Let down by the domestic industry despite hefty tax cuts and the lacklustre performance of his government, PM Modi has adopted a new campaign style: “This is Modi ki guarantee.”
“When Modi gives a guarantee, he fully implements it,” the PM said at a Kshatriya function in Haryana. He seems to be keenly aware of the large number of broken promises. And of late, he gives too many ‘guarantees’ to all and sundry.
“India will be among the world’s top three economies in the coming years… This is Modi’s guarantee”, he again thundered from the ramparts of the Red Fort. “When I say this, it is with full responsibility.”
In a virtual address highlighting the role of the tourism sector, Modi repeated the ‘guarantee’ theme: “When I give this guarantee I do it with full responsibility,” the PM said with determination. Tourism, he said, would create 13-14 crore new jobs for the youth.
Referring to the Rs 6.5 lakh crore annual subsidy on fertilisers, a routine budgetary allocation from the pre-reform days, the PM claimed it was “yeh Modi ki guarantee” ― “This is Modi’s guarantee. I am only talking about what I have done, and not promises.”
“When you associate with India’s growth journey, India gives you the guarantee of growth,” Modi said at a business function. Here, he identified himself with the nation.
Now, the PM warns against false guarantees from the Opposition. Addressing a function at Lalpur in Madhya Pradesh, Modi cited many such Opposition promises, like the implementation of the old pension scheme.
At a Bhopal rally this week (on September 25), Modi said that the Women’s Reservation Bill was passed because “Modi means the guarantee of fulfilling his guarantees.” Referring to himself multiple times, he said: “Modi’s mehnat and mission are different from others.”
But the hard fact is that unlike its predecessor, this government does not have a comprehensive economic vision or policy. The PM is always busy with political management, which is his forte. He makes big economic pronouncements, but as part of emerging political needs.
His government takes decisions under pressure from foreign governments and business friends. Now, we are told in graphic detail how his friend Gautam Adani managed to force the controversial farm laws through the NITI Ayog. An NRI businessman suddenly appeared with the bright idea and all wings of the government joined ranks in support of the new farm reform.
In October, the PM said, “First be vocal for local and then foreign”. “This Diwali, you should buy local products,” he said. The Make in Indiaprogramme was launched in September 2014 with great fanfare. “I want to tell the people of the whole world to come and invest in India,” Modi thundered.
Then came his Atmamirbhar Abhiyan in 2020. Sadly for Modi, industries did not spring up everywhere despite lucrative economic packages made available to corporations like the Production-Linked Incentive (PLI) scheme.
This was followed by Modi’s famous slogan, ‘Vocal for local’. Another dream he sold was to make India the world’s ‘factory’. The bravado did not move domestic investors, who do their own calculations.
By that time, crony capitalism was in full play. Corporate tax cuts alone cost the exchequer Rs 1.84 lakh crore during the past two years. The figure for 2021-22 is expected to be over Rs 1 lakh cr. Despite the largesse, the famous ‘animal spirits’ remained subdued. The story of the great corporate betrayal did not end, but the tax cut spree continued.
Thus, the effective income tax on Modi’s corporate friends was slashed to 25.17% from the highest rate of 34.94%. The minimum alternate tax was lowered from 18.5% to 15%. The tax rate for larger companies was moving even lower and stood at 20.77% by the end of last year. ‘Animal spirits’ remained elusive.
“I believe the government has no business doing business. The focus now will be on minimum government and maximum governance,” said Narendra Modi on May 14, 2014. Explaining his concept of minimum government, Modi boasted: “In just an hour, I have cleared projects worth Rs 12 lakh crore which were dragging on for 30-40 years …What took six months earlier, now takes 15 days.” Those were the days when every pronouncement of the PM enthralled the middle classes and the aspiring youth. Business and trade found a new reform hero who, unlike his predecessor, could act on his own.
With hardly six months left before the general elections, Modi is now called upon to account for his innumerable unkept promises. The middle class and the youth who dreamt of flourishing industries everywhere and 2 crore new jobs every year remain frustrated. Domestic business and trade, which wrested innumerable concessions and packages over nine years, are still not investing.
Despite Modi’s promise of minimum government, his interventions have surpassed the record of all other post-reform PMs. As a major liberalisation measure, on April 1, 2000, the Vajpayee government had at one stroke removed quantitative restrictions on 714 items. In contrast, Narendra Modi has revived the licensing system which was abolished by Manmohan Singh 30 years ago. This has evoked sharp criticism even from pro-government economists like Arvind Panagaria.
The government has repeatedly acted in panic over the past year:
- Aug 25, 2023: 20% duty imposed on parboiled rice. More curbs on basmati rice.
- Aug 19: 40% duty imposed on onion exports.
- July 20: Exports ban extended on non-parboiled, non-basmati rice.
- June 12: Stock holding limits imposed on wheat.
- June 2: Stocks limits for arhar and urad dal.
- Sept 8 2022: Exports of broken rice banned and 20% duty on white variety.
- June 1: Sugar exports banned.
- May 24: Further restrictions on sugar exports.
- May 13: Wheat exports banned.
- Aug 4: India bans import of laptops, tablets and personal computers.
- Sept 5: On the eve of US President Joe Biden’s visit, India reduced tariffs on imports of turkey, duck, cranberries and blueberries.
- Sept 8: Tariff reductions on US apples, chickpeas, lentils, almonds and walnuts.
Modi is best at announcing — and forgetting — populist welfare schemes. The first generation was announced in 2014-15. Schemes with the ‘PM’ prefix — like PM Pranam, PM Usha, PM Awas Yojana — alone account for two dozen. Initially, special teams in the PMO monitored each scheme.
Now, most are left to languish. Those like Namami Gange — highly emotional for the RSS — remain works in progress after nine years. The Allahabad High Court described the scheme as a “money distribution machine”. The graveyard of Narendra Modi’s failed promises begins with the assurance to bring back money stashed away overseas “during Congress rule”. “I will remit Rs 15 lakh in the account of every Indian,” he assured during the 2014 election campaign. What we got instead was the stonewalling of official data since 2014.
The finance ministry told the Lok Sabha that the Centre did not have an estimate of black money stashed away abroad. Instead of bringing back black money, 33 big bank fraudsters, including the PM’s own Mehulbhai, were allowed to escape with their booty.
Among the fugitives were powerful entrepreneurs who have a cosy relationship with the ruling party ― Nirav Modi, Mehul Choksi, Vijay Mallya and Lalit Modi. In eight years, none have been brought back and public sector banks have lost thousands of crores of the taxpayer’s money.
P. Raman is a veteran journalist. He is the author of Tryst with Strong Leader Populism.
