The hits and misses of Modi’s years in power
In its one decade in power, the National Democratic Alliance (NDA) government has had its share of glides and stumbles in its path to implementing its reforms agenda. How close did it come to delivering on the promise of achchhe din (good days) through its various policies? In Part 7 and Part 8 of the “Election Pitch” series, we pick one significant reform from each year the government was in power, and give a status check of where things stand now. Part 8 appears tomorrow.
PMJDY has helped improve financial inclusion in India 2 1
mA DECADE after its launch, the Pradhan Mantri Jan Dhan Yojana (PMJDY) has over 520 million accounts with a total balance of around ₹2.32 trillion. The scheme provides a zerobalance bank account, a RuPay debit card and ₹1 lakh accident insurance. Despite early scepticism, it has largely been successful in providing formal banking to unbanked individuals, particularly in rural India, and forms one of the three pillars of India’s digital public infrastructure (the others being Aadhaar and ‘mobile’). However, there are some humbling reality checks that warrant attention. By December 2023, nearly a fifth of these accounts had not seen any customer-initiated transaction for over two years (though that’s similar to the overall banking sector, according to the government). The accident insurance component also has a sketchy record, with nearly a third of the claims being rejected since the scheme’s inception, according to data shared in the Rajya Sabha.
THE PRADHAN Mantri Awas Yojana (PMAY) aims to give financial aid for pucca housing to poor households. Its urban component (PMAY-U) was launched in 2015 as a scheme driven by states’ demand. The rural piece (PMAY-R), which came in 2016, aimed to build 29.5 million pucca houses in two phases.
Under PMAY-U, nearly 12 million houses were sanctioned of which 8 million were built as of February. PMAY-R has met 88% of its target. Women individually or jointly own nearly 72% of the houses under PMAY-R, against the national figure of 43% reported by the 2019-21 National Family Health Survey.
On the flip side, a Parliamentary standing committee has pointed to limited contribution by several states, leaving nearly 60% of the house cost burden on the beneficiary, potentially defeating the scheme’s goal. The scheme has also seen the exclusion of beneficiaries and fraudulent sanctions, according to an audit conducted in Tamil Nadu.
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THE DECISION to pull high-value currency notes (₹500 and ₹1,000) out of the system and to bring in another high-value note (₹2,000) has been seen as one of the government’s biggest policy blunders.
Supporters say demonetization helped speed up the digitization and formalization of the economy, but the period after demonetization also saw five million lost jobs, according to a 2019 report by researchers at Azim Premji University.
Nearly all the scrapped notes found their way back to the Reserve Bank of India (meaning that the initiative hardly removed any black money) and the new ₹2,000 note was eventually phased out last year (though it continues to be legal tender), raising more doubts about the purpose and success of the entire exercise.
Growth in GST collections has lagged that in income and corporate tax 5 4 N-E states lagging in building houses under PMAY-R The ₹2,000 currency notes were eventually phased out
IT TOOK nearly two decades to implement the goods and services tax (GST) framework, which subsumed 17 types of indirect tax, but it became one of the biggest reforms under the Modi government.
Several teething issues of the new regime have been resolved over the years. Seen as a notable example of a successful centrestate partnership through GST Council meetings, the indirect tax regime has also witnessed differences over how much states should be compensated for foregone revenue, and for how long.
The growth in GST collections has stabilized, but remains lower than that in income and corporate tax, even as it has surpassed nominal GDP growth in the past couple of years. While the implementation and stabilization of the GST regime is a feather in the government’s cap, it is still miles from simplifying the system as several tax slabs, input tax credit, and the compliance burden continue to attract criticism.
THE AYUSHMAN Bharat scheme, launched months before the 2019 elections, has been the centrepiece of the government’s affordable-healthcare initiative. Supporters say the scheme is an important step towards achieving the sustainable-development goal of universal health coverage. The scheme has provided for 65 million hospital admissions worth ₹81,979 crore so far, shows health ministry data.
Yet, hamstrung by low health spending, the scheme has faced teething issues on implementation, such as exclusion of eligible beneficiaries and under-utilisation of allocated funds, as highlighted in reports by the Comptroller and Auditor General and the Parliamentary panel on health.
This piece will continue tomorrow, when we look at the years 2019 to 2023. This is the seventh part of a series (https:// bit.ly/4aUpuHg) on top poll issues and the government’s 10-year report card.