17 km/day

2016-17: 21 km/day

Increase in Tax collection after Demonetisation

After demonetization the government has claimed that the increase in the number of taxpayers has been more than 90 lakh. A lot of undiscovered money trails have also come under the radar of the security agencies, the ED and the Income Tax department, which will help in revealing a lot of black money.

Direct taxes have registered 12 percent growth. Indirect taxes have also grown by 25 percent as per the government. The people of India also seem to be standing strongly with the government on the issue of demonetization. Their assent is also reflected in the results of the recent assembly elections.

Swachh Bharat Abhiyan

PM Modi launched a cleanliness campaign in the country which is one of his pet projects, the Swachh Bharat Abhiyan. The PM appealed to the celebrities of every region to lead it. The effect is that the Swachh Bharat campaign has become the largest cleaning campaign of the nation till now.

The critics of this scheme have to understand that the government alone cannot clean the entire country through some magic wand. The positive aspect of this cleanliness drive is that it has increased the awareness among the people about cleanliness. Once this awareness is instilled in an entire generation, the change will begin to be visible on its own.

Cooperative Federalism

For social policy, the cooperative federalism agenda began to unfold in 2015 with the implementation of the Fourteenth Finance Commission (FFC) recommendation to enhance tax devolution to states from 32% to 42%. In the 2015 budget, this increased tax devolution was accompanied by the rationalisation of centrally sponsored schemes (CSS), the primary mechanism for central government financing for social sectors. It was now for states, the government argued, to enhance social sector spending as they saw fit. Moreover, states were required to contribute 40% of the total share of CSS funds. But, even as the burden of financing shifted to states, on the larger question of the role that the central government ought to play in this new financing architecture, the government has been silent.

In August 2016, the Government of India accepted the recommendations of the Niti Aayog’s chief ministers’ sub -group on centrally sponsored schemes (CSS). This led to an effort to restructure CSS into 28 umbrella schemes. But a closer look at this restructuring reveals that little has changed. Most old schemes continue to function with budgetary allocations but have been grouped under a common name. Moreover, CSS continue to function in a top-down, one-size fit all model where state budgets for CSS continue to reflect central government priorities. To illustrate, in the National Health Mission, in 2016, 76% of state proposals for communicable diseases were approved for funding while 90% of state proposals for immunisation and infrastructure were approved. Add to this, expenditure, even at the grassroots, is linked to orders from Delhi and state capitals. We discovered this while studying health financing in Uttar Pradesh, were we found that districts don’t begin spending till orders are received. Similarly in education, there are significant differences between budgets proposed by states and finally approved by the center. In FY 2016-17, for instance, 52% of SSA budgets proposed by Bihar and 53% by Punjab were approved. Of this, only 35% of Bihar’s quality proposal was approved. This is kind of centralisation is precisely what the FFC sought to move away from.

The government has a unique opportunity for change. Arguably, the one fundamental and potentially transformational shift that this government is well positioned to institutionalise in social sector funding is a shift to outcomes-based financing. By all accounts, the Niti Aayog has initiated a process of creating an outcomes focused measurement index to rank states on key social sector indicators. If designed right, this outcomes index could be used to design a  perrformance based inter-governmental transfer system. In this model, central funding could be given to states in two windows. The first window would be an untied block grant – so states are not dependent on the whims and fancies of central government budget line-time approvals. The second would be a performance-based financing window linked to progress on the outcomes index measured by NITI Aayog. The primary role for the center in this model would be to support states in designing and implementing their plans while at the same time encouraging competition and incentivising states to innovate for improved outcomes.

Planning Commission vs Niti Aaayog                                                               

After dismantling the Planning Commission in 2015, Narendra Modi brought Niti Aaayog in its place. Planning Commission, which was an advisory body, and so is Niti Aayog. But the key difference between them is that while the former had powers to allocate funds to ministries and states; this function will be now of finance ministry. Niti Aayog is essentially a think tank and a truly advisory body. Other differences are as follows: The role of states in the planning commission era was limited. The states annually needed to interact with the planning commission to get their annual plan approved. They had some limited function in the National Development Council (NDC). Since Niti Aayog has all chief ministers of states and administrators of UT in its Governing Council, it is obvious that states are expected to have greater role and say in planning/ implementation of policies. The top down approach is reversed in Niti Aayog. It will develop mechanisms to formulate credible plans to the village level and aggregate these progressively at higher levels of government. The provision of regional council is there in Niti Aayog to address local / regional development issues. One of the new functions of Niti Aayog is to address the need of the National Security in the economic strategy. How this is to be done – is yet to be watched. While the planning commission formed Central Plans, Niti Aayog will not formulate them anymore. It has been vested with the responsibility of evaluating the implementation of programmes. In this way, while Niti Aayog retains the advisory and monitoring functions of the Planning commission, the function of framing Plans and allocating funds for Plan assisted schemes has been taken away. The governing council, which has all chief ministers of states and administrators of the Union Territories sounds much like the National Development Council. Though, the Non-BJP ruled states have resented the style of functioning of Niti Aayog likes of Mamta Banerjee-led West Bengal government and Nitish Kumar-led Bihar government as saying that the fund allocation for the states now totally rests with the Union Finance Ministry, which is against the tenets and principles of cooperative Federalism enshrined in the Indian constitution.

