Project Monitor - - FRONT PAGE - HAR­ISH RAO Prime Min­is­ter Naren­dra Modi in the cock­pit: Will he stay the course?

he re­cent gen­eral elec­tion has not only given a clear man­date to a sin­gle party, af­ter a gap of three decades, it has also driven home two clear mes­sages: one, the de­vel­op­ment-stag­na­tion-pol­icy paral­y­sis and cor­rup­tion in high places has seen its im­pact per­co­lat­ing to the low­est level of the econ­omy with the com­mon man, in fact, be­ing the worst af­fected by them. And two, the elec­tions can no longer be won by just throw­ing free­bies at the poor. One only hopes that the rul­ing party has re­alised these facts.

Naren­dra Modi took less than a year to reach New Delhi from Gand­hi­na­gar. It took only a few hun­dred ral­lies, a few thou­sand kilo­me­ters of air travel and some ex­tra­or­di­nary or­a­tory skills. He was ably sup­ported by dumb op­po­nents and lav­ish fund­ing from In­dia's in­dus­trial pow­er­houses who are known for their ‘cash and carry’ busi­ness model. Hav­ing scored a de­ci­sive vic­tory over his op­po­nents (both within and out­side the party), Modi is now fac­ing his ‘Sophie's Choice’ mo­ment.

While the Modi-wave has al­ready en­gulfed do­mes­tic and for­eign in­vestors alike, all eyes are now on how the new govern­ment faces eco­nomic chal­lenges that lie ahead. Ac­ti­vat­ing stalled projects, restor­ing in­vestors’ con­fi­dence and, above all, restor­ing In­dia's long-term eco­nomic growth tra­jec­tory re­main pri­or­ity for him, and people are ex­pect­ing re­sults al­most im­me­di­ately. In fact, the list of ‘things to do’ is end­less and pri­ori­tis­ing them is even more dif­fi­cult as all of them need his ur­gent at­ten­tion.

It should be noted that the present down­turn in econ­omy is not a part of the eco­nomic cy­cle but the re­sult of struc­tural in­ad­e­qua­cies. Two ma­jor fac­tors have had a neg­a­tive bear­ing on in­vest­ment in the coun­try: the first is cor­rup­tion and the sec­ond is the pro­longed phase of in­de­ci­sive­ness. The ma­jor vic­tim of these two fac­tors is the in­fra­struc­ture sec­tor. Ev­i­dence of cor­rup­tion is widely preva­lent in cap­i­tal in­ten­sive in­dus­tries such as power, tele­com, min­ing, en­ergy, con­struc­tion and the like. But elim­i­nat­ing this will be a tall or­der given that politi­cians them­selves have vested in­ter­ests in these in­dus­tries and so the will­ing­ness to do away with cor­rup­tion will be min­i­mal. There is an end­less list of projects, es­pe­cially in in­fra­struc­ture, which are stuck up due to pol­icy paral­y­sis and in­de­ci­sive­ness.

How­ever, many things, be it do­mes­tic eco­nomic con­di­tion or ex­ter­nal po­lit­i­cal en­vi­ron­ment, don’t seem to go right for the present regime. The weather gods don’t seem to be too kind to Modi govern­ment ei­ther with ini­tial mon­soon re­ports show­ing scanty rain­fall in ma­jor parts of the coun­try. Food in­fla­tion, which ap­peared to have soft­ened in the be­gin­ning of the year, has once again res­ur­rected. In­sta­bil­ity in Iraq may im­pact the sup­ply as well as the price of crude oil. Dan­ger of ter­ror at­tacks, both from re­li­gious fun­da­men­tal­ists and Maoists within and from Ji­hadis out­side,

is a per­pet­ual prob­lem with no so­lu­tion in sight. Modi has got all these on a sil­ver plat­ter.

Most im­por­tantly, Prime Min­is­ter Naren­dra Modi should re­mem­ber that people have al­ready tasted 8 per cent plus eco­nomic growth and any­thing less than that will dis­ap­point them. So it is up to him whether to opt for the Gu­jarat model (of de­vel­op­ment) or the Lalu model, so long as he en­sures 8 per cent plus growth in the fore­see­able fu­ture. Any­thing be­low that will be con­sid­ered a fail­ure.

Let us hope that the new govern­ment won’t pour cold wa­ter on the as­pi­ra­tions of mil­lions of people, be­cause if it does then it would mean the sun has al­ready be­gun to set on the New Dawn, the theme of this spe­cial an­niver­sary is­sue.

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