My biggest challenge was to end the environment of gloom and restore confidence: PM Modi
In two years, I can say with utmost confidence that India has regained the trust & the strength that it is supposed to have: PM
Jan Dhan Yojana has linked the country’s poorest to the mainstream of the economy, its banking system: PM Modi
Have undertaken the maximum reforms in the last two years: PM Narendra Modi
There are far more reforms undertaken in the last two years compared to “big bang” reforms of last 10 years: Narendra Modi
Trying to create a concept of competitive cooperative federalism so that there is some competition among the state governments: PM
Want to structure the country’s economy around the three pillars: one third each of agriculture, manufacturing and services: PM Modi
Private and public sectors provide the bulk of job opportunities. My focus is to create a third sector, the personal sector: PM
Want people to become job creators through entrepreneurship: PM Narendra Modi
We have allowed 100% FDI in defense, insurance & railways in two years: PM Modi
In World Bank’s ratings of countries in terms of ease of doing business, India has jumped about 12 points in a short span of time: PM
Labor reform should not just mean “in the interest of industry.” Labor reform should also be in the interest of the laborer: PM
India is not standing in a corner. It is the world’s largest democracy and fastest growing economy: PM Narendra Modi
So far as the relationship with the U.S. is concerned, it’s the world’s oldest democracy and we are the largest: PM
True that Obama and I have a special friendship, a special wavelength: PM Modi
This is the era of development. Our focus should be development: PM Modi
Have made India a destination which welcomes capital by liberalizing FDI policy, increasing the ease of doing business: PM
The role of the State in the economy is best described in my maxim “Minimum Government, Maximum Governance”: PM
Our reform measures are now beginning to take full effect. We have a strong foundation therefore for further improvement: PM Modi
In my approach to governance, I emphasize transparency, on speed and on effective implementation: PM Narendra Modi
With a 7500-kilometer long coast line, India has a natural & immediate interest in the developments in the Indo-Pacific region: PM Modi
My government’s proactive agenda for a peaceful and prosperous neighborhood began from the very first day of my government: PM Modi

Indian Prime Minister Narendra Modi’s first two years in office haven’t included the overhauling of economic policy some had anticipated. Mr. Modi has turned out to be more of an economic policy tinkerer than the radical reformer some optimists had expected

Despite the disappointment of the investors and executives who had hoped Mr. Modi would become New Delhi’s most business-friendly prime minister ever, India’s economy has been doing better: Better relative to other countries and much better compared with the country before Mr. Modi and his party took over in New Delhi.

A look at 12 key indicators shows that Asia’s third-largest economy is now on much better footing than it was under the last government led by the Congress party and headed by Manmohan Singh.

In the fiscal year ended March 31, India’s gross domestic product rose 7.6%, helping it overtake China as the fastest-growing big economy in the world. That’s up from 6.6% in the last full fiscal year Congress was in power.

Inflation is almost half ofwhat it was at a couple of years ago. India’s budget deficit has shrunk to 3.9% of GDP from 4.4%. Foreign-direct investment and foreign exchange reserves have reached new peaks.

“India’s macroeconomic prospects have definitely improved relative to the period just before Prime Minister Narendra Modi took office,” said Chua Han Teng, Asia analyst at BMI Research.

Of the 12 indicators picked by The Wall Street Journal, as many as eight did better during the last fiscal year compared with the year before Mr. Modi came to power.

India’s stock market, exports and the money raised through the sale of stakes in state-controlled companies were all better during Prime Minister Singh’s last year but otherwise India seemed to experience some sort of Modi momentum.

Mr. Modi’s government has relaxed foreign-investment rules in more than a dozen sectors including insurance, pensions and railways, cut red tape and pushed through legislative proposals to simplify bankruptcy procedures and strengthen intellectual property rights. It has also fast-tracked road building, railway and highways expansion.

It has had some big legislative failures including the inability to get lawmakers’ approval for the crucial Goods and Services Tax as well as a new law to streamline the process of acquiring land for important projects.

Meanwhile, the strong economic fundamentals has not been doing much to lift corporate profits or consumer spending and India’s banks have been struggling to control a growing mountain of bad debt. Skeptics also point to the fact that much of India’s world-beating growth is a result of change last year in how GDP is calculated.

The Associated Chambers of Commerce and Industry of India scores the government seven out of 10 for its work in the past two years, describing it as a “work in progress.”

Some economists say the Modi administration needs more time for its policies to bear fruit.

“We think most investors under-appreciate the medium- to long-term positive impact of some of the policies being pursued by the current government,” Standard Chartered Bank said in a research note. “Although policy changes have been gradual and incremental, they are moving in the right direction.”

WSJ Source

Read an Edited Transcript of The Wall Street Journal’s Interview With Indian Prime Minister Narendra Modi

WSJ: Tim Cook was just in India. He seemed to enjoy his trip. Did that go well?

Mr. Modi: This was Tim Cook’s first visit to India. He was very excited about it. I think he got exposed to the full strength and measure of India’s diversity. I am myself quite techno savvy so I think our wavelengths matched quite quickly.

WSJ: I think it’s fair to say that when you were elected there was a tremendous amount of excitement around the world about your extraordinary victory. We’re two years in now from the initial excitement. How so far is the process of transforming and improving the Indian economy?

Mr. Modi: My election in 2014 had a context. There was a sense of policy paralysis, bad economic conditions and corruption. These issues were widespread and shadowed my country in 2012 and 2013. My biggest challenge was to end this environment of gloom and restore confidence.

Two years down the line, I can say with utmost confidence and a sense of belief that India has regained the trust and the strength that it is supposed to have. If you look at the statements that emanated around the time that the elections took place, what people used to say about BRICS was that the ‘I’ has fallen off. I think I can safely say that I have taken India to a position now where ‘I’ is actually topping the BRICS.

When I referred to a sense of policy paralysis, it was also accompanied by a sense of negativity and a sense of deep inertia in the government machinery.

If you see my Jan Dhan Yojana, you’ll find that I mobilized the whole government machinery so that in a definite period of time, the country’s poorest could be linked to the mainstream of the economy, its banking system. I can actually give scores of other examples like this.

