Basic reforms are done, hope to see a very different Mr Modi: Vallabh Bhanshali, Enam Group
With this kind of mandate, his political sensitivity should be significantly down, says Bhanshali.
What do you think were the issues with NDA-1 and what do you expect from NDA-2?
There were three issues in the last five years. Firstly, they inherited a system which had lots of holes. a) The whole NPA legacy; b) They had to bring about basic reforms whether it was GST, DBT, opening Jan Dhan accounts and also provide basic facilities for the average Indian like power, toilet. c) Keeping the momentum while introducing reforms because reforms inevitably slow down the economy.
While the policies at the top level were probably first class, the policy management at ground level left something to desire and some of that was also a result of political sensitivity and the fact that Mr Modi was a new prime minister and therefore his ability to mobilise the whole government machinery -- be it in the states, outside institutions, the bureaucracy, did not do as well.
But this time, the basic reforms are done. All these other institutions are going to look up to him very differently that they know there is no alternative to him and the fact that his political sensitivity will be significantly down. Getting re-elected was a very big thing and if I were him, I would have at least a lot of that sensitivity. Since those are behind him, I hope to see a very different Mr Modi and a very different government.
Some of them were probably justifiable or acceptable while some part, when it came to policy execution, has to be a lot better. Probably the government did not get optimum marks on that front.
Which end of the economy do you think will change dramatically and radically? Will it be rural focussed? Will it be focussed towards balancing and kick starting the private sector capex or this time around, will social security schemes take a priority because the view in the market is the whole issue of Swachh Bharat and gas cylinder did the trick for NDA-1.
We have to go behind Ujjwala and power for every home, etc. But we have to create a solid foundation in which the farmer and the rural person sees a greater future through digital India, through a more innovative farm policy. At the same time, the businessmen probably felt that the trust in him had gone down at policy management levels. So, some of this anti-profiteering, ‘go to jail for everything’ fear psychosis has to go out.
We also have to provide a macro environment. For example, our interest rates must come down. With the kind of inflation control that we have had, it is crazy India has one of the highest positive interest rates! How can we expect investment cycles? Kick-starting the capex cycle is impossible. The liquidity has been negative for months together. The growth in money supply has probably been crawling at the rate at which it was in the ‘60s when we were growing at the Planning Commission growth rate of 3%, 4%. A lot of those inconsistencies have to go out.
Lastly, with a political mandate of this kind, are we going to attempt some big things like land reforms, labour reforms or administrative reforms? Can we speed up the judicial process because without which, that kind of social equity and global stature that we hope to achieve will not be possible? Being a political creature that the government is, they will have to prioritise this and still deliver on most of this in the next five years. So the plate is full.