Above: Prime Minister Narendra Modi addressing the nation from the rampart of the Red Fort on the occasion of 73rd Independence Day, in New Delhi/Photo: UNI
The PM has many miles to go before he can secure the country’s economy, health, agriculture and defence. Does his government have the capacity to meet the challenges?
By S Narendra
Prime Minister Narendra Modi’s address from the Red Fort on Independence Day, like the first one in 2014, briefly set out the agenda with priorities which would go to determine India’s security and the country’s future. As such, the amplification of the priorities set into implementable policies for action by the governments at the centre and states, and right down to panchayats should be the next priority.
Among the dozens of policies and programmes flagged by the PM, a few would particularly impact the country’s security in vital dimensions. On top was the desire to make India reach a GDP of $5 trillion, a jump from the present $2.8 trillion economy, during the next five years. As he himself noted, it is not easy but a dream has been defined, quite like Modi’s Make in India and Swachh Bharat. Unfortunately, this dream has to sail through the current lower than expected growth rate of 6.8 percent in 2019, against the earlier projected growth rate of over 7 percent. Several structural weaknesses have surfaced in the economy such as the ailing financial sector, oversupply in the construction sector, weak manufacturing, distress in agriculture, massive shortage of jobs and shortfall in the government’s revenue expectations to the tune of Rs 1.6 lakh crore.
Global economic and political headwinds like the US-China trade war, Brexit, and tension in West Asia are gravely complicating the management of the Indian economy. The global economic growth rate for 2019 has been lowered from 3.6 percent to 3.3 percent. As the World Economic Outlook of the UN points out, climate change, trade wars and financial uncertainty are pulling down global growth.
A section of economic opinion even fears the return of a global recession unless world leaders take united action to prevent it. Nearly a dozen central banks led by the US Federal Reserve have cut interest rates to ease liquidity. Closer home, the RBI has downscaled India’s growth expectations to 5.9 percent (for the last quarter of 2019), while announcing a significant rate cut to make borrowing for investment cheaper. Fortuitously, the international oil price is ruling at $60 per barrel, offering the government major relief.
Three things fire up an economy: investment, consumption and healthy foreign and domestic markets. For some time now, India has been witnessing a decline on all three fronts despite the government’s effort to increase its investment for making up the huge lag in private investment. The government at the highest level is obviously aware of the huge problems in the economy while announcing the $5 trillion dream. One has to wait to see how it proposes to overcome these in the coming days.
Why is the $5-trillion dream important? By 2024, India will surpass China as the world’s most populous country: yet it is likely to be trapped in the lower income bracket ($2,000-3,000 per capita income). If growth does not hike to 8-10 percent or more, the country will not be able to provide jobs to the increased population. Poverty alleviation, infrastructure development and outlays on security all vitally hinge on India’s growth trajectory in the next five years.
A rather sensitive subject like population stabilisation was picked up by Modi during his address. The good news on our population growth trend is that the national average birth rate has fallen to a little above replacement level (2 percent). But the alarming news is that the birth rate in the seven most populous and poor states like Bihar, UP, Odisha and others continues to be very high. Most of the population decline has come from the relatively prosperous western and southern states. The population issue is sensitive because minority Muslims are seen as opposed to family planning on religious grounds and anyone in the government mentioning the subject from a prominent platform is viewed as controversial. By putting the population issue upfront, the PM has once again shown that I-Day speeches need not be filled with homilies alone.
Agriculture and rural areas which used to support over 60 percent of the population are no longer able to host them. There is massive migration from rural to urban areas whose infrastructure like housing, drainage, water, sanitation, transport and health are already overstrained. There is a serious environment cost—land and water scarcity incurred due to a fast-growing population.
Again, one hopes that the government has some immediate, pragmatic plan to take the states and all sections of the population with it in tackling this huge problem, sidelined after the excesses of family planning drives during Indira Gandhi’s Emergency in 1975.
Modi, while expressing solidarity with lakhs of people coping with floods in several states, used the occasion to call for better water management. This came in the backdrop of a NITI Aayog report, saying that 80 percent of households do not have piped drinking water. About 600 million people daily face serious water access problems. According to The Economist, by exporting huge amounts of farm products like rice and sugar, India is depleting its water resources.
Even while promising to spend Rs 3.5 lakh crore to supply piped drinking water, Modi repeated his call for “per drop, more crop”, and went on to emphasise the need for less water-intensive farming and less use of chemical fertilisers. One cannot dismiss this as an off-the-moment reference, and I suspect a new drive in the offing for promoting less water-intensive cropping methods, including organic farming. Climate change is forcing some action, as can be seen from Modi’s decision to ban single-use plastic and attention to alternatives to plastic packaging.
There was also a clever repackaging of the EoDB or ease of doing business, perceived as benefitting mostly the businesses into EoL or ease of living. With a turn of phrase, Modi has taken the message to the ordinary people. This EoL is a move to lessen the burden of unnecessary laws and rules that dog the common person’s everyday life that is bound to resonate well with the public. While the PM has flagged this, he has to coax the states where such burden is heaviest to go after EoL in mission mode. EoL is a sure way to elevate national productivity.
There was also a pleasant reference to districts in states to be developed as hubs of growth. India has over 650 districts of varying sizes and populations. While Thane in Maharashtra has the highest population density, Kutch in Gujarat has the biggest area.
Each district has some economic potential that requires harnessing. This idea is not new. After 14 banks’ nationalisation in 1969, each district was assigned to a lead bank branch to survey its growth and development potential and tasked to work for the purpose in cooperation with the state administration. Under the Janata government, George Fernandes as the industries minister had mooted the scheme for setting up District Industries Centres. Such centres were supposed to work as single-window service providers to businesses.
Then, here was the Planning Commission’s scheme for developing hundreds of new growth centres for ensuring balanced development and to avoid over-crowding in a few cities as is happening now. The political short-term interest tends to focus on a few existing cities like Bengaluru for industry and business.
Unofficial estimates show that this city’s population has crossed one crore and political-realty interests are hatching plans to accommodate another 1.5 crore. Bengaluru’s roads are clogged, garbage is over-flowing and it is already water-stressed. The story is not very different in many other cities and big towns.
Driving growth away into the hinterland would reduce the attraction of big cities for migration and facilitate a modicum of urban planning. It is a step towards better internal security management as well. A national political will has to be forged for this agenda to take off. At last it has figured on the PM’s plate and this augurs well for the future.
Lastly, there was the PM’s proposal to appoint a Chief of Defence Staff, which has meaning for external security. Under British rule, India did have a C-in-C or Commander-in-Chief who reported to the Governor General and the Secretary of State in London. There was also a Defence member (civilian) in the Viceroy’s council. After the adoption of the 1950 Constitution, this designation, C-in-C, was ceremonially conferred on the president of India, signalling civilian control over defence forces.
However, there are several things to be sorted out before operationalising the new institution such as clarifying the relationship between the civilian bureaucracy and CDS, National Security Adviser and Council, scientific adviser to the defence minister and the political executive. The civilian bureaucracy in the defence ministry is normally expected to offer administrative support and financial advice to the defence minister. Its proximity to the political leadership has not gone down well with the top defence brass.
There was a brief reference to the removal of Articles 370 and 35A, with the reorganisation of Jammu and Kashmir and Ladakh as two Union Territories, followed by the promise of ushering in a new development era there. The $5 trillion dream is vitally linked to this one move and how it pans out in the coming days.
A welcome change in the Red Fort speech was that there was no mention of Pakistan in the address, despite provocation. Lights and camera are behind: now comes the hard part—action.
—The writer was a former information adviser to various PMs