Skip to main content

Narendra Modi's "modest" steps unlikely to bring Indian economy back on track, comments The Economist

By Our Representative
World’s top rating agency Standard & Poor may have lifted India's rating outlook to 'stable' from 'negative', with claims that this shows it acknowledges efforts by the Narendra Modi government to maintain fiscal discipline while reviving the economy and drumming up investment, influential British journal “The Economist” believes not enough has yet been done, and the new government’s “modest policies” will not bring back to nine per cent growth. The commentary comes when Modi is in the US, the stocks have returned following a three-day losing streak and the rupee showing signs of strengthening.
Continuing to offer strong views like before, The Economist, dated September 27 in an article titled “Reform à la Modi”, says, “When Narendra Modi’s Bharatiya Janata Party won a thumping majority for its pro-growth promises in India’s elections in May, hopes swelled that the new government would adopt economic reforms that had proved beyond the brittle coalitions of the past. Yet in defiance of the maxim that the boldest steps are best taken early, Modi has so far eschewed dramatic change.”
The Economist particularly notes, that the “cuts to subsidies (such as on fuel and fertilisers), which cost 2.3 per cent of GDP last year, have been deferred” and there is so far “no firm timetable for a national goods-and-services tax, which would boost GDP substantially by removing barriers to trade between India’s many states.”
The journal also takes objection to the fact that “caps on foreign direct investment in many areas, including supermarkets, remain in place.” Instead of taking strong decisions, it says, “the government has taken a series of small steps, ginning up India’s sluggish bureaucracy, for instance.”
Wondering if the chance to reshape India’s economy is “slipping away already”, the commentary says, despite a series of measures, the economy has been growing at 5.7 per cent “year-on-year”, but “that is not a sparkling rate for an economy that until a few years ago was growing at 9 per cent a year.” Though this is “a good deal better than in most places”, “the foreign money that washed out of India last year has returned”, and the “stockmarket has risen to record levels”, it adds, “Inflation is too high, at 7.8 per cent” and “the impetus for reform has slowed.”
No doubt, the journal says, “Modi has cracked heads” in the bureaucracy, and “many permits can now be obtained online”, and the result is that, “by the start of September the government had approved 175 stalled projects, according to Citigroup.” Yet, it says, “This good work was set back when, on September 24, the Supreme Court cancelled 214 of the 218 coal-mining licenses sold between 1993 and 2010.”
While giving credit to the Reserve Bank of India, especially to its UPA-appointed governor Raghuram Rajan, for taking steps to bring down inflation, The Economist warns, the new stability should help growth to pick up by not more than one per cent, from around 5.5 per cent this year to perhaps 6.5 per cent next year, and “unless the government does its part by adopting more radical reforms, the 9 per cent annual growth that India briefly enjoyed before the financial crisis is hard to imagine.”

Comments

TRENDING

Mystery around Gujarat PSU 'transfer' of Rs 250 crore to Canadian firm Karnalyte

By AK Luke, IAS (Retd)*
While returning from a Board meeting of the Oil India Limited (OIL) in Ahmedabad some time in 2012, two officers of the Gujarat State Fertilizers and Chemicals Ltd (GSFC), Nanavaty and Patel,  saw me off at the airport. They said they were proceeding to Canada in connection with a project GSFC had entered into with a company there. As we were running late, I hastily wished them the best.

Savarkar in Ahmedabad 'declared' two-nation theory in 1937, Jinnah followed 3 years later

By Our Representative
One of the top freedom fighters whom BJP and Prime Minister Narendra Modi revere the most, Vinayak Damodar Savarkar, was also a great supporter of the two nation theory for India, one for Hindus another for Muslims, claims a new expose on the man who is also known to be the original proponent of the concept of Hindutva.

J&K continues to be haunted, as parts of India 'degenerate' into quasi-Kashmir situation

By Rajendran Narayanan*, Sandeep Pandey**
“Jab har saans mein bandook dikhe toh baccha kaise bekhauf rahe?” (How can a child be fearless when she sees a gun in every breath?) remarked Anwar, a gardener from Srinagar, when asked about the situation in Kashmir. On November 30, 2019, a walk through an iron gate in a quiet neighbourhood of Srinagar took us inside a public school. It was 11 am when typically every school is abuzz with activity. Not here though.

Indians have made 119 nations their ‘karma bhumi’: US-based Hindu NGO tells Rupani

Counterview Desk
In a stinging letter to Gujarat chief minister Vijay Rupani, the US-based Hindus for Human Rights (HfHR), referring to the report citing his justification for the Citizenship Amendment Act (CAA) – that “while Muslims can choose any one of the 150 Islamic countries in the world (for residence), India is the only country for Hindus" – has said, he should remember, Hindus have made several countries, including USA, their home.

Dalits rights meet planned on how citizenship law 'negates' Ambedkar's equality focus

By Our Representative
A Dalit rights meet has been planned at the Dalit Shakti Kendra (DSK), Sanand, Ahmedabad district, to discuss implications of the Citizenship Amendment Act (CAA), passed by Parliament on December 10-11, for Dalits, Adivasis and other marginalized sections. Announcing the decision, DSK director Martin Macwan said, the meet would take place on December 25, 2019, at 11.00 am, to commemorate the anniversary of burning of copies of Manusmriti by Dr BR Ambedkar.

What about religious persecution of Dalits, Adivasis, asks anti-CAA meet off Ahmedabad

By Rajiv Shah
A well-attended Dalit rights meet under the banner “14 Pe Charcha” (discussion on Article 14 of the Indian Constitution), alluding to Prime Minister Narendra Modi well-known campaign phrase of the 2014 Parliamentary elections, “chai pe charcha” (discussion over cup of tea), organized off Ahmedabad, has resolved on Wednesday to hold a 14 kilometres-long rally on April 14 to oppose the controversial Citizenship Amendment Act (CAA), enacted on December 10-11.

'Allow critical thinking': SAARC-sponsored varsity teachers support protesting students

By Our Representative
Teachers of the high-profile South Asian University (SAU), a New Delhi-based international institute sponsored by eight member states of the South Asian Association for Regional Cooperation (SAARC) – Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka – have supported “peacefully protesting students and other citizens” against the Citizenship (Amendment) Act (CAA), 2019 and the National Register of Citizens (NRC).

Upendra Baxi on foolish excellence, Indian judges and Consitutional cockroaches

By Rajiv Shah
In a controversial assertion, top legal expert Upendra Baxi has sought to question India's Constitution makers for neglecting human rights and social justice. Addressing an elite audience in Ahmedabad, Prof Baxi said, the constitutional idea of India enunciated by the Constituent Assembly tried to resolve four key conflicting concepts: governance, development, rights and justice.

Kerala governor turned History Congress into political arena, 'insulted' Prof Irfan Habib

Counterview Desk
In a signed statement, office bearers of the Aligarh Society of History and Archaeology (ASHA), Prof Syed Ali Nadeem Rezavi (president), Prof Jabir Raza (vice-president), Prof Manvendra Kumar Pundhir (secretary) and Prof Farhat Hasan (joint secretary), have said that Kerala governor Arif Mohammad Khan had sought to insult veteran historian Prof Irfan Habib, 88, at the 80th session of the Indian History Congress, even as turning it into his “political arena”.