Prime Minister Narendra Modi tells ET that the goal of reforms is a ‘transformed India’. In a written response to ET’s questions, he says ‘reforms go much further than FDI’ and that many ‘economic reforms are also governance reforms’. The prime minister agrees that ‘corruption in higher places has been curbed’ and his government is ‘working hard to reduce corruption at all levels, not just at the top’. Excerpts:
How satisfied are you with the pace of economic, administrative and governance reforms in the past two years? And what do you rate as your biggest success and the one area you feel where your government could have performed better?
There have been major achievements in each of the areas you have outlined, namely, economic, administrative and governance reforms. Key economic reforms include liberalisation of FDI (foreign direct investment), including in sectors like insurance, railways, defence and civil aviation. In respect of civil aviation, India now allows a level of foreign direct investment which is not allowed in the US, Europe or China. Our sweeping FDI reforms over the last two years are directly responsible for India becoming a leading destination for equity FDI in 2015.
Also Read: Success for me means people must experience change, says PM Narendra Modi
But our reforms go much further than FDI. Indeed many of our economic reforms are also governance reforms. The new Real Estate Regulation Act will help home owners and buyers throughout the country by ensuring that they get a fair deal from real estate developers. It will prevent delays in completion
of projects, ensure proper utilisation of money invested by home buyers and introduce a regulator which will protect the consumers. This is a long overdue reform.
Similarly, the Bankruptcy Code, which we have passed, will greatly increase the speed and efficiency of recovery of loans. This will stimulate a vibrant credit market in the country and enable much higher level of financing for economic activities, thereby creating employment. The Act for introducing Aadhaar will help us to ensure that subsidies and government benefits reach those who are deserving without allowing misuse and corruption. Another important reform is the linkage we have created between employment and tax deductions, a concept which I emphasised in my Independence Day speech.
In the past our tax laws have provided incentives for investment. We have now introduced a strong linkage between incentives and employment. We have gradually increased the reach of e-governance in areas ranging from environment clearances to income tax administration. Our governance reforms have focussed on opportunities for youth and empowerment of women. We have solved the pending issue of One Rank One Pension which other governments were unable to decide on for decades.
My aim is reform to transform. If you look at the combined effect of the various reforms we have started, the goal is a transformed India. To achieve this transformation, we intend to ensure speed and focus.
We will show the same speed and focus in constructing toilets as in constructing airports, in promoting the welfare of fishermen as in promoting our maritime economy, in the Beti Bachao Beti Padhao Aandolan as in bringing women in combat roles in the air force, in developing skills through ITIs as in fostering innovation in IITs. This government has its feet firmly planted on the ground but its eyes are focussed on attaining global standards. We are Indian in our approach but international in our outlook.
Curbing corruption in higher places has come to define two years of your government. The challenge is now to plug small ticket systematic corruption that hits common man. How is your battle on this shaping up?
I am happy that Economic Times has acknowledged the fact that corruption in higher places has been curbed. I ask you to look back two or three years. Could you have imagined that such a reduction in corruption was possible? There was a general feeling of inevitability and resignation, that such ills could not be removed in our country. If this change, which was not imaginable a few years back, has happened, then many other changes can also happen. We are working hard to reduce corruption at all levels, not just at the top. The use of Direct Benefit Transfer has already saved `35,000 crore of public money which would otherwise go into undeserving pockets.
In ministry after ministry, we are clarifying policies by making them clear and transparent, leaving minimum grey areas and avoiding scope for discriminatory treatment. We are using technology in the fight against corruption. By introducing universal neem coating of urea, we have reduced the diversion of subsidised urea to the chemical industry. This has helped the farmers who are no longer facing fertiliser shortages.
Through technology, we have speeded up payment of income tax refunds, a fact which I am sure your readers would have noticed. There was a time when getting a gas connection was a source of corruption. MPs used to have a quota which used to be much sought after. Today, we have reversed the situation. Instead of applicants having to wait and struggle to get gas connection, we are going and giving the gas connection to the rural poor under the Ujjwala Scheme.Each and every one of these is a measure to cut corruption at the level of the common man.
What are the five things you would want to be able to claim by the time your term ends in 2019? In other words, your five big targets for next three years?
Frankly, if in 2019 when my first term ends, I am only able to “claim” certain achievements, I would not consider that as a success. For me success would mean that without my claiming things, people should experience the change. That would be the correct yardstick.