The third issue when my government took over was corruption and the lack of transparency in government decision-making. My country had lost a lot of face on account of corruption relating to the coal scam, the scam involving auctions of the 2G network. But within a short and fixed time period, we have ensured transparency. Auctions are now actually held openly and online in front of media.

WSJ: All of those things have clearly changed in the past two years, but it is also true that people were expecting certain major reforms that your government has proposed, like land acquisition and changes in tax structure. You haven’t yet been able to achieve those. Were we right to expect those changes?

Mr Modi: Do allow me to respond to that in a slightly lighter vein if I may. When I came to the government, I used to sit down with all the experts and ask them to define for me what is the “big bang” for them. What are the reforms that they think would be categorized as “big bang?” I am sorry to say, but nobody could tell me clearly what was the “big bang” that they were looking for.

Secondly, in so far as the Land Acquisition Act is concerned, it was not there either in my party’s manifesto, or on my party’s agenda. But after we came into the government, my minister in charge of rural development chaired a meeting of chief ministers of different states. We found all the chief ministers, irrespective of their party affiliation, stating clearly that they will not really be able to undertake major development initiatives in their states unless this law was changed. So when all the chief ministers of different states of India requested the government, we, naturally, thought of taking it to Parliament. So we took the decision to take the Land Acquisition Act to Parliament. But what happened was that as soon as it was taken to Parliament, parties started taking a political position. When that happened, we called the chief ministers again and asked them how they wanted us to proceed. And their response was that the government should leave it to them to decide because it is a state subject. If we want to move forward, we’ll reform, if we don’t want to move forward, we won’t. They said this is their subject and the federal government shouldn’t get involved.

Some of the state governments have gone ahead and undertaken such reforms and the central government has supported that.

In India, reform in the insurance sector, reform in the defense sector, reform in the Bankruptcy Code had been pending for years. So I have actually undertaken the maximum reforms in the last two years. Now, had all these reforms not taken place, people would have said Modi’s “big bang” is stuck. Now that these have happened, it is no longer considered “big bang.”

In fact, if you were to compare the “big bang” reforms of the last 10 years with what we have done in the last two years, you will find that far more reforms have been undertaken in the last two years.

WSJ: In two years, have you created a more dynamic Indian economy as a result of what you have done? What else do you need to do?

Mr. Modi: See, so far as the Land Acquisition Act is concerned, it is over now. State governments can go ahead and we will give them permission. So what is actually called reform has happened. As far as GST is concerned, we expect to realize it within this year. By and large, all parties except the Congress are on board. We will get by in the numbers game [in Parliament’s upper house] also.

I have an enormous task ahead for myself and a dream for my country. Currently, the relationship between the federal government and the states essentially works as a cooperative federalism. What I am trying to do is to create a concept of competitive cooperative federalism so that there is some competition among the state governments in so far as their economic growth is concerned.

What I also want is to structure the country’s economy around the three pillars: one third each of agriculture, manufacturing and services, which I think is important for balanced and sustainable growth of the country’s economy. A major priority for me is, of course, the youth. The youth, in fact, matters a lot to me because around 800 million of India’s population is below 35 years of age and to create a skill set for that youth population, to create job opportunities for them, is a priority and a focus area for my government. Traditionally, you would hear of private and public sectors, two sectors that provide for the bulk of job opportunities. My focus is to create a third sector, the personal sector. Essentially implying that a person doesn’t merely look for jobs in the market but actually becomes a provider of jobs. He becomes a job creator through entrepreneurship.

WSJ: The last NDA government under Prime Minister Vajpayee was praised and made a big mark with the privatization of public-sector companies. Should we expect that and, if not, what does that tell people about how you view the role of the private sector in helping you achieve your goals?

Mr. Modi: Actually, in any developing country in the world, both the public sector and the private sector have a very important role to play. You can’t suddenly get rid of the public sector, nor should you. But if you look at the last two years of my government, and if you look at the entire post-independence phase of the country, you will find that in terms of money volumes the maximum disinvestment has taken place in the last two years.

WSJ: So no privatization, then?

Mr. Modi: Disinvestment has taken place in that process. I’ll talk about privatization. In defense, in my country, there was no private investment. Today I have allowed it to 100%. In insurance, private investment was not allowed. I have allowed it. In the railways, I have for the first time developed a public-private partnership model for railway stations, which will raise the economic strength and efficiency of railways. I have allowed 100% foreign direct investment in the railways. I’ve taken all these initiatives in two years, and you can see the big results.

WSJ: Do you believe that colonial-era labor laws need to be changed? Is there a reform program for BJP–ruled states that you can prescribe that other states can then emulate? Right now, the process is quite slow.

Mr. Modi: I don’t think the process has been slow. It has actually been fairly rapid. If you take, for example, my government’s target to develop smart cities all around India, we are actually working on something known as “the challenge route,” which has expedited interest among states to develop smart cities within their own jurisdiction. If you look at the ease of doing business, we have partnered with states very intensely and very extensively. As a result of that, in the World Bank’s ratings of countries in terms of ease of doing business, India has jumped about 12 points in a short span of time.

Our focus is to associate as many states as possible irrespective of their political affiliation. Because ultimately every state is a key unit of economic activity within the country and we realize that we can’t really progress without them.

Labor reform should not just mean “in the interest of industry.” Labor reform should also be in the interest of the laborer. I am in favor of different kinds of reforms so that we have a win-win situation for both. We have changed the laws for internships. We had an inspector raj earlier under which inspectors would turn up for inspection anywhere at will. But we said no, there shall be a computer draw and an inspector can visit only that company so that the company is not harassed. There are some states that don’t have industry but are primarily agricultural. They don’t need labor reform. Those states that have a substantial manufacturing sector, they need labor reform. And their state assemblies can adopt them. It is a joint subject of the states and the center, and if they send it to me, I will allow them.

WSJ: Do you need to ease hire and fire rules?

Mr. Modi: This is a western phrase. In India, we have an environment of closeness. In our social milieu, in a family, the grandfather may be a driver and when he gets old, his grandson may be doing the driving. But all three remain employed in the family. That is our environment. You need to understand that environment. Just a play of words won’t work. You have to move beyond that.

