Interpreting Modi: Peep into the NDA Roadmap

It is hardly a guess that the entire nation today is looking forward to the Modi budget due 10th of the next month - a budget that is important for a whole bunch of reasons. Firstly, the government has a tough task at hand with a poor economic situation, including fall in foreign investments, high inflation rates, and an unenviable fiscal situation. Secondly, while the Prime Minister showed outstanding awareness of local conditions in every corner of India during the election campaigns, the same did also trigger an exponential rise in expectations that are diverse and even unreasonable from his Government, given that an inheritance of seven decades of sub-optimal governance will be a plague. Thirdly, in many ways, this is the first budget in free India that will be non-Congress and mostly free of coalition compulsions, both at the same time.

While there are bound to be many constraints and compulsions at work against the government not visible to the naked eye, it may be possible to steal a quick peek into the Government Roadmap as well as the upcoming budget with a focus on the longer term India story as the Prime Minister has portrayed over the last few months.

Countrywide upgradation and application of Technology into all realms of Governance is most likely to find heavy emphasis, even in the current budget. Over the last month, this message has been communicated strongly in a variety of ways by the government. Transportation Minister Gadkari has indicated aggressive plans of Major IT deployment. Telecom Minister Ravi Shankar Prasad has declared ambitious plans of major infrastructure upgrades to MTNL and BSNL, and connecting rural India through a National Optical Fiber Network, to include 2,50,000 Gram Panchayats by 2017 in three phases.

A recurring theme in PM Modi’s speeches has been the country’s necessity to ensure participation, employment and productivity of our youth. His references to the fact that 65 percent of the Indian population is younger than 35 years, strengthens the probability that there will be a strong focus on Skill Development innovatively and aggressively.

Infrastructure will be another major focus. Over the last 30 days, we have already started hearing of 100 Smart Cities, Bullet trains, utilization of inland waterways, $4-5 billion infrastructure fund etc. There are enough hints that there will be creative solutions to chase infrastructure upgrade while generating large scale employment and lifting investor confidence. For example, the target of building 25 kilometers Highway each day could do wonders on both these fronts.

In terms of a more abstracted goal of holistic development for India, the Government is likely to prioritize a tighter integration of the North East with the rest of the country, an area where the Indian state has fared poorly ever since Independence. This is a critical element that needs to be corrected immediately given the foreign winds of disturbance in the region. While shrewd diplomacy is indeed a critical element, at the same time setting our internal affairs correct is even more important. The Telecom Minister has discussed plans of setting up 8000 Towers in the North East at a cost of Rs. 5000 Crores. In addition to the technology infrastructure enhancements, this could also include greater emphasis on Infrastructure and Skill Development.

There is likely to be dedicated focus on Ganga, and tourism centered on it. While the Prime Minister is personally bound by his words on the Ganga initiative, the Government is likely to take the commitment a step further and convert it into an opportunity for Indian Tourism. It has already been indicated that stretches of banks of Ganga will be developed as focused tourist attractions while also actively promoting inland waterways as an important transportation means.

One of the major challenges before the Government will be restoring investor confidence and reviving the flow of foreign investments. There is enough empirical evidence to suggest this will be a personal focus area for the Prime Minister. There could be changes with respect to single window clearance, and abolition of retrospective taxation – while some other changesrelating to GST or land acquisition may follow. For example, the Government is likely to emphasize on Electronic manufacturing as a strategic area, including the setup of the Electronic Development Fund to encourage innovations in Electronic Manufacturing as indicated by the Telecom Minister.

One of the other areas overlapping with Technology and Infrastructure will be Agriculture. A prime theme of the Prime Minister’s speeches has been the need for application of technology to agriculture to enable a second Green Revolution. In terms of infrastructure, there is likely to be a focus on the proactive upgradation of food storage and preservation facilities. Division of the FCI into three independent agencies dealing with Procurement, Preservation and Distribution of Food and minimizing of Agro Product wastage will be an important goal will probably be an important concern.

While the Government and the Prime Minister himself have discussed several diverse and innovative approaches to get India back on track on the economic front, many of these may have been in different stages of theoretical advancement and practicality. So, it would be interesting to see if the Government would actually go as far as to make a fundamental departure from the last several budgets but, certainly on some of the more tactical concerns as the extending excise duty cuts in Auto and other industries, it may be easier for the present Government to take decisions.