If I were Narendra Modi, I would visit many State capitals and second tier cities and articulate the economic vision and strategy that his government had worked on, for the last four years, as below:
(a) During UPA years, India’s potential growth had come down. They had assumed that economic growth of 8% to 9% was on autopilot and spent on everything.
(b) We retained their socio-economic development model and goals but were clear that they should be sustainable.
(c) We set about restoring India’s potential growth rate. Private capital formation was in coma. Banks were not in a mood to lend. So, confidence of foreigners to invest in India was one priority. Hence, the whirlwind diplomacy in the first two years. It paid dividends.
(d) Second, was public investment focus and on infrastructure. Roads, railways, smart cities and renewable energy.
(e) Third, lower tax rates for more than 95% of businesses. Corporate tax rates reduced for businesses up to 25 crores.
(f) Putting government finances on sound footing. Oil windfall used to restore good health to government finances. The previous government had left us a true deficit of around 6% of GDP, not including State governments’ deficits.
(g) Hence, funding development expenditure cannot be reliant on higher GDP growth. That was no longer a given for domestic reasons mentioned above – banks and companies in bad shape. Monsoons had become erratic. Internationally, the world had changed since 2008 – low growth, weaker commtiment to trade and immigration, etc. Hence, high growth cannot be counted upon.
Public finances had to become sounder.
(h) Hence, use of technology, demonetisation and the information gathered from that exercise being put to use for nabbing tax evaders, implementation of Goods and Services Tax, Insolvency and Bankruptcy Code and Real Estate Regulation (RERA).
(i) Strengthening the foundation cannot be only about economic growth and finances. It has to be about health, hygiene and sanitation. Hence, we announced Swachh Bharat. Now, we have a national healthcare mission.
(j) Then, there was PM Jan Dhan Yojana. Access to finance happens when there is a record and habit of savings and thrift. OPening bank accounts brings citizens into the formal economy and be able to tap formal sources of credit as they build a record of savings and transactions. It will be a game-changer in the years ahead.
(k) Agriculture is a State subject. But, we understood the risks that farmers faced both with respect to production and pricing uncertainties. Hence, the PM Fasal Bhima Yojana (CROP INSURANCE) and the National Agricultural Market (NAM).
Therefore, the last four years has been about cleaning up and laying a solid foundation for the economy for the next twenty-five years towards completing the centenary of India’s independence.
The next five years will be about execution and implementation now that we have laid a good foundation.