WSJ: I travel a lot in Asia and everywhere I speak to governments they express concern about China’s increasing assertiveness. The U.S. is very keen on India, the rising power that India is, to be part of, if not an alliance, then at least a grouping that can stand up to some extent to China. Where do you see India taking a position on the global stage?

Mr. Modi: There is no reason to change India’s non-alignment policy that is a legacy and has been in place. But this is true that today, unlike before, India is not standing in a corner. It is the world’s largest democracy and fastest growing economy. We are acutely conscious of our responsibilities both in the region and internationally.

So far as the relationship with the U.S. is concerned, it’s the world’s oldest democracy and we are the largest. Many of our values match. Our friendship has endured, be it a Republican government or a Democratic. It is true that Obama and I have a special friendship, a special wavelength. Beyond our bilateral relationship, whether it is global warming or terrorism, we have similar thoughts, so we work together. But India doesn’t make its policies in reference to a third country. Nor should it.

We don’t have any fighting with China today. We have a boundary dispute, but there is no tension or clashes. People-to-people contacts have increased. Trade has increased. Chinese investment in India has gone up. India’s investment in China has grown. Despite the border dispute, there haven’t been any clashes. Not one bullet has been fired in 30 years. So the general impression that exists, that’s not the reality.

WSJ: But you have talked recently about countries taking an 18th century expansionist approach to the region, to Asia. I am guessing you were referring to China there. Is that correct? Would you be willing to work more closely militarily with the U.S. and Japan to reassure others in the region that are concerned about China?

Mr. Modi: There are two issues. It is my general principle that 18th century thinking won’t work in the 19th, 19th century thinking won’t work in the 20th, 20thcentury thinking won’t work in the 21st. My philosophy in this broad perceptive is that there was an era of expansionism, but today is the era of development. I have said for many years that our focus should be development.

There was an age when the world was divided into two camps. That is not true anymore. Today, the whole world is interdependent. Even if you look at the relationship between China and the U.S., there are areas where they have substantial differences but there are also areas where they have worked closely. That’s the new way. If we want to ensure the success of this interdependent world, I think countries need to cooperate but at the same time we also need to ensure that there is a respect for international norms and international rules.

WSJ: I want to ask your response to these three words: President Donald Trump

Mr. Modi: If I was a political worker, I could have commented on that. But I am the prime minister of the world’s largest democracy. My views on the internal politics of any country and that too at the peak of their election cycle won’t be in fitness of honoring democratic values. I should maintain my discipline.

As an aside, if elections were ongoing in the U.K., I wouldn’t comment [on Brexit.] But no elections are ongoing and there is a discussion there about whether it should or not stay in Europe. I have said publicly that for us, the U.K. is the gateway to Europe and, in the situation that the world is in, a united Europe would be favorable.

WSJ: You’ve heard what Donald Trump has said about Muslims and about a temporary ban on Muslims entering the U.S. Your country has nearly 200 million Muslims, the second largest Muslim population in the world. That must be of concern to a lot of Indians. Is it of concern to you when you hear something like that from a man who could be the President of the U.S.?

Mr. Modi: I think that an election is taking place there. These are issues of debate in the election. A government shouldn’t respond to that. After a new government is formed, if they bring any new thoughts, whoever wins, we will surely respond as a government. But as a part of the election debate many things will be said there, who ate what, who drank what, how can I respond to everything?

WSJ: Do you support the reappointment of Mr. Rajan, the central bank governor?

Mr. Modi: I don’t think this administrative subject should be an issue of interest to the media. Besides, it will come up only in September.

In supplemental written responses to questions, Mr. Modi said:

WSJ: Your election has sparked enormous optimism about the Indian economy. What are the most important steps India can take to thrive in the changing global economic order?

Mr. Modi: When we took office, the economy was in a nose-dive with policy paralysis, rampant corruption and loss of confidence among both domestic and international investors. Our first task was to end the dive and bring the economy to a level flight path. The second task was to begin to ascend. We have successfully done both. It is a paradox that when global growth was consistently high, India did not take advantage of it, and now when India has taken off, the global economy is doing badly.

In two years, we have done a lot to position India to thrive in the changing world. To set a strong foundation for sustainable growth, we have run the most prudent macro-economic administration in decades, reducing fiscal and current account deficits. We have made India a destination which welcomes capital by liberalizing foreign-direct investment policy, increasing the ease of doing business and bringing predictability in taxation. We will continue our upward trajectory on all of these.

WSJ: When you think about building the Indian economy of the future, which countries do you look to as models? Which countries provide cautionary tales?

Mr. Modi: India is such a large and diverse country that we can learn from different countries in different areas and follow those best practices. We can learn from American regulatory practices, Japanese quality improvement, European social protection etc. But above all our model has to be our own, rooted in our ethos.

As regards cautionary tales, I believe that our growth model has to stay close to Indian ‘sanskriti’ or culture to avoid the environmental problems of the developed world. This teaches us to live life in moderation, care for nature and avoid waste. Our forefathers always consumed less than they could have, and left more for the next generation. This applies to the environment as much as to the economy. I think this ethos will help India not only achieve sustainable growth but also improve the environment at the same time, and show a new path to the world.

WSJ: What is the proper role for the state in the economy?

Mr. Modi: The role of the State in the economy is best described in my maxim “Minimum Government, Maximum Governance.” The state should be an enabler: a fair and transparent enabler creating an environment for sustainable growth and job creation, and giving a sense of belief to the people.

In a developing economy, state enterprises do have a role in some sectors. They have to be managed professionally and efficiently. We have given them operational freedom and brought in talent from the private sector as well to facilitate this. The state need not do business in certain sectors. We have a new policy on strategic disinvestment. We are in the process of identification of entities for strategic sale.

WSJ: Is India ready to scale back this entitlement spending? What would be the political consequences of doing that?

Mr. Modi: Programs to provide a social-security net are found in every country including yours, where you provide unemployment benefits and food stamps. In the case of NREGA, instead of a dole, some form of employment is provided. After coming to power, we have given priority to the dignity of labor, for which economic empowerment is the first step. We are eliminating through technology the leakages which were discrediting such programs. We are re-orienting them towards creating assets like water bodies which protect the environment, and towards creating permanent skills through training.

