Politics

The new Janata Party will be a challenge for Modi in Bihar

Vivek Kaul

The year was 1977. The emergency had just ended. The opposition leaders who had been imprisoned during the course of the emergency had just released. They were holding a massive rally at the Ram Lila maidan.
It was a rainy day in Delhi and well past 9.30pm by the time Atal Bihari Vajpayee rose to speak. He was the star speaker for the evening and the people who had turned up at the rally had stayed back just to hear him.
To the shouts of “Indira Gandhi murdabad, Atal Bihari zindabad,” Vajpayee started his speech with a couplet:
“Baad muddat ke mile hain deewane,
Kehne sunne ko bahut hain afsane,
Khuli hawa mein zara saans to le lein,
kab tak rahegi aazadi kaun jaane.”
(It has been an age since we whom they call mad have had the courage to meet,
There are tales to tell and tales to hear,
But first let us breathe deeply of the free air,
For we know not how long our freedom will last). (Source: Tavleen Singh’s Durbar)

In the time to come all the major opposition parties came together and formed the Janata Party. This was the only way they could take on Indira Gandhi by ensuring that their votes did not split. The party won 295 seats in the Lok Sabha elections that followed and thus came to power. The largest number of 93 MPs were of the Jana Sangha (now the Bhartiya Janata Party) origin. Forty four MPs came from the Congress (O) party. Seventy one MPs came from Charan Singh’s Bhartiya Lok Dal. Jagjivan Ram’s Congress for Democracy brought in 28 MPs.
A large number of the Lok Sabha seats that the party won was limited to North India, given that the southern part of the country hadn’t really felt the ill-effects of the emergency implemented by Indira Gandhi as much as the north India had. Given this, Indira Gandhi’s Congress still managed to win 154 seats though they were wiped out in Uttar Pradesh with both Indira and her son Sanjay losing elections.
If one leaves out the Jana Sangha from this, the other parties were what we would call socialists, in the Indian sense of the term.
Nearly four decades later some of these socialists who were a part of the Janata Party have decided to come together again. This time to take on Narendra Modi. The parties which are merging together are Mulayam Singh Yadav’s Samajwadi Party, Lalu Prasad Yadav’s Rashtriya Janata Dal, Nitish Kumar’s Janata Dal(United) Indian National Lok Dal of Om Prakash Chauthala, Janata Dal(Secular) of HD Deve Gowda and Kamal Morarka’s Samajwadi Janata Party.
Mulayam Singh Yadav has been announced as the head of the party in Parliament, though its name and symbol haven’t been decided as yet. The Times of India reports that the party is likely to be called Samajwadi Janata Dal with the cycle as its symbol (which is the current symbol of the Samajwadi party).
So how strong a challenge is this new party going to be to Narendra Modi? Will it be as strong as the Janata Party was to Indira Gandhi? The first thing we need to understand is that the party has been formed when the next Lok Sabha election is still four years away.
After the merger, the party will have 15 members in the Lok Sabha, which is minuscule to the 295 members that the Janata Party had. In the Rajya Sabha the party will have 30 members. In that sense, the party will provide very little challenge to Narendra Modi.
Further, the support of all the parties which are coming together is heavily localized. Samajwadi Party is strong in Uttar Pradesh. The Indian National Lok Dal is strong in Haryana and Dev Gowda’s Janata Dal(Secular) is strong in parts of Karanatka. Hence, to that extent no consolidation of votes can be expected against Narendra Modi.
The only exception to this is Bihar. In Bihar, both Lalu’s Rashtriya Janata Dal(RJD) and Nitish’s Janata Dal (United)(JD(U)) are on a strong wicket. Data from the election commission shows that the combine of Bhartiya Janata Party (BJP) and Ram Vilas Paswan’s Lok Janshakti Party(LJP) got 35.8% of the votes polled during the Lok Sabha elections last year.
The RJD and the Congress Party which fought the elections together got 20.1% and 8.4% of the votes respectively. The Janata Dal(United) which fought the elections separately got 15.8% of the votes. Hence, the vote percentage of JD(U) + RJD matches that of the BJP + LJP. Further, RJD+JD(U)+Congress got more votes than BJP + LJP. Nevertheless, since RJD+ Congress and JD(U) were not in alliance, these votes did not translate into Lok Sabha seats.
Things changed in the by-elections to 10 assembly seats that happened in August 2014. In these elections the JD(U) came together with the RJD+Congress and took on BJP+LJP. The data from the election commission shows that the RJD+Congress+JD(U) got 45.6% of the total votes polled. The BJP+LJP got 37.9% of the votes polled. Given that, this time JD(U) was not fighting the elections separately, the votes polled translated into assembly seats as well, unlike the Lok Sabha polls. The RJD+ Congress+ JD(U) got six out of the ten assembly seats.
Hence, in Bihar, given the way the caste combinations work, the new Janata Party can be a potent force to take on Modi. The trouble is that Lalu and Nitish, despite the claims that they make in public these days, do not get along with each other.
Nitish became the Chief Minister of Bihar in 2005, more than three decades after he entered politics in the early 1970s. And for the first half of his political career, he propped up Lalu Prasad Yadav even though he knew that Lalu wasn’t fit to govern. Journalist Sankarshan Thakur puts this question to Nitish in his book Single Man: “Why did you promote Laloo Yadav so actively in your early years?” he asked.
And surprisingly, Nitish gave an honest answer. As Thakur writes “’But where was there ever even the question of promoting Laloo Yadav?’ he mumbled…’We always knew what quality of man he was, utterly unfit to govern, totally lacking vision or focus.”
So why then did Nitish decide to support him? “There wasn’t any other choice at that time,’ Nitish countered…’We came from a certain kind of politics. Backward communities had to be given prime space and Laloo belonged to the most powerful section of Backwards, politically and numerically.”
And this logic still continues to remain valid. The next assembly elections in Bihar are scheduled for later this year is in November 2015. And the chief minister’s post will be a bone of contention between Lalu and Nitish. It remains to be seen whether the new party will be able to survive this.
In other states the new party may be able to cause some damage to Modi only if it comes together with the Congress. To conclude, the biggest challenge for the party will be to survive till the next Lok Sabha elections in 2019.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The article originally appeared on Firstpost on April 16, 2015 

