That missing vigour

May 25, 2015 12:00 am | Updated 02:09 am IST

Going by macro-numbers, the Narendra Modi government has a lot to cheer as it enters its second year. Falling deficit both on the current account and fiscal fronts, and rising foreign exchange reserves should be cause for relief, even rejoicing. Both core and retail inflation rates have eased, prompting the Reserve Bank of India to cut repo rates twice this year. Reading these trends in tandem with the rise in indirect tax collections and a marginal drop in the levels of non-performing assets, a confident Finance Minister, Arun Jaitley, suggested last week that better days are really round the corner. There have also been significant reform initiatives in the area of foreign direct investment covering sectors such as insurance, defence, railways and construction. Labour law reforms and relaxation of rules for investment by new categories of Indians living abroad have all been quietly pushed through amid the daily din in Parliament. The successful auctioning of coal mine leases and spectrum, thereby setting the stage for a transparent policy regime, is noteworthy. However, the government’s inability to push two crucial pieces of legislation — the land bill and the GST bill — has reflected poorly on its legislative management skills. This has also revealed an unhealthy, ‘my-way-only’ attitude in a democratic set-up.

Despite all the positives, there is this sense of restlessness perceptible on the ground. While largely conceding this, Mr. Jaitley has sought to explain it away, attributing any such impatience to the fact that “the country wants to grow even faster”. But is there anything wrong in people pitching their aspirations high? Expectations rose several notches especially after Mr. Modi pegged a high-voltage poll campaign on an allegedly ‘non-performing’ United Progressive Alliance government led by Dr. Manmohan Singh. While claiming that the “expectations from the Modi government were realistic”, Mr. Jaitley has put the blame on a recalcitrant Opposition, which, according to him, has put many a roadblock before the government’s efforts to fulfil its mandate. In fact, he has given his own government a pat on the back for being decisive in the face of obstructionism. But the moot point is this: Why is it that great expectations have so quickly given way to a feeling of impatience, all within the span of a year? The positive sentiment is slowly evaporating. Pick-up in domestic demand and a recovery in the investment cycle are not happening. The ‘X-Factor’ is just not there, as one industrialist put it. An answer to this situation could lie in an initiative that would see the government taking the lead-spender role, kick-starting an economy in slumber. A little bit of socialistic spending is a necessity given the size and structure of the Indian economy.

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