WSJ: How is being prime minister different from being chief minister in Gujarat?

Mr. Modi: Only a few other prime ministers had worked earlier as chief minister and none of them had spent as much time as I had as chief minister. In our federal structure, most of the programs that touch the common citizen are implemented at the state level. Therefore I have found, as prime minister, that my experience as chief minister is my greatest strength. I believe in cooperative federalism and all the states are equal partners. We make no distinction between states ruled by different parties and actively encourage all states to promote reforms that benefit the country.

WSJ: Do you think India is growing at its full potential?

Mr. Modi: Our current growth has to be viewed in context. We took over at a time of economic crisis. After we took over, we have faced two consecutive years of drought, and global recession. In these adverse circumstances, we have achieved a high rate of growth. The reform measures we have taken are only now beginning to take full effect. We have a strong foundation therefore for further improvement. If global conditions improve, then India’s prospects will be even better. However, for a country like India, high growth for a few years is not what we need. Global experience shows that to transform any country, we need sustainable high growth for 30 years.

WSJ: How does your economic philosophy, approach to governance and views on fighting poverty differ from those of Congress?

Mr. Modi: There are two ways to fight poverty. The government can fight poverty, or the government and the poor can jointly fight poverty. When the government tries to fight poverty, it essentially attempts to “help” the poor. When the government and the poor join to fight poverty, the poor are empowered, made self-reliant and given the tools to transcend their poverty. The government’s role in this joint fight is to provide the poor with resources, opportunity and hand-holding. I believe in the joint fight against poverty. In approach to governance, the key difference is my emphasis on transparency, on speed and on effective implementation.

WSJ: Could you share your thoughts on the idea of “economic reform” in India?

Mr. Modi: For me, reforms are those that transform the lives of ordinary citizens. We have passed legislation covering a new insurance law with enhanced foreign-investment limits; inflation targeting with an independent monetary policy committee for the Reserve Bank; a Bankruptcy Code; and a regulatory framework for real estate. Through executive action, there have been sweeping reforms including opening up nearly all sectors, including defense, to foreign investment; de-controlling fuel prices; permitting listing of stock exchanges; licensing many new banks; and ensuring every family including the poorest, has a bank account. There was a time when these were called “big bang” reforms. The point I have been making is that one should not forget what is done and refer only to what remains as “big bang”.

WSJ: What is driving your decision to deepen bonds between New Delhi and Washington?

Mr. Modi: There was a time when relationships between countries were confined to the capitals: Washington and Delhi or London and Beijing. The U.S. is India’s important strategic partner. We have enjoyed a warm relationship with the United States, regardless of whether the United States has a Republican or Democratic administration. During the last two years, President Obama and I have led the momentum; we are capturing the true strength and scale of our strategic, political and economic opportunities, and people to people ties. Our ties have gone beyond the Beltway and beyond South Block.

Our concerns and threats overlap. We have a growing partnership to address common global challenges viz., terrorism, cyber security and global warming. We also have a robust and growing defense cooperation. Our aim to go beyond a buyer-seller relationship towards a strong investment and manufacturing partnership.

WSJ: What is your view of China’s increasing investments and military presence in the Indian Ocean region? Could India gain from joining China’s efforts to better connect Asia and Europe, such as the new Maritime Silk Road initiative?

Mr. Modi: With a 7,500-kilometer long coast line, India has a natural and immediate interest in the developments in the Indo-Pacific region. We have excellent relationships with the littoral states of the Indian Ocean. India is a net security provider in the Indian Ocean region. We, therefore, watch very carefully any developments that have implications for peace and stability in this region.

Connectivity has been central to human progress over centuries. We are engaged with many countries to develop infrastructure, in our region and beyond, for better connectivity. With regard to the Maritime Silk Road initiative, it is a Chinese initiative. We feel that the world needs to hear more from China on this initiative, especially its intent and objective.

WSJ: What led to the recent breakthrough with Pakistan and drove your decision to personally visit to Prime Minister Sharif in Lahore? Do you think improving ties will help curb terrorism?

Mr. Modi: My government’s proactive agenda for a peaceful and prosperous neighborhood began from the very first day of my government. I have said that the future that I wish for India is the future that I dream for my neighbors. My visit to Lahore was a clear projection of this belief.

I have always maintained that instead of fighting with each other, [India and Pakistan] should together fight against poverty. Naturally we expect Pakistan to play its part.

But, there can be no compromise on terrorism. It can only be stopped if all support to terrorism, whether state or non-state, is completely stopped. Pakistan’s failure to take effective action in punishing the perpetrators of terror attacks limits the forward progress in our ties.

In my view, our ties can truly scale great heights once Pakistan removes the self-imposed obstacle of terrorism in the path of our relationship. We are ready to take the first step, but the path to peace is a two-way street.

WSJ Source

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’பரவாயில்லை இருக்கட்டும்’ என்ற மனப்பான்மையை விட்டு விட்டு “ மாற்றம் கொண்டு வரலாம்” என்று சிந்திக்கும் நேரம் இப்போது வந்து விட்டது : பிரதமர் மோடி

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’பரவாயில்லை இருக்கட்டும்’ என்ற மனப்பான்மையை விட்டு விட்டு “ மாற்றம் கொண்டு வரலாம்” என்று சிந்திக்கும் நேரம் இப்போது வந்து விட்டது : பிரதமர் மோடி
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New India believes in market forces, will be the most preferred investment destination: PM Modi
October 29, 2020

1.It’s been seven months since India launched its fight against coronavirus through the first lockdown in March. What’s your assessment on how we have fared?

I am sure we all agree that this virus is something unknown, nothing like what has happened earlier in the past. So, while tackling this new unknown enemy, our response also evolves

I am no health expert but my assessment is based on numbers. I think we should assess our coronavirus fight against the metric of how many lives we are able to save.

The virus is proving to be very fickle. At one time, some places like Gujarat were seen as hot spots while the situation seemed to be under control in Kerala, Karnataka etc. After a few months, things have improved in Gujarat but turning for the worse in Kerala.

