By Tushar Singh
Narendra Modi responded to critics both within and without the party, during his speech at the Institute of Company Secretaries of India (ICSI) Golden Jubilee celebrations, on Wednesday. He used wit, rhetoric, charm and most notably statistics to disprove claims against his government’s poor performance.
Destroying with digits
The government had come under a lot of flak for GDP growth slowing down to 5.7% in Q1 of FY18. Modi cleverly asked whether this was the first time GDP growth had been that low, taking a dig at UPA II. He highlighted that the GDP growth was below 5.7% 8 times under the UPA government, sometimes reaching as low as 0.2 and 1.5 percent.
He stressed upon how inflation was higher than GDP growth with an ever increasing current account deficit and fiscal deficit under the UPA government, awarding brownie points to his own government for having controlled all the above mentioned macroeconomic factors.
The Shalya(s) of India
He admitted that he was not an economist and didn’t pretend to act like one. However, he went on to ask, why India was considered a part of the Fragile Five group of economies when he took over the government in 2014 when highly reputed economists were in power, a clear reference to former PM Dr Manmohan Singh. Drawing a parallel to the Mahabharata, he compared some people in the country to Shalya, a mythological character responsible for sowing the seeds of doubt in Karnas mind during the epic battle.
He said that people similar to Shalya were spreading pessimism in the country’s environment unnecessarily. Some people sleep well at night if they spread pessimism. And for these people, growth being less in one quarter is the biggest supplement theyve got, said Modi. The PM also highlighted the opposition’s hypocrisy for not believing in CSOs GDP numbers when the growth rate was 7.4% and appreciating the same when GDP grew at 5.7%.
Let’s count the accomplishments
Modi emphasised his governments achievements in the past three years in one of his longest speeches as PM. From passing Benami Properties Act stuck for 28 years and the GST stuck for 17 years, to introducing the Insolvency & Bankruptcy Code and forming a SIT on black money one day after coming into office, Modi claimed that his government was not in the business of giving freebies but was actually empowering people.
His government had the guts to demonetize the 500 and 1000 rupee notes as a result of which cash to GDP ratio has come down from 12% to 9% and 2,10,000 shell companies have been unregistered, quoted the PM. He mentioned that India is moving to a cashless society and a new era of honesty has kicked off.
Niti, Riti and Niyat
After providing a series of slides with statistics showing how NDA outperformed the previous government in transport, energy and software sector, he claimed that increase in automobile sales after June 2017 happened only because people developed confidence in the economy.
Shocking statistics with respect to FDI revealed that 75% of the total FDI in the construction sector since 1991 came in the last 3 years. Modi said that it was only because of Niti, Riti and Niyat (Policy, Rites, and Intention) of the government.
Baseless promises?
Even though Modis arguments are meritorious, the fact remains that citing the past to paint a bright picture of the future may not be the right answer the masses are looking forward to hearing. It may be true that the poor condition of the economy is being exaggerated by the opposition and some sections of the media, but it is reasonable to argue that the economy is on a downslide.
We do not deny the GDP growth is less but we are ready to take decisions, Modi said acknowledging the above. While assurances like the financial stability will be maintained, and we will take every necessary step to increase investment in the future we will put India in a new league of economic growth and government is willing to help sectors troubled at present from structural reforms, be it MSMEs, the export sector or the informal sector help, but Modi fails to provide a blueprint to revive growth and sticks to the same argument that all his structural reforms will boost growth in the long run. The question, “When will this long run arrive?” remains unanswered.
Political tactics: For how long can they hold the storm?
Unfortunately, Modis speech was more political in nature than economic. He constantly highlighted how his government was much better than the previous one, but using statistics to fight criticism may backfire. The opposition (notwithstanding their leaders competence) can easily counter Modis speech by providing another set of statistics to nullify everything that he said.
The rise in NPAs and drop in private investment are the trump cards for the opposition. More importantly, Modis argument for job creation was rhetorical and utopian in nature rather than being practical. He argued that a humongous rise in FDI and increased capital expenditure by the government must have created more jobs. Having said that, he does acknowledge the troubled faced by the informal sector in terms of unemployment due to GST and demonetization.
The Lone Ranger
Modi has made it clear that he is the best man to lead the country. With his wit and humour along with solid oratory skills, he has shown why Congress was voted out in the first place. Congress must provide an alternative model to Modinomics with justification. Simply levying criticism on Modi is actually playing into his hands.
By saying, It is good that they (Congress) did not do any work and left it for me, Modi deepened the blow to Congress. Being fatalistic, sticking with the status quo and finding a problem in every move of the government only showcases the journalistic role played by Congress. In order to gather votes, Congress must cement its tracks or the Modi storm will once again sweep them away.
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