New regime must focus on economic revival
Exactly a year ago on this day, Mr Narendra Modi had challenged the insipid leadership of then Prime Minister Manmohan Singh and offered the country one of its first previews of what a progressive Government, led by a strong and capable leader, could look like. A year later, as he now addresses the country from the historic ramparts of Lal Quila, India expects him to fulfil the challenge he had set at Lalan College in Bhuj and deliver the achey din he had promised in the months since then. The Indian electorate has kept its side of the deal — it has given Mr Modi not just a strong mandate but, indeed, a once-in-a-generation opportunity to script the destiny of this nation. Now, the ball is in the Prime Minister's court. His most pressing task is to revive the economy which requires, first and foremost, lifting the state machinery out of its policy paralysis. Thankfully, Mr Modi has kickstarted this process, from the bottom up. Bureaucrats, notorious for shirking responsibility, have been told to produce actionable plans, not ponderous verbiage; they have been encouraged to cut down paper work and take prompt decisions; in return, the Prime Minister has assured them his full support. At the policy-level, the Modi Government's focus on infrastructure development is welcome and must be sustained. India cannot achieve its potential if its core framework is falling apart — it needs its roads and railways, bridges and sea ports, schools and stadiums, cold storages and cell phone towers. Also, Government spending on such infrastructure projects helps infuse cash into the economy and shore up demand. However, to fulfil all of India's infrastructural needs, foreign investment is needed and the Modi Government has rightly begun that process by allowing more FDI in some key sectors. Another area of priority has to be the much-neglected manufacturing sector Reviving manufacturing is crucial to strengthening India's economic core. Over the next decade, if this sector can be ramped up to contribute about 25 per cent of the country's GDP, it can create as many as a 100 million new jobs. The importance of employment generation can hardly be understated given India's demographic imperative. If India’s burgeoning youth population is left jobless or is under-employed, it will lead to large scale social unrest. Moreover, to leverage the demographic dividend, the Government must focus on skill development and reform the education system.
Once the Government has got the economy ball rolling, it will have to work on the second generation of reforms that the country so desperately needs. These will range from improving labour laws and land acquisition rules, to setting the template for a small Government, and eventually weaning the country off its subsidy regime. Also, Centre-State relations have to be recast while state institutions, which had been eroded by the UPA regime, strengthened. But reforms will have to be built on smaller changes that may not always grab headlines. For the most part, the electorate understands this. It knows that the mess created over a decade cannot be undone in a day. But it needs to be assured that the processes for change are underway — and what better place to do so than through an address to the nation on Independence Day.