This is why I feel there is no room for complacency. I stressed the same in my recent message to the nation on October 20 that the only way forward is to take precautions such as wearing mask, hand washing and social distancing because ‘Jab tak dawai nahin, tab tak dhilai nahin.’

2. But has it broadly panned out the way you expected or have you had to improvise and innovate constantly?

We decided to be proactive and introduce a timely nationwide lockdown. When we introduced a lockdown, the total number of cases was in a few hundreds, unlike many countries that adopted a lockdown when the cases were in the thousands. We imposed lockdown at a very critical point in the pandemic trajectory.

We not only got the broad timing of various phases of lockdown right, we also got the unlock process right and much of our economy is also coming back on track. The data for August and September indicates that.

India has taken a science-driven approach in response to Covid-19 pandemic in the country. Such an approach proved beneficial.

Studies now show that this response helped avoiding a situation which could have led to rapid spread of the virus with many more deaths. In addition to the timely lockdown, India was among the first countries to mandate wearing of masks, use a contact-tracing app and deploy rapid antigen tests.

For a pandemic of this dimension, it would not have been possible to manage if the country was not united. The entire country stood together to fight this virus. The Covid warriors, who are our frontline healthcare workers, knowing well the threat to their life, fought for this country.

3. What’s your biggest learning?

One positive learning in the past few months has been the significance of delivery mechanisms that reach the last mile. Much of this delivery mechanism was built in the first term of our government and it has helped us immensely in facing this once-in-a-century pandemic.

I will give just two examples. First, through the Direct Benefit Transfer regime, we were able to transfer cash straight to the bank accounts of millions of people almost instantly. This entire infrastructure to enable this was built in the last six years. Earlier, even in relatively smaller natural calamities, relief did not reach the poor and there was massive corruption.

But we were able to reach relief on a massive scale to people in a very short time, without any complaints of corruption. That is the power of technology in governance. To give a contrast, perhaps you could enlighten your readers on how India fared during the smallpox epidemic in the 1970s.

And second, the behavioural change that a billion-plus people had adapted to in such a short span of time — wearing masks and maintaining social distance — is a world model of public participation without any coercive enforcement.

Union and state governments have been working in a seamless manner as one team, public and private sectors have come together, all ministries converged to shoulder diverse responsibilities, and peoples’ participation ensured a united and effective fight.

4. What’s your assessment of the state of spread of Covid-19 in India?

The pro-active measures taken in the early stages of the virus has helped us prepare our defences against the pandemic. Though, even one untimely death is extremely painful, for a country of our size, openness, and connectivity, we have among the lowest Covid-19 mortality rates in the world. Our recovery rate continues to be high and our active cases are significantly falling.

From a peak of almost 97,894 daily cases in mid-September, we are reporting only around 50,000 new cases in late October. This has been made possible because entire India came together and worked as Team India.

5. Recent trends suggest a bending of the curve both in active cases and fatalities, raising hopes that the worst may be behind us. Do you also share this view, based on data available with the government?

This is a new virus. Countries which had initially controlled the outbreak are now reporting a resurgence.

The geographical spread of India, population density, the regular social gatherings must be kept in mind when we look at these numbers and seek to compare with others. Many of our states are larger than countries.

Within the country, the impact is very diverse — there are some areas where it’s minimal, while there are some states where it’s very focused and persistent. Yet it must be kept in mind that in a country with more than 700 districts, the impact is seen only in some districts of a few states.

Our latest numbers of new cases, mortality rate and total active cases do indicate a lower phase than some time ago, yet we cannot be complacent. The virus is still out there. It thrives on our complacency.

I feel that our response should be focused on increasing capabilities to handle the situation, make people more aware, create more facilities etc in keeping with the dictum ‘Hope for the best but prepare for the worst’.

6. The Covid-19 pandemic has had a debilitating impact on the economy, which you have sought to address by aiming to strike the right balance between lives and livelihood. How successful do you think the government has been in this endeavour?

It has been more than seven decades since we got Independence, but still some people have the colonial hangover that people and governments are two different entities. The perception that this calamity has fallen on the government emanates from this mindset. The pandemic has affected 130 crore people and both the government and the citizenry are working together to combat it.

Since the time Covid-19 started, it was frightening to witness scores of people dying in various countries all over the world. Their health systems were crumbling under the sudden load of patients. Both old and young were dying indiscriminately. At that point, our aim was to avoid a similar situation in India and to save lives. This virus was like an unknown enemy. It was unprecedented.

When one is fighting an invisible enemy, it takes time to understand it and evolve an effective strategy to counter it. We had to reach out to 130 crore Indians and make them aware of the dangers we are facing from the virus and the manner in which we could save ourselves and our family members.

It was a very challenging task. It was important to awaken Jan Chetna. Awakening of Jan Chetna becomes possible only through Jan Bhagidari. Through Janata curfew, signifying the collective national resolve by banging of thaalis or by coming together by lighting lamps, we used Jan Bhagidari to bring all Indians on one platform. This is an incredible example of mass awareness in a short span of time.

7. And what was the economic strategy?

Saving lives was not limited to saving lives from Covid-19. It was also about providing enough food and essentials to the poor. Even when most of the experts and newspapers were asking the government to release an economic package for the corporate sector, our focus was to save lives among the vulnerable populations. We first announced PM Garib Kalyan package to alleviate the suffering of the poor people, the migrants, farmers.

One special insight and understanding that came early to us was that the agriculture sector is one where the rule of social distancing can be more naturally maintained without compromising on productivity. So, we allowed agriculture activities almost from the very start. And we all see the results today with this sector doing exceptionally well despite so many months of disruption.

Record distribution of foodgrain, Shramik Special trains and proactive procurement were undertaken for both the immediate and medium-term needs of the people.

To ameliorate the hardships being faced by people we came up with an Atmanirbhar Bharat package. This package addressed issues being faced by all sections of the society and all sectors of the economy.

This also provided us an opportunity to carry out reforms that were waiting to happen for decades but no one earlier took the initiative. Reforms across sectors such as coal, agriculture, labour, defence, civil aviation and so on have been undertaken which will help us get back on the high growth path that we were on before the crisis.

