



Narendra Modi has a massive army of online supporters who defend almost every action of this government relentlessly on Social Media against unbelievable levels of spin and distortion. A confession is in order here: This writer is one of those, who are deeply appreciative of several of the initiatives of this government.

Whether it is Jan Dhan Yojana, Mudra Bank, Life / health insurance for the common man, crop insurance for the farmers, global scale initiatives in Solar and LED or strong focus on the infrastructure sector (roads, power, smart cities), the government has made huge strides. The impact of these initiatives will be felt for several decades to come.

At the same time, six disappointments listed below haunt almost every reasonable well-wisher of Modi, and the reverberations of these are felt on the social media like a constant background noise that distracts you in a thriller movie. So it is better to get these out in the open and hope these are addressed swiftly rather than letting it bottle up!

1. Disinvestment: Modi has said many times during his campaign speech and even recently [watch 2.09 to 2.19 in recent Start-Up India speech] that the “Govt has no business to be in business”. But these words are not matched by the action on the ground. For two years in a row, the government will miss its disinvestment target by a wide margin.

More than its impact on the fiscal deficit etc., the ideological signal this move gives to the economy is tremendous (positive if done, and negative if ignored). As the saying goes, “jahan raja vyapari, wahan praja bhikari”- the worst misuse of public sector companies like Air India (which has given away plum landing slots to the private competitors) and BSNL / MTNL (which are prohibited from roaming arrangement with the private players thereby denying opportunity to capitalize on their strong rural presence) makes a strong case for divesting these companies and arresting the precious leakage of funds from the exchequer!

Modi may believe that he can turnaround the public sector using the same bureaucrats (like Coal India) but it misses the point of these being vulnerable to misuse by a future government. So, but for strategic sectors (like defence and banking), government should swiftly get out of other PSUs and focus on more pressing matters on hand.



2. Petroleum pricing: This is a strong disappointment which is having far reaching adverse impact on the image of this government as it relates to every common man on the street, unlike disinvestment discussed earlier. The constant increase in excise duty by the government, to prevent pass-through of drop in crude prices to the end consumer has resulted in a ridiculous situation where Aviation Turbine Fuel for aeroplanes cost Rs 37 per litre, while petrol costs Rs 60 per litre!

Did you know that the actual cost of producing petrol at today’s crude cost will be less than Rs 20 per litre, and the rest Rs 40 goes towards various central and state taxes? The ostensible reason for the excise hike is to minimize the fiscal deficit and also to prevent wide fluctuation in street prices, when the crude prices go up.

Neither of these reasons is strong enough to earn the wrath of the common man. First, the government should have a robust plan for fiscal deficit reduction and cannot place faith on god-sent gift of lower oil prices as a substitute. Second, given the global economic scenario, oil prices are not going up anytime soon and even when they do, the public is mature enough to relate the same (like they are relating to the mismatch now).

The government should urgently reduce Rs 10 per litre of petrol and Rs 6 litre of diesel and leave more money in the hands of the common man. The immediate effect of these on inflation and consumer confidence will kick-start the virtuous cycle of private demand growth and private CAPEX investment, the sore point of the economy today.

3. Inaction on Corrupt politicians: Modi came to power largely on the back of humungous scale of corruption – 2G, Coalgate, CWG scam etc. The public disgust with such blatant corruption converted many fence sitters to vote for Modi. And now, after two years, not even a clerk has been convicted and gone to jail on these cases! One can understand why Modi government may be reluctant to act on heavyweight politicians like Sonia or Manmohan Singh as there will be war cry of vendetta!

But why even middleweight politicos like a Koda or a Bansal or a Maran or a Raja or a Kanimozhi or Kalmadi are not yet convicted? If a Nirbhaya rape case (one among 25000 rapes that happen every year in India) can be concluded in 10 months, any of these corruption cases can be investigated on a daily basis and a few politicos and bureaucrats thrown in jail in a similar timeframe.

A related disappointment is the lack of action on black money. Either the government is not doing much on this, or not coming out with a clear communication on the key actions initiated and more importantly, the list of people nabbed and the amount recovered.

4. Tax reforms: The overall tax reforms of the Modi government is another disappointing aspect that needs urgent redressal. For instance, despite repeated assurances by Modi that honest taxpayers will not be harassed and ease of doing business will improve, the air on retrospective taxation has still not been cleared fully.

Occasional oral reassurances by the ministers are invariably followed up by ridiculous notices from over-enthusiastic (or downright treasonous) bureaucrats hurting the government’s image badly. To quote Sadanand Dhume: