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India Editor’s Note Foundation Dear Readers, Journal I am lucky that I get to travel across the world as part of my professional commitments. My travels expose me to not only remarkable places but also very accomplished and perceptible individuals across the globe. Wherever I go I hear flowing tributes and accolades about India. India is a country that evokes so many positive emotions in people in all its dimensions from Vol. III its glorious past to its potential. Then when I come back to the country Issue No.3 there seems to be so much negativity and haplessness about our future in the media and the intelligentsia that I am often left completely confused. Is July 2015 it that the world sees something in us that we are not able to see or are we deluding the world and our reality is indeed very different from perception. The Modi Government has just completed a year in office. The last one year has seen changes that were unheard of and till now unseen atleast in Delhi if not across the country. Here is a government that has tried to bring in financial inclusion and social security across the country in a Editor manner that is both unprecedented in both its scope and size. And yet there Shaurya Doval are many naysayers who complain that not enough has been done and that the performance has not kept pace with the aspirations. In our focus section we are lucky to have from some of the finest minds in the country a Assistant Editor rather comprehensive assessment of the one year performance of the Modi Anjana Deepthi Sarkar. The authors have tried to put in perspective in the hits and misses of the government and the direction in which this government has started to take the nation and its people and what it entails for the future of the nation. I hope after reading them you will be able to make a much more informed judgment of the performance of the government and possibly also refine your own views on the same. Publisher At India Foundation we have been busy with our activities on promoting India Foundation the national cause in our little way. As a think tank we have a clear charter New Delhi to study and solve for the nation problems and we try to stick as close as possible to our defined objectives. We have published as usual a report E-mail [email protected] out on our activities during the period. We are hopeful that you will enjoy Website reading about our activities and get associated with them . www.indiafoundation.in We are already on the job for organizing so many large conclaves over the next few months and will revert back to you in the coming issues as we make further progress on the same. Please keep writing to us on your ideas. We value them tremendously and they help us plan our activities and our research better. Our nation is never short on opportunities to positively contribute. for private circulation only India Foundation Journal, July 2015 {1} TABLE OF CONTENTS FOCUS Modi Sarkar : Economic Growth and Governance ............................................................... 3 - Shakti Sinha Economy and Diplomacy under Modi ................................................................................... 8 - Ashok Malik First Year of Modi Government and India’s Enhanced Stature .......................................... 11 - Alok Bansal Modi's India Build Out: Brick by Brick ............................................................................... 18 - M. J. Akbar OP-EDs Smart City and Safe City or City Survillance Projects in India ........................................... 21 - Cdr (Retd) Sudhir Kumar Education : Looking beyond the Books ............................................................................... 31 - Aditya Tiwari Upstart India: A Case to Complement “Make in India” with “Start in India”..................... 34 - Apurv Mishra REPORTS India - Bangladesh Relations : Bilateralism and Beyond ..................................................... 37 4th Young Thinkers Meet .................................................................................................... 40 BOOK REVIEW Wings of Fire - An Autobiography - APJ Abdul Kalam With Arun Tiwari ......................... 46 {2} India Foundation Journal, July 2015 FOCUS Modi Sarkar: Economic Growth and Governance *Shakti Sinha he Modi sarkar, one year plus, is increasingly bureaucrat be hauled up before CBI and sundry facing the music from many commentators who authorities. This in an environment where the Tare disappointed with the pace of economic ‘problem-creator’ thrived, those who could roadblock reforms, and of lack of systemic changes in development were the politically correct even hailed governance. This is not a surprise but not for the as ‘pro-poor’ though the poor were never consulted expected reasons; it has in fact performed quite whether they approved of such behaviour and creditably. More than any government, it has shown actions. Never mind that each of these roadblocks the most determination to try move India to a different could be bypassed at a price. Naturally the cynical growth trajectory. But the story is not one of found it a perfect environment for rent-seeking with unalloyed success even as the government has crony capitalism in full flow as seen, for example, in launched interesting and comprehensive initiatives the allotment of scare natural resources – captive across sectors that should lead India to sustainable mines, spectrum etc. high growth. Restoration to normal growth rates over the past Part of the reason for this disappointment is year is a considerable achievement but why is that obviously the near-paralytic performance of UPA II, professional commentators, not politically motivated, which had lost the plot altogether. The result was are feeling dissatisfied by what they see as lack of persistent high inflation, particularly of food articles action. They wanted to see the government move even as growth plunged. Looking back, it seems quite decisively, clear up the cob-webs that the years of unbelievable that a country with a per capita income policy paralysis left behind. From the perspective of of US$ 1500 (2013) should be stuck in stag-inflation, many of these commentators the government’s with no obvious policy tools available to pull India out economic performance and direction is below par of the economic quagmire. Persistent fiscal deficits but that is because they expected revolutionary left no headroom for pump-priming the economy, change. Therefore, they discount the efforts made, leave alone for carrying out the much-needed public and attribute the recovery more to sentiment than to investments in infrastructure to sort out actual efforts. the bottlenecks constraining private investment. The Basically, an unstated assumption was that Modi Reserve Bank could not reduce interest rates in the would be India’s Thatcher and Reagan rolled into face of the twin evils of high inflation and high fiscal one, who would ‘unshackle’ the productive forces in deficits, even as the economy was crying for a rate line with how Thatcher-Reagan had “zestily slashed cut. Starved of both public and private investment, public spending, cut welfare programmes, cut taxes, the economy was trapped in a low-equilibrium cycle. privatized government-owned enterprises, battled The then Finance Minister, and now our Rashtrapati, trade unions, and the like.” In fact, this is a called the state of affairs as ‘policy paralysis’ as the simplification of the economic philosophies of both governance system went into a shell with a refusal Thatcher and Reagan, particularly the latter under to be identified as a problem solver lest the efficient whom the federal deficit ballooned. The other, *The author is Chairman, South Asian Institute for Strategic Affairs, India India Foundation Journal, July 2015 {3} unstated, model is that of the big-bang reforms Delhi could no longer run India and that states must developed at Harvard under the leadership of the be empowered. And he placed the citizens of India economist Jeffery Sachs. Russia, Poland and Bolivia at the centre, recalling how Gandhi had broadened tried this, the former two in the wake of the collapse the freedom struggle to make it a mass movement. of their communist regimes. It worked after a fashion According to him, economic development could not in Poland, which along with the Baltic nations made be a task of the government alone; people’s the most dramatic and successful transition to involvement and initiatives was a must. He moved becoming market economies with the least disruption. the debate away from poverty alleviation to its But the idea of a knight in shining armour cutting removal, which required a mission mode approach. through the dead-weights and launching a country People must be assured a life of dignity, which implied on path to rapid growth persists. India is such an more jobs and the freedom of choice. analysis in better placed that what Poland was in Surprisingly for many, he spoke up for both goods 1990 to adopt a big-bang approach. At the bare and services tax (GST) and for FDI. However, he minimum, the expectations were that supply-side said that before GST could be rolled out, it required distortions in land, labour and factor markets would suitable information-technology (IT) infrastructure in be tackled aggressively. Instead what has been on place. (Gujarat and Madhya Pradesh, both BJP states, offer has been largely incremental movement lacking were seen as two hold-outs preventing GST from in ambition and boldness. Are

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