Functional Comparison: Niti vs PC
Planning commission NITI Aayog
Design FYP-Five year plans Design national agenda, and cooperative federalism.
Decide two “money” matters:

1.    How much money to give to each state for centrally sponsored schemes (CSS)

2.    How much money to give for each state’s own state-five-year-plans.

 Mostly work as a “policy-formulation-hub”. The Press release is ‘silent’ on money/funding. so, most probably it’ll be left to finance ministry.

·Some experts believe Inter-state council will decide money allocation to states, then finance ministry will release the fund.

·         States/UT were represented in National Development Council.

·         PC framed FYP=>went to Cabinet=>NDC approved FYP=>Tabled in parliament.

States/UT represented in Governing council. But no specific mention about whether they can approve/reject/amend Niti Aayog’s proposals?
One size fits all, top-down socialist planning by Armchair Nehruvian economists and IES cadre officers (Indian Economic Service). Press release talks about participatory planning but how exactly will they do that? No specific details laid out.

IES officers are rarely invited in Modi’s meetings.

But given the entry of Free market economists and Technocrats, most probably it’ll be an ‘indicative planning + core planning’ i.e. after inputs of state governments, a broad outline with selected targets, limited subsidies and monitoring through ICT.

Successful blunting of the effect of ISIS on India

There are few countries which can boast of their insularity from ISIS. India is one of the few countries which have been quite successful in curbing the growth of sleeper cells of the ISIS. Not only this, the Indian security agencies have been cautious in breaking out the efforts of ISIS of executing terror activities and radicalizing of Indian Muslim youth. For this, the government under the leadership of Home Minister Rajnath Singh has also coordinated with the Maulvis to keep the Muslim youth informed and educated.

The people of India will get to know about all these achievements and many more as the Modi government is all set to celebrate MODIFEST on the completion of its 3 years in power. The BJP leaders and workers will make the people aware of the development programs of the NDA government from May 26 to June 15. These celebrations will take place in 900 cities all across the country.

Skill India Mission 2022

Few worth mentioning achievements of Skill India programme, which aims to train 400 million Youths  by 2022

1) The skill training and development ecosystem has seen transformational change through concerted efforts in terms of initiatives such as PMKVY
2) New ITIs with private/ industry partnership
3) Infusion of new ideas and finance through World Bank assistance
4) A paradigm shift in entrepreneurship education and development
5) The number of ITIs in the country has increased from 10,750 in May 2014 to over 13,105 in May 2016 and these will be further scale up to 18000 by September this year
6) More than 1141 new ITIs have been added and 1.73 Lakh seats have been increased in the last one year
7) MSDE has also enabled the opening up of 5 new RVTIs for women in skill development
8) Till date over five lakhs entrepreneur trainings have been done by National Institute for Entrepreneurship and Small Business Development (NIESBUD)
9) 83 percent of these have been trained through digitised entrepreneurship Orientation Programs
10) Amendments in Apprenticeship Act for increasing opportunities for the youth, and Bring in a new focus to skill development in the country.

Failures

Some issues such as foreign policy, unemployment, social unrest both due to internal and external miscreants, etc. demand immediate attention. Now, let us see the flip side and take a look at some of the failures of the Modi government after its 3 years in power. Also, the government has nominated heads for the various councils are burdened with some other responsibilities and unable to do justice with the new responsibilities that led to confusion and shoddy implementation of policies for such councils.

Insufficient job creation

The biggest challenge ahead of the government is of generating employment opportunities.  Discontent among people has been simmering due to immense insufficiency of jobs. PM Modi in a political rally in 2013 had promised to create 1 crore jobs every year. On the contrary, job creation in 2017 is at the lowest rate in 8 years. Under Modi, only 1,35,000 jobs were created in 2015 and around 2 lakh jobs in 2016. There have been reports of additional job cuts in the IT sector. Experts say that there is a possibility of retrenchment of 2 lakh jobs per year for the next 3 years in the IT sector.

