BJP’s Slogan for 2019 elections – “Imaandaari Se Koshish Toh Kari”

My views on the current BJP Indian government so far – “Ek Imaandaar Koshish”. The articles tries to consolidate what might be or might not be working for the BJP government so far

Disclaimer: This is not an official slogan from the BJP and are only my personal views based on the observations over the last three years. Besides I belong to no political camp and/ or am not for or against anyone.  

Recently there has been a lot of negativity around the ruling Indian government and how some of its key measures are bad for the economy. All this started mainly with last quarter’s GDP number of 5.7% and everyone quickly put 2 and 2 together and started predicting a doom’s day. The most recent shocking addition to the list are comments from erstwhile BJP’s own Finance Minister, Mr. Yashwant Sinha.

Many pundits are predicting as to how if this continues it can also lead to a surprise outcome in the 2019 general election. This article is not to comment whether it can or cannot happen (many factors besides economic health would play a role there). This is only an effort to summarize what is going for and against the current Indian government.

Let me start by putting across some key questions –

  • Have we moved forward or backward since this government came into power?
  • Do we see any vested maligned interest in any of the measures that are being announced?

I know that good intentions cannot always be the defence but then isn’t it also true that these kinds of measures though in the right direction need some time to play out. Agreed that this could have been executed and communicated in a better way but then all of us are also aware about compulsions of politics.

Demonetisation

I personally believe it was a masterstroke especially given the Indian context. All the intended outcomes may not have been achieved but on ground, one can clearly see the difference. I am not saying we have or will convert to 100% cashless economy (neither am I a believer that one should), but the most significant achievement of demonetisation has been a change in the mind set of a typical small and medium size businessman in India. I am seeing majority of them becoming more mindful that they need to change and they have started changing. This bodes extremely well to India’s future.

It doesn’t mean that everything will change overnight – the change will be gradual and people will come slowly from informal to formal. Government on its part needs to incentivise the change.

“Demonetisation was the stick and it needs to be negated by carrots ! You want to keep the animal spirit alive, don’t you?”

GST

Government is getting a lot of negative feedback on GST especially related to the poor implementation. It’s true that there are in fact a lot of issues ranging from IT infrastructure, confusing classifications, poor understanding, painful processes, credits getting stuck etc. However, think about it – the scale of tax reform that it is, was it possible to have a smoother implementation? One could have kept on sitting on it for another 10 years and still not do anything fearing the backlash.

“For me the key here is that the government is listening and is keenly correcting the course”

I think the only issue is that both demonetisation and GST have been introduced too close to each other leaving little time for businesses to adjust. This definitely has shaken their confidence.

Aadhar linkage

I truly feel it’s a non-issue. As a citizen of any country one should have a unique identity and in today’s world one really cannot put a claim to privacy protection especially against one’s own government.

There is a lot more that this government has done since it came to power – 

  • We have become more aggressive on borders and rightly so;
  • There are various inclusive announcements for under privileged population;
  • We are working towards modernising infrastructure;
  • Our global positioning has improved significantly; and so on and so forth.

“I must admit here that I have rarely seen anyone as hard working as our Prime Minister Mr. Narendra Modi. He is like 24/ 7. Think about it, am sure you will agree !”

Now the points that I think are currently working against the Indian government and if remain unchecked can potentially effect the next general elections

  • Too much marketing and publicity – ironically this was exactly what worked for BJP in the last general elections. However, as a natural fallout of that, people have started watching every action of the government very closely and hence margin of error has reduced significantly. E.g., news related with surgical strikes, recent Gujarat Rajya Sabha Polls etc.
  • Ambitious promises – this is related with the first point. It reminds me of the first thing that was taught to us at Goldman Sachs – “never overpromise and under deliver”. It has many a times happened in the recent past and because of extended marketing and publicity the same gets snowballed. E.g., free Japanese money for Bullet trains, quantum of black money caught during demonetisation etc.
  • Communal incidents – I strongly believe that most Indians have matured, are focused on development and only aim for better living standards. Anything else might not really work and can turn away the voters.
  • Too many sticks with no carrots – this is especially true for small & medium sized businesses as well as Indian middle class. There is too much of news flow around black money, shell companies, income tax raids, higher fuel prices etc. Not to say that these measures are not required but again I believe carrots are equally important to bring the confidence back.
  • Unwarranted distractions – Given the backdrop of so many significant announcements, I think it makes more sense to let businesses absorb and stabilise around them. However, inadvertently we are regularly getting new unwarranted distractions. Classic point in case is today’s news related to stopping cigarette & paan shops from selling consumer goods.
  • Better relations with opposition – India is a democracy and opposition’s role is equally important. Simply ignoring them can potentially backfire too. I don’t agree that opposition’s only qualification is corruption and they did nothing for last 65 years. Else India would not have reached where it has.

Government should not forget that if it took one year for Indian citizens to forget someone that ruled them for 65 years the same can quickly happen with the one who ruled them for 5 years. Results of some of the recent student union elections are a testimony to the same.

I must admit that the article has got extended beyond what I had originally thought. Hopefully have not bored you and echoed your reading of the current situation in India as well !

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About the author

Nitin Jain

A finance professional with around 20 years of investing experience in Indian markets both on buy and sell side, equity and debt, private and public with some of the best organizations globally including Goldman Sachs, ICICI Group, ICRA and others. He is a All India Silver Medalist CA by qualification.

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[…] 3. Time for the CarrotsThis is applicable for both the consumers and the businesses. The fact remains that multiple clean-up initiatives have been taken in the last few years – Demonetisation, GST, Dormant Companies, Raids/ Searches, tightening of the Auditors etc. All of us agree that they have been mostly in the right direction. However, now may be the time to also compensate and offer carrots. Carrots not in terms of providing huge money or exemptions but recognition/ awards for good work, fiscal incentives for good behavior, government contracts to the performers, quick resolution of tax or other disputes. I had written for the carrots way back in September 2017 as well (please refer the link).  […]

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