When I began this column in March 2009, I remember writing my first piece on the macro mess India was in and how a spendthrift government, which took an 8% growth rate and a 26% rise in tax revenues in the previous years as the new normal, messed up big time. You can read that column here: http://bit.ly/2bynE0d . With elections around the corner, money was splurged on massive loan waivers and many other let’s-give-them-money-and get-their-votes schemes. It worked and the government came back to power. The next five years got the country closer to disaster, with bank books getting stuffed with questionable loans, policy paralysis and big corruption in the central government and bureaucracy.

The economic fallout of bad policy is usually political in a democracy, so India voted in a new government with a clear majority for the first time in 30 years in 2014. It’s been two years and it is unclear if things are better or worse. Is the new government good or bad? Are we doing better or worse? Much of the popular discourse is muddied with commentary on issues that have little to do with the economy: there is a lot of angst over issues of tolerance, communal tensions, rewriting history. I’ve been asking this question of all the people I meet—corporate leaders, bureaucrats, academics, regulators, heads of institutions: what’s going on, are things better or worse?

All of them say three things. One, corruption in the central government is gone. There is a tough message out from the Prime Minister’s Office that graft will not be tolerated. Everybody I spoke to said that indeed the extortions from every project were gone. Graft in the lower bureaucracy and in local governments persists and is very deep-rooted. But at the Centre, it is gone. There is an overall drive against black money with various schemes being tried to put a plug on it. The same hard stand has been taken with bank loans and one place to start has been the process of selection of public sector bank chiefs. A member of the committee who would interview candidates for public sector bank chairmen told me that after 2014, they stopped getting calls from the power centre on who to hire. The rate used to be fixed, he said, we were just told to pick the name told to us. Who’d pay? Firms that would then benefit from easy loans and terms. Those calls have stopped.

The hardening stance of the state on black money shows up in the prices of real estate. Real estate has been the sump of black money in India and the politician-builder-land mafia nexus had raised prices to a level that was beyond any economic logic. People who bought their 8 crore luxury floors in Gurgaon are unable to find a buyer at half the price. The winter for real estate is going to last a long time—so if you are still holding on to an investment thinking it will recover, plan on bequests rather than profits in the near future.

Two, policy paralysis is over and the government is executing plans, many of these are carry-overs from the previous government and some that were announced but were not executed. Aadhaar is a great example of the Modi government carrying forward a project that is so key to India’s progress. The Jan Dhan scheme has added millions of unbanked to the banking sector’s customer base.

Three, key individual ministries are doing well—power, roads, defence, railways, telecom—and are showing results. These are core industries and will bear fruit over the long-term. Those looking for a quick return to the 2008 growth rates will be disappointed. One criticism that my small dip-stick revealed is over the hurry that the government is in to do things; another complaint is that some of the announced schemes don’t have deep-enough roots.

So why the noise? Why this huge angst with the Narendra Modi led government on one side and the extreme right-wing backlash on the other? The 2014 election threw up a result, which has left a section of the urban elite that was part of the access-based ecosystem that ran the country, out of the power loop.

Modi, as a Delhi outsider, has shut down access to power and its benefits. Notice the way illegally occupied bungalows in central Delhi have been vacated—the numbers have jumped from the previous years. Read this excellent piece by author Sanjeev Sanyal on taming the Delhi elite earlier this year: http://bit.ly/2bOcdXV . There is a vocal section unwilling to accept that the election verdict was something that they were against.

I remember a spate of opinion pieces just after the results bemoaning the poor choice that Indian voters made. I remember tweeting that it seems 20 op-ed writers are telling a billion Indians how to vote.

What we need to remember is that there are spin doctors and rabble rousers on both ends of the spectrum. The ‘bhakts’ as they are called will see no wrong and will abuse anybody who dares to ask questions. Equally rabid are the entitled left-loonies who will attack Modi personally for everything that’s wrong in the country. It is very difficult to stay centered when the polarisation is so severe. I find it useful to stay with what I can understand and not get blown away by agendas and rhetoric on both the extreme sides. I think the economy looks better and there is a genuine attempt to put in place rule-based norms, away from discretion-based norms that would result in rent seeking. The next two years will show if the reform is bearing fruit or not. It would be fair to give the government at least four-and-a-half years before we decide whether the change at the Centre has worked or not.

Monika Halan works in the area of consumer protection in finance. She is consulting editor Mint, consultant NIPFP, member of the Financial Redress Agency Task Force and on the board of FPSB India. She can be reached at monika.h@livemint.com

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