Modi Socio-nomics Starts To Pay Off

Context: The transformational nature of India’s policies is becoming hard to ignore.

India’s successful Socio-nomic transformation

• India’s fiscal restraint amidst pandemic: Countries which went over the top in providing massive fiscal and monetary stimuli after Covid laid their economies low did not get bang for the buck.
  • In fact, they may be heading for a debt trap.
• Reformative economic reforms: The difference between economic reforms of 1991 and 2014-21 period is that the former was driven by bankruptcy, the latter by pure reformative intent.
• Phase of Socio-political venture capitalism at work: Investment in many start-ups and schemes knowing full well that 60-70 per cent of his investee companies and schemes will fail, 10-15 per cent will deliver in spades, and the remaining 20-30 per cent will do reasonably well to justify the investment.
  • Swachh Bharat and Ujjwala were huge successes. GST will deliver with some tweaks and in need of “root and branch” reform. For ordinary people Nal-se-Jal will be hugely beneficial.
• 360 degrees approach to any problem: Ujjwala, Saubhagya (providing last-mile power connections to the home), Swachh Bharat, Ayushman Bharat and Nal Se Jal are separate initiatives.
  • Taken together, they empower the homemaker and improve health outcomes.
• Formalisation of economy: GST push for tax compliance, demonetisation, and the extension of social security benefits to many more workers Indian business has taken a big leap towards formalisation.
  • Jan Dhan, DBT and unified payments interface, more Indians are now part of formal financial sector.
  • e-Shram portal for migrant labour, gig economy workers are being visibly formalised.
• Supply-side reforms: Building an internal supply chain for inputs and products at a time when global supply chains have broken down.
  • Atmanirbhar Bharat and production-linked incentives are not about import substitution. Globalisation cannot work unless there is strong localisation.
• Successful Vaccination drives: Initiative involved many actors working together all the time. Government labs and private companies worked in partnership to create two high-volume India-made vaccines at low unit costs.