Entitlements vs Empowerment

In 2014, when the National Democratic Alliance (NDA) government rode to power, many had expected (with anticipation or trepidation depending on which side of the ideological fence you sit on) that the government would radically alter the architecture for welfare. Indeed, early into its term, the government set about the task of distinguishing (and distancing) itself from the United Progressive Alliance’s (UPA) rights-based welfare approach by positioning its approach to social policy as “empowerment” in opposition to the UPA’s “entitlement” approach. Replacing the leaky and inefficient welfare delivery system with the deceptively elegant cash transfer model was a critical component of the empowerment narrative. To do this, the government’s first task was to scale up the direct benefit transfer (DBT) pilots with the JAM (Jan Dhan, Aadhaar, Mobile) trinity as its foundation.

Progress, however, has been slow. The target in 2014 was for DBT to cover 536 schemes across 65 ministries and departments. By December 2016, only 84 schemes across 17 departments and ministries were using DBT. Moreover, the pace of money transfers through DBT has slowed down. By December 2016, only 45% of the 2016-17 Government of India (GoI) allocation for LPG subsidies and 62% for the National Social Assistance Program were transferred through DBT. And while the government is struggling to roll out the DBT, the PM has turned to the UPAs “entitlement” programs to respond to post-demonetisation shocks to the rural economy. In his December 31 speech, the PM committed his government to implementing the maternity benefits program, a key provision of the National Food Security Act. Add to this, the MGNREGA, which was given a new lease of life earlier this year on account of drought conditions in many parts of India, has recently received a supplementary grant on account of the increased demand in December. By early January 2017, the Centre had released Rs. 55,076 crore for MGREGA – the highest allocation so far since the program was launched.

One reason for the NDA’s continued reliance on the “entitlement approach”, despite the rhetoric of “empowerment” through cash, is the lack of consensus even within the BJP on what a credible alternative to the current welfare framework could be. Even as candidate Modi campaigned from a centre-right, less state intervention position with slogans like “maximum governance, minimum government”, the BJP’s position on welfare, as political scientist Milan Vaishnav has argued, was very much a continuation of the UPA’s entitlement approach. Not unlike the UPA, the BJP manifesto promised to implement the right to food, a national health assurance program and increase expenditure on education. Moreover, BJP-ruled states have done a better job of implementing the UPA’s entitlement schemes than many Congress states. The best illustration of this is Chhattisgarh, which under the BJP’s Raman Singh government has become the poster child of PDS reform. With these successes, replacing entitlements like the PDS with cash transfers just doesn’t make political sense.

The lack of political consensus also exposes the limitations of the cash argument. The push to cash transfers stems from the belief that cash transfers are a solution to the state’s continued failure to deliver services. Yet, as the DBT experience is beginning to reveal, cash is not a substitute for a failed state system. Getting the cash architecture right requires negotiating complex governance tasks like getting targeting right, adapting to market fluctuations, dealing with supply constraints and building a functioning banking system. Rather than being a substitute, effective cash transfers require a sophisticated and capable state machinery to support it.  The failure to recognise this, especially as calls for a Universal Basic Income grow louder, and invest in building state capacity is this government’s greatest error. The UPA left most of its entitlement schemes, including the MGNREGA, in urgent need of improved implementation. Rather than focus on getting implementation right, the contradictory messages from the government have further weakened these programs.

Wage payments under MGNREGA are a good example of this. In 2016-17, at a time when the government needed MGNREGA to perform, 53% of payments were delayed by between 15-90 days.

Make in India

When PM Modi came to power three years ago, manufacturing was at an all-time low at around 14 percent of the GDP. The land acquisition norms made it difficult to set up new factories. Cheap imports from China had further dampened domestic production. After the Modi government assumed power, it launched the ‘Make in India’ campaign in September 2014 to revive indigenous manufacturing with the objective of improving India’s ranking in the ease of doing business and to give a push to the investments from foreign countries. In November 2015, the government further slacked up FDI rules in 15 sectors to realize the same.

The country still ranked a low 130th in the World Bank’s ease of doing business rankings in October 2016. A few manufacturing firms such as General Motors closed down on falling commodity prices, uncertainty in a demand revival, or as part of general consolidation of operations. Hence, there are no two ways about the proposition that the ‘Make in India’ campaign has not reached anywhere near in realizing its coveted objective.

Kasmir valley on the boil again

Kashmir has always been a canker, for the governments in power and the incumbent Modi government is no exception. The recent unrest –prone districts mainly Pulwama, Kupwara and Baramula adjacent to line of control reminds many of the nightmares of 90s, when the Valley witnessed a turbulent time with the uprising of Kashmiri youth. Though it is an open secret that anti-India forces sitting in Pakistan are fomenting the fresh trouble and even school-going boys and girls can be seen hurling stones at security forces. Though no can term the present situation in Kashmir as whole state is engulfed in trouble, but only the areas comes in the valley region is raging. However, these disturbing developments pose a question on the validity of both the central government and the BJP-PDP led government in Jammu and Kashmir.