My aim is to ensure that no village in India is without electricity, the electricity sector is financially viable, the nation has adequate power for industrialisation, and India leads the world in renewable energy. Railwas, shipping and inland waterways, will increase their share of cargo transportation, reducing energy consumption, reducing cost for Indian manufacturers and speeding up the time taken for cargo to reach markets.
We will provide a stable and predictable regime with moderate tax rates, with courteous treatment of honest taxpayers. This will be combined with an expansion of the tax base, reduction in exemptions and stern measures against black money and tax evasion. Seven new IITs, eight new IIMs, seven new IIITs, one IISER, one NIT and three central universities will be set up. The startup ecosystem will flourish, producing new jobs and new ideas. The skill development mission will provide employers with skilled workers, while our measures to promote employment will provide workers with productive jobs.
In agriculture, all 14 crore farmers would have received soil health cards, wholesale mandies will be integrated into a unified market (e-NAM) and the Pradhan Mantri Fasal Bima Yojana will be fully implemented. All unconnected rural habitations will be connected through the Pradhan Mantri Gram Sadak Yojana. Five crore rural women will receive gas connection removing them from the health hazards of inhaling smoke.
The situation in the Upper House, according to BJP, has impeded the pace of government legislative work and reforms. Is there, thus, any parliamentary reform India should undertake to ensure governance pace is not constantly obstructed?
Before I answer this question myself, let me repeat what respected President Pranab Mukherjee has said: “Our Parliament reflects the supreme will of the people. Democratic temper calls for debate and discussion, and not disruption or obstruction. Aa No Bhadra Kratvo Yantu Viswataha — let noble thoughts come from all directions, should be the spirit behind debate in this temple of democracy.”
It is true that whether it is our electoral process, or our parliamentary functioning, these have been reformed earlier too, and should be reformed in future as well. One significant issue these days is the influence of money power in elections. The government’s work comes to a standstill during elections. That is why many people are calling for holding the Lok Sabha and Vidhan Sabha elections simultaneously. If this happens, the character of the Rajya Sabha will also be “in tune”.
What is the prime minister’s, the politician’s, assessment regarding the Congress stance on the issue of the goods and services tax? Do you have any deadlines for GST?
In our history, I do not think there has been any law which has been debated as extensively and as long and at as many levels as the GST Bill. The states and especially the consuming states now understand the benefits of GST. Most of the states have clearly understood that GST will benefit the poor through buoyancy of revenue, enabling better services to them. The poorest states will benefit even more.
The people in these states have also now understood this. So much so, the obstruction of GST is now not a Lok Sabha issue but has become a Gram Sabha issue! The public in states like UP, Bihar and West Bengal will be the biggest beneficiaries. Therefore, I do not think any political party will try to commit suicide by opposing GST. You have asked about the deadline for GST. As an optimist, I believe more in lifelines than in deadlines.
You have been responsible for ushering cooperative federalism. How do you see this concept play out in the days ahead? Essentially, in your vision, how much more would you want to empower states and the kind of decisions they should take in future?
If anyone thinks that this vast and diverse country can stand on one pillar, however strong, they would be mistaken. In a nation like India, the states, Union Territories and the Centre have to act as 37 pillars.
Merely because the constitution prescribes a federal structure, true federalism will not automatically happen. The prime minister and the chief ministers have to join together, and the central cabinet and the state cabinets have to join together, as one big team, as one Team India to take India forward. This spirit has to be fostered.
Cooperative federalism is not just Centre-state cooperation but also state-state cooperation. Today, interstate water disputes are a matter of serious concern. Gas is available in one state while fertiliser plants needing gas remain closed in another state, because some state does not allow pipelines to pass through. This is not fair to the people of India. Hence, cooperative federalism is needed at all levels and must be combined with competitive federalism in the form of strengthening competition to progress faster. It is my good fortune that having been a chief minister for many years, I am acutely aware of the importance of cooperative federalism and the loss that will accrue if it is absent. It is because of this that I have put it into practice.
I can give several examples but I (shall) mention just one or two here. You are aware that following the 14th Finance Commission’s recommendations,states get a much higher share of central revenues and the Centre was left with much lower revenue.
The centrally sponsored schemes had to be restructured. In the past, centrally sponsored schemes were designed and the funding pattern decided by the Centre on its own. Instead, this time, the job was entrusted to chief ministers under the NITI Aayog. The chief ministers recommended what should be the new pattern and the Centre accepted that. It is a matter of pride for our country that this report of the chief ministers was unanimous despite the presence of chief ministers from various parties, including several from outside the NDA. Another aspect of our approach is the freedom we have given to states to modify their policies in matters under the concurrent list.