Some patience, please, for achhe din

The Reserve Bank of India’s decision to exercise its own judgment and keep interest rate unchanged must have disheartened those who were expecting a rate cut. For many of us in industry, the rate cut was deemed essential to usher in achhe din . It was as if achhe din was locked inside a room, and the key to open the lock was a rate cut.

Meanwhile, independent observers have been engaged in analysing the performance of the Narendra Modi government. A highly respected commentator had this to say: “ Achhe din nahi, lekin sitare achhe hain ” (Good days are not yet here but the stars are good).

Finance Minister Arun Jaitley was frank enough to say that the entire government was working in a hurry as people were getting restless for results.

This is the crux of the issue.

Expectations are rapidly rising; people are eagerly waiting for results. And, results must be shown at the earliest if the government is to meet the expectations of the people, particularly as a series of State-level elections is due in the next 12 to 18 months. This is a challenge before the new government, that is, to deliver at the earliest. Thankfully, the government is fully aware of this.

However, there is a lacuna in our thinking. The phrase, achhe din , comes straight from the election campaign. What exactly is meant by it has not yet been explained. What is worse, no one has bothered to understand or explain their expectations of achhe din .

One can even say it was taken in a rather narrow sense, as in the last few years growth kept falling and hardships were rising. Probably, everyone wanted to see growth coming back to the previous peak of 9.4 per cent or at least to an average 8 per cent annual growth, as against 6.7 per cent as has been the case over the previous five years.

Per capita income must rise, inflation must be brought under control to increase real purchasing power, increased job creation must happen, the twin deficits (fiscal and current account) should be brought down for sustainable high growth, and so on, was the general understanding of achhe din .

For the poor sections of the society, it meant there must be electricity, water supply, food security, roof over the head, and so on among other things.

The campaign did not specify the time frame required for achhe din for all. The how and what of it also remained unexplained. In the absence of adequate communication the concept, unfortunately, was misunderstood and expectations were allowed to fly high.

At the same time, it was least understood that in order to usher in achhe din a whole lot of steps were required; there was also a need for patience and to realise that nothing can happen overnight.

There is, therefore, need to temper expectations and go about our duties and functions in a normal way. The point that needs to be asked at this time is whether the government is moving towards its stated purpose? Is the government sincere in its objective and what has it done so far? I am not getting into the chronology of actions taken so far but would only like to provide a perspective.

First, as is well known, the present government has inherited a huge set of problems and systemic deficiencies. The problems were divergent and difficult to address. Given this, the Modi government had to decide on the road map for growth and stability. It had to also prioritise the things to be done. The Prime Minister has been going about his task meticulously and reaching the people by way of communication and enhancing accessibility, bringing about more transparency in working of the government.

Second, his approach to development is bottom up, which is aimed at solidifying the base, besides expanding it. For instance, the Jan Dhan Yojana is a solid move to rationalise subsidies and provide financial inclusion, besides ensuring greater penetration of banking activities. He has not gone about demolishing existing structures but trying to make the same more productive; take, for example, the restructuring of MNREGA.

This saves costs while making the establishment more result-oriented. Going ahead, this will make a significant dent in the many ills of the Indian economy, including subsidies. This will not only strengthen the base and the foundation, but is expected to prepare the ground for sustainable growth.

Third, the idea is to involve everyone in the task of building the economy and make India a global leader, in all spheres of economic activity.

Ultimately, the economy will be propelled by people and their ambitions, besides abilities and skills, rather than merely by the government. Modi’s policies so far have been geared towards realising this possibility. Nothing can be better than a scenario in which people decide their future and work for it. As far as industry is concerned, the move to rationalise labour laws, the liberalisation of FDI rules, the attempts to resolve structural constraints relating to land and forests, and so on are indeed moves in the right direction.

To give an analogy, the government is working like a farmer who is trying to cultivate a drought-affected land by tilling it, cultivating it, and sowing the seeds for crops to grow and be ready for harvesting at a later date. As far as the current year is concerned, we should not expect a shooting high growth, but definitely a significant recovery from the low of 4.7 per cent last year.

To conclude, the domestic economy has two influences. First, the domestic economic environment. Second, in a globalised world, it is also influenced by forces in the global economy. We need to bear this in mind before pronouncing whether achhe din have arrived or not. This, in my view, is a very important corporate responsibility.

The writer is the director of JK Organisation and vice-chairman and managing director of JK Paper. The views are personal