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Tall claims and jibes: Modi’s three-nation tour showed weakness, not strength

April18/ 2015

It is most unfortunate that Prime Minister Narendra Modi has chosen to break convention by severely criticizing previous governments on foreign soil. In global diplomacy this is not done. You will never hear US President Obama attacking his predecessor, George W Bush’s policies outside America.

Modi described India under the earlier regimes as “scam India” before a big audience in Canada. The PM boasted that his regime was “removing the dirt accumulated by previous regimes”. Presumably, this also includes the “dirt” accumulated by the NDA government as well as many BJP governments ruling various states for the past 15 years.

In Germany Modi addressed the NRIs and spoke about how the previous regime had “ freely distributed coal mines like handkerchiefs”. Of course, Modi was totally unmindful of the fact that the BJP governments in Madhya Pradesh and Chattisgarh had also independently given away coal mines worth over Rs 1 lakh crores to the private sector companies which were also declared illegal and cancelled by the Supreme Court. The former CAG, Vinod Rai, said he did not have enough time or resources to assess the losses that had occurred in the case of coal mines given away by state governments directly through their public sector mining companies. Of course, Modi has no patience for these details when he sweepingly accuses previous regimes of creating “gandagi”.

In fact the Prime Minister got so carried away by his own rhetoric that he claimed his government had done in 11 months what the previous regimes could not do in decades. The PM must avoid such hyperbole on foreign soil. Such exaggerated claims get badly exposed in a complex political economy like ours.

One big claim of Modi’s got badly dented in France where he surprised everyone by striking a deal to buy 36 Rafale aircraft as part of a government-to-government deal. This was most unexpected because an ongoing package deal was already in the works to first buy 18 Rafale jets and additionally make 108 aircrafts in the government owned Hindustan Aeronautics Ltd(HAL) facility as part of Modi’s “Make in India” strategy.

The “Make in India” strategy involved technology transfer and absorption over the years, which would enable HAL to become self reliant eventually. India has emerged as the biggest importer of defence equipment in the world. Therefore the idea is to leverage India’s position as the biggest buyer to help transfer technology, develop indigenous capability and generate employment.

However, with the surprise deal of directly buying 36 Rafale aircraft, and a subsequent statement by the Defence Minister that the indigenous joint production with HAL may get cancelled, the government has ironically converted ‘Make in India’ into ‘Make in France’. It is well known that the French company making Rafale was on the verge of closing down for want of a new market for their products and the Indian order has actually revived the company. This means more production and employment in France rather than in India, as originally planned.

The larger point is Modi has been making too many claims, like he did in Germany and Canada, of bringing immediate transformation which appear to remain in the realm of wishful thinking. The reality on the ground is not very different from what it was 11 months ago when he took charge as Prime Minister.

By all accounts, the bureaucracy at the Centre and States have mostly not adjusted to his style of functioning. Though the bureaucracy does not speak openly but it privately admits that many of Modi’s grandiose ideas cannot be implemented on the ground. Many senior bureaucrats are still not conceptually very clear about what exactly ‘Make in India’ means, if one goes beyond the slogan. There is very little attention to details.

Another example of Modi’s hyper imagination relates to the Jan Dhan Yojna which, in his foreign tour, he described as the greatest scheme devised in independent India for the poor of the country. The fact is banks have been pushed by the government to create 14.7 crore accounts as of 31 March 2015. The real story is out of these 14.7 crore accounts 8.5 crore accounts still have zero balance. This writer has spoken to public sector banks and insurance companies and they all say it is not practical to maintain zero balance accounts as it costs Rs 125 per account to the bank to just maintain an unused account. It costs an extra Rs 100 per bank account to give a Rupay debit card as promised by the government.

Modi claims this is the first time banks accounts have been opened for the poor on such a massive scale. If NDA has created 14.7 crore accounts, former finance minister P Chidambaram recently wrote a newspaper article claiming the UPA had already opened 24 crore new bank accounts over 5 to 7 years under a special campaign to open bank accounts for the poor. Most banks admit that it is a top down exercise, amounting to “target chasing” rather than bringing any real change.

Indeed, if these bank accounts really exist in the rural areas, why is the Modi government not transferring cash as one time relief to millions of farmers suffering from crop failure across north India. This is a time when the farmers can do with an overdraft or insurance policy via these accounts as promised by the NDA.

In a survey conducted by IIM Bangalore students working under Professor Charan Singh, a former banking research Director at RBI, shows that the public sector banks and insurance companies are not confident they can reach out to the very remote villages under the Jan Dhan Yojna. Charan Singh said the task was indeed very complex and had not been thought through adequately by successive governments.

It is time Modi lowered the scale of his rhetoric abroad, as well as in India, and got down to some much needed incremental work on the ground. For starters, he needs to visit rural India to understand the nature of widespread distress in the farm economy. Shouldn’t the agriculture economy be first fully secured as a prelude to ‘Make in India’!


The author is the Executive Editor at Amar Ujala Publications

Tags: #ModiInCanada, #ModiInFrance, , #ThreeNationTour, #TopStory,
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