Clampdown on the hard core separatists is fine as a short term method but at the same time de-doctrinisation, de-radicalisation of the youth through education system is also needed, this will decrease the intensity of the problem in next 10 to 15 years. The idea is to streamline the Kashmiris with the rest of India.

Non-functional Namami Gange scheme

The ambitious Union government project to clean the sacred river of Ganga is gravely lagging behind its schedule. After being elected to the Parliament from Varanasi in May 2014, Prime Minister Modi took a step towards cleaning the Ganga by launching the Namami Gange Yojana and for it, huge amount of funds have been given. A whooping 2,958 crore rupees have been spent till now on the Ganga cleaning project with almost negligible results visible on the ground. Ministry of Water resources working under Uma Bharti is one of the lowest rated ministries in terms of its operational outputs.

NPA’s remain a trouble

The problem of NPA’s of the previous government has persisted in this term of Modi as well. This has caused the entire banking sector to come to a standstill. The result of this is that new loans for investment have choked and the export is also falling. After Vijay Malaya escaped to London, with a humongous debt of Rs 9000 crore, the public sentiment has further taken a hit. This problem needs to be sorted big time now.

Health and Education

Despite the emphasis on “empowerment”, health and education remain invisible in the Modi government’s social policy agenda. A shopping list of schemes launched by the government to realise “empowerment”. But this long list of schemes offers no hint of a cogent vision and policy on health and education.

Health is the bigger causality. The National Health Policy has disappeared without a trace. In the 2016 budget, a new health insurance scheme was announced. A year later, this is still to be implemented. And while government rhetoric suggests a shift in priority toward insurance, there is no debate on how to tackle complex issues of regulation and quality. On the other hand, the National Health Mission (NHM), the current flagship programme  for strengthening primary health systems, which still accounts for 50% of the centre’s health budget, is floundering. And despite growing evidence of a serious crisis in the quality of primary care, from doctor absenteeism to low effort, lack of use of treatment protocols, over-medication and maltreatment of patients, the government is showing no urgency to reform the NHM. To be fair, the current crisis in health care is not the making of this government. However, the lack of a coherent vision and strategy on how to tackle this crisis, especially in the context of the rhetoric of empowerment, is a serious failure.

Elementary education has had a relatively better run. The need to urgently tackle the low learning levels in India’s elementary schools is now widely recognised and even though the National Education Policy has been deferred to yet another committee, the commitment to improve learning outcomes has been clearly stated. At the moment, the effort is focused on measuring learning. The Niti Aayog is in the process of launching a school quality index while the education ministry is preparing to undertake a learning census. Measurement is necessary but its usefulness hinges on the system’s ability to use measurement as a diagnostic tool to reform the teaching-learning process. For the moment, there is little clarity from the government on how it intends to use these assessments.

The problem is complicated by the fact that the current planning and budgeting process is not designed to prioritise learning. Planning continues to be based on school infrastructure goals and learning focused programs receive very little financing.  In 2014-15 (latest available figures) 78% of the Sarva Shiksha Abhiyan (the government flagship scheme for elementary education) budget was allocated to infrastructure and teacher salaries. The two line items that focus specifically on fuelling learning-focused innovation – (innovation and learning enhancement program) received less than 1% of the SSA budget. And this is the one area that has seen the most cuts – in 2014-15 only 13% of funds requested for these activities were approved. This increased to 25% in 2015-16. Many state governments are now beginning to experiment with different ways of changing classroom practices to improve learning. These ought to be supported, studied and scaled. But the absence of resources and the continued focus on school infrastructure in plans and budgets is a serious impediment.

The road ahead for the BJP and the Modi government

The duo of Narendra Modi and Amit Shah are writing a new definition of election campaigning through their consummate skills and industriousness. The other political parties are trying hard to catch up but with little success. Currently, the majority of the nation is painted in bhagwa. In 13 of the 29 states, BJP has a government, either independently or in coalition. About 60 per cent of the total population of the entire country is ruled by BJP and its alliance.

 The downfall of the Congress in the recent years has also aided the upsurge of the BJP. The Congress under the leadership of Rahul Gandhi is presently going through one of its deepest troughs after being reduced to 44 seats in the 2014 Lok Sabha polls. Since then, the oldest party of India has lost assembly elections in the states of Andhra Pradesh, Assam, Haryana, Jammu and Kashmir, Jharkhand, Kerala, Maharashtra and Uttarakhand. The gist is, if the Opposition succeeds in putting its act together, we can expect a resistance of some sort, otherwise it seems quite probable that the history might repeat itself in the 2019 general elections.

At the same time, amid all pomp and show of its 3 years in power, the Modi government must also bear in mind that no magnitude of work is ‘enough’ for the government. Making the public aware of what has been done is fine but manifold work still needs to be done and the government under the leadership of PM Modi has to work incessantly if it has to take India to the heights of glory.

 

 

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