Our efforts are bearing result as the Indian economy is already getting back on track faster than expected.

8. Your government has initiated two key second-generation reforms — the farm and labour reforms. How optimistic are you of these initiatives delivering the desired economic dividend, especially in the light of overall economic slowdown and political opposition?

Experts have been advocating these reforms for a long time. Even political parties have been asking for votes in the name of these reforms. Everyone desired that these reforms should happen. The issue is that the opposition parties do not wish that we get the credit.

We also don’t want credit. We brought reforms keeping in mind the welfare of farmers and workers. And they understand and trust our intentions because of our track record.

We have gone about reforming the agriculture sector step by step in the past six years. So what we have done today is one piece in the chain of actions that we started in 2014. We also hiked MSPs multiple times and in fact, we procured many times more from farmers at MSP than earlier governments did. Both irrigation and insurance saw huge improvement. Direct income support was ensured for farmers.

What has been lacking in Indian farming is commensurate return for all the blood and toil put in by our farmers. The new structure brought by these reforms will significantly increase the profitability of our farmers. As in other industries, once the profits are earned, it is reinvested back in the sector for generating more produce. A virtuous cycle of profit and reinvestment emerges. In the farming sector as well, this cycle will open doors for more investment, innovation and new technology. Thus, these reforms hold immense potential to transform not just the agriculture sector but the entire rural economy.

On MSP, in the just completed Rabi marketing season, the Central government has procured 389.9 lakh MT of wheat, an all-time record, with 75,055 crore going to farmers as MSP.

In the ongoing Kharif marketing season, up to 159.5 lakh MT of paddy has been procured, compared to 134.5 lakh MT at the same point last year, an increase of 18.62%. All this happened after we brought the three ordinances, which have now been passed by Parliament.

MSP payment to farmers for paddy has gone up by 1.5 times, wheat by 1.3 times, pulses by 75 times and oilseeds by 10 times during the last five years compared to five years of UPA-2 (2009-10 to 2013-14). This proves the lie and dishonesty of those who are spreading the canard about MSP.

9. And what about labour reforms?

These reforms are very pro-worker. They are now entitled to all benefits and social security even if hired for fixed term. The labour reforms will help create significant employment while also protecting the worker by ensuring minimum wage reforms, provision for social security for workers in the informal sector, and minimising government interference. It will ensure timely payment of wages and give priority to occupational safety of the workers, thus contributing to a better working environment.

In the last few weeks, we have finished what we had set out to do. The 44 central labour laws with over 1,200 sections have been assimilated into just four codes. There will now be just one registration, one assessment and one return filing. Along with easier compliance, this will lead to a stable regime for businesses to invest and create a win-win situation for the employee and the employer.

For manufacturing sector, in the last six years, we have taken a number of reform measures from cutting down corporate tax rate to 15% for new manufacturing units to raising FDI limits and allowing private investment in strategic sectors like space, defence and so on. Essentially, reforms for the manufacturing sector were in place with one piece of the jigsaw remaining — the labour reforms. We have done that as well. It was often jokingly said India had more labour laws than labour in the formal sector. Labour laws often helped everyone except the labour. Holistic growth cannot happen until India’s workforce gets the benefits of formalisation.

I am confident that these reforms undertaken in the last few months will help increase the growth rate and returns in both the manufacturing and agriculture sectors. Moreover, it will also signal to the world that this is a new India which believes in markets and market forces.

10. One criticism is that the flexibility to lay off employees has been extended to factories employing up to 300 people. But giant factories in electronics, garments and other sectors employ many more. Why not extend this flexibility to all factories while sharply increasing compensation for those laid off? Also, what are your views on the criticisms around curtailment of the right to strike?

India was suffering from a twin problem: Our labour laws were such that most workers did not have any social security. And companies did not want to hire more workers for the fear of labour laws, which disincentivised labour-intensive production. The inspector-raj system and complicated labour laws had a strong deterrent effect on employers.

We need to come out of the mindset that industry and labour are always in conflict with each other. Why not have a mechanism where both benefit equally? Since labour is a concurrent subject, the law gives flexibility to state governments to modify the codes further as per their unique situation and requirements.

The right to strike has not been curtailed at all. In fact, trade unions have been conferred with a new right, enabling them to get statutory recognition.

We have made the employer-employee relation more systematic and symmetrical. The provision of notice period gives an opportunity for amicable settlement of any grievance between employees and employers.

11. The GST system has come under considerable stress from Covid-19. The Centre has for now agreed to borrow money and pass on to states. But looking ahead, how do you foresee the situation for state governments?

The last six years have seen the spirit of competitive and cooperative federalism in all our actions. A country as large as ours cannot develop only on the one pillar of the Centre, it needs the second pillar of states. The fight against Covid-19 also got strengthened because of this approach. Decisions were taken collectively. I had video-conferences with CMs multiple times to hear their suggestions and inputs, which has no parallel in history.

On the GST, this is by all accounts an extraordinary year. Most assumptions and calculations did not take into account a once-in-a-century pandemic. Yet, we have proposed options to move forward and most states are fine with them. A consensus is evolving.

12. You have been a chief minister for many years. What kind of collaboration do you propose with states on the economic side in the current context?

It’s important to remember that the Centre-state relationship is not limited to GST. Despite the pandemic and the fall in gross tax revenue, we have provided enhanced resource transfers to states. Between April and July, the sum total of devolution of taxes plus grants-in-aid to states, including centrally sponsored schemes, increased by 19% to 4.06 lakh crore from 3.42 lakh crore in the same period last year. In short, while our revenues fell, we sustained the flow of funds to states.

In view of the Covid-19 pandemic, the central government also allowed additional borrowing limit of up to 2% of Gross State Domestic Product (GSDP) to states for the year 2020-21. This amounted to 4.27 lakh crore being made available to states. The Centre has already granted permission to states to raise the first 0.5% in June 2020. This made an additional amount of 1,06,830 crore available to states. On the request of states, the limit of using the State Disaster Response Fund (SDRF) has been increased from 35% to 50%. This was done to ensure more finances with states to fight Corona.

