With an electoral victory more gratifying than in the 2014 Lok Sabha polls, the onus is now on the NDA government 2.0 to put this majority to good use.
Applying learnings from its previous term, the government is duty-bound to establish stability in the economy, critical to which is recovery from the slowdown and employment generation.
Economic priorities
India is no longer the fastest growing economy — a title it has forfeited to China, with GDP numbers of the last quarter falling to 5.8 per cent. Economists have blamed the self-inflicted pain of demonetisation for this fall, which estimatedly caused a 2 per cent point drop in the GDP rate. Recovering from this slowdown must top the priority list as it has implications for consumption patterns and business output.
The second priority to be addressed urgently is unemployment, as the NSSO survey claims the unemployment rate is at a 45-year high of 6.1 per cent. The start of the new regime at the Centre saw the setting-up of two cabinet committees, one to look into issues of improving skill development and employment, and the other to look at ways to boost investment and growth. This proactive step needs to be furthered by definite policies and economic programmes.
Sectors that need urgent attention
As Prime Minister Narendra Modi begins his second innings, the key task for this government should be to fix the ailing sectors of the economy. Financial services, aviation, and agriculture need to be looked at first, with power, healthcare, and real estate close on their heels.
Financial Services: Major reforms and transitions were made during the previous year, the benefits of which are yet to be realised. There are ₹10.3 trillion of NPAs at commercial banks, 86 per cent of which account to public sector banks, implying that the government needs to pump in funds to restart growth here.
Civil Aviation: The shutdown of Kingfisher Airlines, the crisis at Jet Airways, and the ever increasing debt burden of Air India saw this sector in a downward spiral, despite profits being posted by Indigo and Spice Jet. The Government’s scheme of connecting Tier 2 and Tier 3 cities was received well by the industry, with many players introducing new routes; however, more aggressive growth needs to be looked into, by disinvesting at the right time, reviving major players, and reducing operational costs.
Agriculture: 3,00,000 farmer suicides since 1995, increasing unrest among farmers, and uncertainty over loan repayments calls for decisive steps for revival of this sector, which can lead to doubling of farmers’ income as envisaged in March 2016. After all, the farm sector is the backbone of the Indian economy.
The way forward
Impactful work in these three sectors will contribute towards giving the economy the required adrenaline rush which can drive the future course of new government. Reforms like the IT revolution of 1984 will give economic growth a much-needed push.
(The writers are in the 32nd batch of the NMP at MDI Gurgaon.)