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Tasks for Modi 2.0: Govt's to-do list, going by BJP's election manifesto

Narendra Modi
Promises are meant to be kept, they say, and never to be broken. But in politics, promises made during election campaigning are not always kept after assuming power — inertia and the state’s limited administrative capacity are some of the reasons. Nevertheless, promises keep the spirit of democracy alive, and are an integral part of people’s empowerment process.

The Narendra Modi-led Bharatiya Janata Party (BJP) government, which had made a long list of promises in the run-up to Lok Sabha elections 2019, has stormed back to power with a strong mandate. While some of those promises, such as eliminating poverty or implementing the Labour Code, are for the long term, the BJP’s poll manifesto includes some schemes and policy decisions that could easily be completed in the short term. These would not need legislation, let alone a constitutional amendment.

Here, we look at the poll promises that can be handled directly by the executive led by PM Narendra Modi in his second term. Farmers find the biggest place in such promises. They are followed by traders and shopkeepers, the biggest support base of the BJP. And then there also are the promised policies to increase the efficiency of government administration.

Income support to ‘all’ farmers

In the interim budget, the Modi government announced the PM Kisan Sammaan Nidhi (PMKISAN) scheme, a thrice-a-year cash infusion of Rs 2,000 each in the bank account of every small and marginal farmer. About 86 per cent or 125 million cultivators in India, according to the agriculture census, are the beneficiaries. The BJP manifesto promises to also include the remaining 20 million medium or large land-owning farmers in the scheme and provide them income support. This means, all cultivators in India are to get Rs 6,000 per year from the government.

This, senior policymakers say, is the way in which the government is directly redistributing income — from all taxpayers to all farmers.

Pensions for the demographic dividend

Many social scientists and economists say that India’s youthful majority will turn into a populace with a sizeable proportion of senior citizens. The government is thus resorting to pension schemes for various classes, especially the ones who do not have any social security cover, to avoid old-age poverty in the coming decades.

The interim budget introduced a pension scheme for workers in the informal sector. The BJP manifesto promised pension schemes for two categories of professions — farmers and shopkeepers. While the first targets urban retail merchants, the latter targets the rural.

If the government announces this soon — fully or partially — farmers will get income support directly through the Budget, and get old-age pension after the age of 60.

Interest-free crop loans to farmers

In 2006-07, the then United Progressive Alliance government came up with a scheme to give discount to famers on the interest paid by them on short-term (one-year) crop loans. This reduced the interest burden from 7 per cent to 4 per cent on prompt repayment.

The BJP manifesto promises interest-free loans, or short-term crop loans with a 0 per cent interest to those farmers who make prompt repayment of dues. This will ensure that more farmers avail of loans from formal channels like banks; and those who do, and make repayments in time, pay no fees (interest).

The interim budget estimates the spending on interest subvention of 3 per cent to be Rs 18,000 crore. With a subvention of entire 7 per cent, the spending might rise to Rs 30,000 crore, farm economists say.

Model land law for conclusive titling

The implementation of any farmer-specific scheme needs accurate land records, which are currently in a very bad shape. While some states have embarked on the initiative and are updating land records, there is no central registry of farmland with ownership and maps with the government as of now.

The government has promised a law that would be a model for states to enact and award conclusive land titles to owners/cultivators/share croppers according to its provisions.

Passing such a law in Parliament would be considered a progressive step and hardly see any opposition.

Agri and aqua infrastructure

The BJP manifesto also promises a new scheme that will build storage and marketing infrastructure for aquatic food produce. This will include iceboxes and cold storages to be available for use by small and traditional fishermen families.

The manifesto puts the spending at Rs 10,000 crore, but it is unknown whether it will be a one-time investment or recurring scheme expenditure from the annual Budget.

The manifesto vows to build a National Warehousing Grid along national highways and a Village Storage Scheme to store farm produce at the village level to assist efficient marketing. Such schemes can easily be introduced in the full Budget.

New industrial policy (remember 1991?)

The new Modi government has promised to bring in a New Industrial Policy, to improve competitiveness of industry, including the services sector. This policy, the manifesto says, will attune the economy to Industry 4.0.

The previous such instance of using this name was in 1991, when the then finance minister Manmohan Singh had introduced the New Industrial Policy that freed up industry from excessive government control. The private sector was welcomed in many areas where the government had a monopoly, foreign investment was opened up, exports were incentivised and the reform of government-owned companies started.

If Modi 2.0 delivers on this promise, this will be a step ahead from the liberalisation reforms of 1991.

Traders not left out

The manifesto of the ruling party spelt out a host of measures for the welfare of traders. It vowed to establish a National traders’ welfare board, which could be the central body, to give answers to issues raised by trader bodies.

Data from goods and services tax (GST) collection shows that the tax collected as Integrated GST (IGST) has always been more than the sum of State GST (SGST) and Central GST (CGST). IGST is collected on imports and inter-state supply of goods or services. This suggests that tax collected due to trade activities occupies a noticeable pie in GST revenues, highlighting the traders’ importance for the government.

The manifesto promises a national policy for retail trade, accident insurance for traders registered under GST, and a “merchant credit card”, a credit scheme on the lines of Kisan credit card, which farmers use to spend money availed of as crop loans.

A new ministry for water

In view of the acute water scarcity facing India, the BJP asserted that water would be given a full ministry charge, in order to look at an independent subject. Most Indian villages do not get the mandated supply of 40 litres per day per person.

International agencies such as WaterAid and Columbia University have underlined a water stress in India. A sharp focus on water would be a big change in the executive, and the ministry, with controls, can assume immense importance in coming years. The Opposition Congress had also promised a separate water ministry.

However, to manage water resources, which is in the State List, the new ministry at the Union level would probably assume the policy role and leave the implementation fully to states.

This seems to be a prelude to the long-term mission that the manifesto underlines: piped water to all citizens of the country by 2024.

Minimum government, maximum governance

If the new Modi government stands by the BJP manifesto, it would soon merge complementary departments into sector ministries. While this would reduce the number of ministries (and ministers!), it is hard to believe that the size of the administration would reduce.

The establishment size and the spending on salaries, pensions, and other perks are rising year by year. However, the merger might bring efficiency in administration, experts think.

Reduce out-of-pocket health spend of Indians

The previous government expanded the price list of commonly used drugs, and gave the National Pharmaceutical Pricing Authority (NPPA) more teeth. Stent prices were reduced considerably; and Jan Aushadhi Kendras (People’s medicine centres) were opened up to supply generic and low-cost drugs.

Add to this the BJP poll manifesto promise of a new list of medical devices, and a separate pricing policy to ensure their affordability. These would reduce health costs incurred by families even further.

Easy credit for youth

The manifesto also promised a scheme that could provide collateral-free credit up to Rs 50 lakh to young entrepreneurs engaged in the startup ecosystem. This would be, from what it sounds, different from the Mudra scheme meant mostly for one-person establishments in the informal sector.

Once such a scheme is notified, banks will have to fall in line and deliver collateral-free credit to eligible startups. The manifesto promised half of the credit to women entrepreneurs. 

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