13. Many argue that the Centre passes its troubles to states. Your thoughts?

Let me give you an example of what used to happen earlier. When VAT replaced the CST under the UPA government, they had promised to compensate states for any revenue shortfall. But you know what UPA did? They refused to compensate states despite their commitment. Not just for one year but continuously for five years. This was one of the reasons why states did not agree to GST regime under UPA. Despite the fact that it was a different government which made that commitment, we took it upon ourselves to clear those dues when we assumed power in 2014. This shows our approach to federalism.

14. The government’s critics have said India ended up high on both columns — number of infections and economic contraction. How do you respond to such criticism?

There are some people who are so intelligent that they use absolute number of cases to compare our country with other countries which have population similar to our states.

However, I expect The Economic Times to do better research and not regurgitate such arguments. While looking at our current numbers, we should also look at what kind of huge numbers were forecast by experts in March.

15. What are the five economic parameters you would point to as clear indicators of a bounce back? Specifically, what kind of a rebound do you expect next year?

We are on our way to economic recovery. Indicators suggest the same. First, in agriculture, as I said earlier, our farmers have broken all records and we have also done record procurement at the highest ever levels of MSP. These two factors — record production and record purchase — are going to inject significant income in the rural economy which will have its own virtuous cycle of demand generation. Second, record high FDI inflows indicate India’s growing image as an investor friendly country. This year, despite the pandemic, we received the highest ever FDI of $35.73 billion for April-August. This is 13% higher than the same period last year, which was also a record year. Third, auto sales along with tractor sales are either reaching or surpassing previous year levels. This indicates a strong resurgence in demand. Fourth, a steady recovery in the manufacturing sector helped India climb two notches to the third position among key emerging markets after China and Brazil in September. The manufacturing growth is reflected in the first year-on-year rise in exports in seven months. E-way bills and GST collections growth has also been healthy.

Finally, in terms of new net subscribers of EPFO, the month of August 2020 registered a 34% jump compared to July 2020 with addition of more than a million new subscribers. This shows that the job market is picking up.

Other than that, foreign exchange reserves have touched a record high. Key indicators of economic recovery like railway freight traffic increased by more than 15% and power demand by 4% in September over the same month last year. This shows that recovery is broad based. Plus, Aatmanirbhar Bharat announcements are a big stimulus to the economy, particularly to small businesses and the informal sector.

16. What’s your plan for further stimulus?

We will take all measures needed to constantly stimulate the economy in a timely manner while ensuring overall macro-economic stability. Remember, we are still not over with the pandemic. Yet, our economy has shown a remarkable capability to bounce back, largely because of the resilience of our people. This is something which is not captured in these numbers, but is the reason behind those numbers. The shop-owner, the trader, the person running a MSME, the person working on factory floor, the entrepreneur, all these are the heroes responsible for the strong market sentiment and revival of the economy.

17. You seem to believe that India can still emerge as a major world hub for manufacturing, especially by becoming part of global supply chains at a time when companies are looking to de-risk their exposure to China. What is the progress in this regard? Can India emerge as a credible alternative to China in global supply chains?

India has not started speaking about manufacturing only after the pandemic. We have been working on increasing manufacturing for sometime now. India is, after all, a young country with a skilled workforce. But India doesn’t believe in gaining from the loss of others. India will become a global manufacturing hub on its own strengths. Our effort is not to become some country’s alternative, but to become a country which offers unique opportunities. We want to see the progress of all. If India progresses, 1/6th of humanity will progress.

We saw how a new world order was formed after World War II. Something similar will happen post Covid-19. This time, India will ride the bus of manufacturing and integrating in global supply chains. We have specific advantages in the form of democracy, demography and demand.

18. So, what are the policy measures you propose to enable India take this giant leap?

India’s pharma sector, during the past few months, has already demonstrated the way ahead. India has emerged as a key player in global pharma supply chains. We have become the second largest manufacturer of PPE kits in a very short duration. India is also making a mark in manufacturing technologically advanced items like ventilators and from almost negligible capacity earlier, we are now manufacturing thousands of ventilators in quick time.

From independence till the pandemic started, around 15-16 thousand ventilators in working condition existed in government hospitals across India. Now, we are moving rapidly towards adding another 50000 ventilators these hospitals.

Now, that we have successfully established this model. We can emulate it in other fields. Our recently launched production-linked incentive (PLI) schemes for mobile manufacturing, pharmaceutical and medical devices are good examples of this focused and targeted approach to attract internationally reputed investors to create capacities with global scales and competitiveness, as well as make India their export hub. In the mobile phone segment alone, it’s expected that production worth over 10 lakh crore will take place over the next five years, of which 60% will be exports.

According to Moody’s, 154 greenfield projects from the US have come to India in 2020, compared to 86 in China, 12 in Vietnam and 15 in Malaysia. This is a clear indication of global confidence in India’s growth story going forward. We have laid strong foundations to make India the foremost manufacturing destination.

The corporate tax cut, introduction of commercial mining in coal sector, opening up of space sector for private investment, lifting defence restrictions on air routes for civil aviation use, are some steps that will go a long way in boosting growth.

But what we should also understand is that India can grow only as fast as our states do. There needs to be healthy competition among the states in attracting investment. States are also competing on the Ease of Doing Business rankings. Incentives alone may not be enough to bag investments, states will need to build infrastructure and follow good development-related policies.

19. There is fear in some quarters that the Atmanirbhar initiative marks a return to the days of autarky. Some say there is a contradiction between India seeking to become part of global supply chains while restricting imports. Your views?

It’s not in the nature of India or Indians to be inward looking or self-centered. We are a forward-looking civilization and a vibrant democracy that looks to interact with other countries to build a better world. Aatmanirbhar Bharat is not just about competition but also about competence, it’s not about dominance but about dependability, it’s not about looking within but about looking out for the world.

So, when we say Aatmanirbhar Bharat, we mean an India that is, first of all, self-reliant. A self-reliant India is also a reliable friend for the world. A self-reliant India does not mean an India that is self-centred. When a child reaches the age of 18, even the parents tell him or her to become Aatmanirbhar. This is natural.

Today we are using our aatmanirbharta to help the world in the medical field. For instance, we are producing vaccines and drugs without increasing costs or putting restrictions. A relatively poor country like ours incurs a huge cost to educate doctors, who are today spread across the globe, helping humanity. We never stopped them from migrating.

When India becomes Aatmanirbhar in a certain field, it always helps the world. If someone doesn’t understand the ethos and spirit of India, they won’t understand this concept.

20. So, there’s no contradiction?

Confusion among experts is not necessarily a contradiction in our approach. We have just eased restrictions for FDI through reforms like you see in agriculture, labour and coal. Only a country that believes in the power of international trade and commerce would go on opening up more and more avenues to work with the world. At the same time, it’s also true that India has been unable to realise its potential in sectors where it has inherent comparative advantages. Take coal for instance. India imported nearly 1.5 lakh crore worth of coal in 2019-20, despite having one of the biggest reserves in the world. Defence is another area of import dependence for us. While we have increased the FDI limit from 49 to 74%, domestic production for 101 items worth 3.5 lakh crore over the next five years has also been announced.

In the past, while opening our markets, we also signed 10 free trade agreements (FTAs) and 6 preferential trade agreements (PTAs). The assessment of existing FTAs should happen on the metric of how they have benefited for India and not on the basis of ideological standing.

India is keen to be part of global value chains and wants to do trade deals but they have to be fair and non-discriminatory. Moreover, since India would be providing access to a large market, the agreements must be reciprocal and balanced.

We gave preferential access to our large market under our FTAs. However, our trading partners have not always reciprocated with the same treatment. Our exporters have often faced ill-intended non-tariff barriers. For example, while our trading partners can export steel to India, few trading partners don’t allow the import of Indian steel. Similarly, Indian tyre manufacturers are unable to export due to technical barriers. While India remains committed to openness and transparency in trade, it will use the measures and instruments at its disposal in ensuring free and fair access for its exporters.

In the case of RCEP, India made its best efforts for a final conclusion. We wanted a level playing field based on fair trade practices and transparency. We expressed serious concerns over non-tariff barriers and opaqueness of subsidy regimes in some RCEP countries. India took a considered position not to join RCEP, highlighting the fact that the current structure did not reflect RCEP guiding principles nor address outstanding issues.

21. It appears from government assessments that FTAs have not worked in India’s favour. We also walked out of RCEP. How has your thinking evolved on subject? Do you think we should pursue FTAs at all?

The guiding principle behind International trade is to create win-win solutions for all countries involved. And I am told by experts, that ideally trade deals should be global and multilateral through the WTO. India has always adhered to global trade rules and stood for a free, fair, equitable, transparent and rules-based international trading system, which should fulfil the intended developmental objectives and aspirations of developing countries, as envisaged under the WTO.

22. India has emerged as a major producer of PPE and masks. Pharma has emerged as a strategic sector. Going forward, how do you strengthen our advantage in this area?

We realised at the start of the pandemic that we were dependent on imports for PPEs. The problem aggravated after countries imposed lockdowns, which affected manufacturing, resulting in disruption of global supply chains. This essentially meant that the country was to quickly think of ways to become self-reliant in the time of crisis.

We followed a very focused hands-on approach, identifying and sourcing each and every raw material for this purpose. We worked 24x7 with the industry and state governments to meet the objective of making and procuring PPE Kits, N-95 masks, ventilators, diagnostic kits etc. Once these issues were sorted, indigenous production started and orders were placed on domestic manufacturers for procurement. India is now in a position where we are not only meeting our domestic demand but are also capable of meeting the demand of other countries.

India lived up to its name of being the Pharmacy of the World in the last few months, supplying drugs and medical equipment to around 150 countries. The Indian pharma sector has a size of about $38 billion. To strengthen this advantage, government has approved an outlay of 1,40,00 crore for production of medical devices and active pharmaceutical ingredients. Bulk drug parks and medical devices parks are being created for attaining global leadership position.

23. A vaccine is likely to become available next year. Is there some thinking on distribution and priorities in terms of who will be vaccinated?

First and foremost, I would like to assure the nation that, as and when a vaccine becomes available, everyone will be vaccinated. None will be left behind. Of course, initially we may focus on protecting the most vulnerable and the frontline workers. A National Expert Group on Vaccine Administration for Covid-19 Vaccine has been constituted to chart the way forward.

We should also realise that vaccine development is still work in progress. Trials are on. Experts can’t say what the vaccine will be, its dosage per person, periodicity or how it’s to be administered etc. All this, when finalised by experts, will also guide our approach on taking the vaccine to citizens.

On logistics, more than 28,000 cold chain points will store and distribute Covid-19 vaccines to ensure they reach the last point. Dedicated teams at state, district and local levels will see to it that the vaccine distribution and administration is done in a systematic and accountable manner. A digital platform to enroll, track and reach the beneficiaries is also being prepared.

24. Given the setback on account of Covid-19, where do we stand on the target of becoming a $5 trillion economy by 2024?

Most people who are pessimistic remain in doubt. If you sit among them, you will hear only things of despair and despondency.

However, if you discuss with optimistic people, you will hear ideas and suggestions on how to improve. Today, our country is optimistic of the future, it is optimistic of reaching the $5 trillion target. And this optimism gives us confidence. Today, if our Corona Warriors are working 18-20 hours to serve patients, it also inspires us to put in more hard-work.

So what if we could not move at the desired pace this year due to the pandemic! We will try and run faster in the next year to make up for the loss. Nothing great ever gets done if we get deterred by obstacles in our path. By not aspiring, we guarantee failure. India is the third largest economy in terms of purchasing power parity. We want India to become the third largest in terms of current US dollar prices as well. The $5 trillion target will help us achieve that.

Also, our government has a track record of meeting our targets. We met the rural sanitation target before the deadline, we met the village electrification target before the deadline, we met the 8 crore Ujjwala connections target too well before the deadline. So, going by our track record and continuing reforms, people also have confidence in our abilities to reach the target.

We have given a fair chance to those who have invested in India, shown their trust to expand their capacities and become globally competitive. The Aatmanirbhar Bharat initiative is about unlocking India’s latent potential, so that our firms can serve not just domestic markets, but also global ones.

Source : The Economic Times