Why politicians love paper money

3D chrome Dollar symbolMoney makes money, and the more money that money makes, makes more money—Benjamin Franklin


John Maynard Keynes was the most influential economist of the twentieth century. Keynes really came into his own in 1936, when his magnum opus The General Theory of Employment, Interest and Money was published.
One of the core points of the book was that when it came to thrift or saving, the economics of the individual differed from the economics of the entire system. For an individual to save by cutting down on expenditure made tremendous sense. But when a society, as a whole, began to save more, there was a problem.
This was because the expenditure of one person was the income for another. Hence, when expenditure began to go down, incomes would fall too, leading to a further reduction in expenditure. And so the cycle would continue. The aggregate demand of a society as a whole would fall in the end, leading to either lower prices or lower production or both, thus impeding economic growth and causing economic contraction.
As per Keynes, the way out of this situation was for someone to spend more. Citizens and businesses were not willing to spend more, given the state of the economy. So, the only way out of this situation was for the government to spend more on public works and other programs. This would act as a stimulus and thus cure the recession.
This has been standard prescription given by economists when countries are not doing well. Having said that the basic idea put forward by Keynes had been known for a very long time. Even Roman kings had practised it.
As Kabir Sehgal writes in Coined—The Rich Life of Money and How Its History Has Shaped Us: “Julius Caesar left his stamp on Roman monetary history by using the gold treasure he pillaged from Gaul to increase the quantity of the aureus in circulation…These new coins helped Rome cope with a financial crisis of 49BC.” So, even Julius Caesar had used Keynes’ prescription of increasing government spending during recessionary times and thus helped revive the economy.
Caesar’s successor Augustus followed the same prescription in order to revive the Roman economy when it was suffering from a depression, during the course of his rule. As Sehgal writes: “Augustus used loot captured from Egypt to spend lavishly on civil projects and enhanced welfare programs…In time…the economy recovered.”
Interestingly, the rulers that followed Julius and Augustus, followed their model. One such ruler was Nero who ruled Rome between AD 54 and AD 68 and had to face a depression in AD 62. In AD 64, a fire blazed through Rome and this created further problems. But Nero got through this by increasing “food subsidies for the public” and “spending on civil projects like canals”.
But along with following the Keynesian model, Nero did something else as well. He started reducing the quantity of metal in the Roman coins. Nero reduced the silver content of denarius (a silver coin) by 10%. He also reduced the gold content of the aureus by 10 percent in AD 64. By reducing the metal content in coins Nero was able to produce more coins. In the modern sense, he was thus able to increase money supply by around 7%.
What was the idea behind this debasement of metallic money? “The story goes that with more money flowing through the economy, prices will rise to reflect the reduced value of the currency, which will spur individuals and businesses to spend now rather than later, leading to a bump in economic activity,” writes Sehgal.
Nero was the not the first ruler to practice this strategy. Neither was he the last one. This is a practise that has been regularly resorted to by kings, queens, dictators, general secretaries, and politicians ever since.
In fact, Nero couldn’t have gone about it as well as politicians and central bankers do, in this day and age. The reason for this lies in the fact that during Nero’s time Rome used gold and silver coins as money. As Sehgal writes: “Nero was unable to affect uniformly his entire currency at once. When he issued a new batch of debased coins[i.e. coins with lower metal content] there were still high-grade coins{i.e. the coins that had been issued earlier and had a higher amount of metal content in them] in circulation. The value of these high-grade coins would appreciate, yet it would take time for them to be hoarded and removed from circulation.” They would be hoarded because they had more metal in them than the new coins.
But with paper money there are no such problems. When a central bank issues more paper money it “adjusts the overall money supply” and “affects the value of all notes simultaneously”. “Today it’s still common practice for central banks to adjust the supply of money to abet political goals,” writes Sehgal.
Take the case of Bank of Japan—the Japanese central bank is mandated to print 80 trillion yen annually so that it can create some inflation in Japan and get people to spend money (as explained above) and in the process create some economic growth. The idea also is to drive down the value of the yen against other currencies so that Japanese exports pick up. A paper money system gives the government and the central bank this kind of flexibility. This is something that would not be easily possible in a metallic based system. In order to flood the financial system with more gold or more silver, more gold or silver would be required. Unlike paper money, metallic money cannot be created out of thin air.
Also, history has shown that debasement of currency leads to inflation as more and more money chases the same amount of goods and services. And inflation benefits borrowers as they repay money they had borrowed with money that is less valuable than it was before. Further, governments run by politicians are themselves big borrowers. Hence, inflation ends up benefiting governments as well.
It is much easier to create inflation with a paper money system than with metal based currencies. In fact, a few years back I spoke to Russell Napier of CLSA who made a very interesting point: “The history of the paper currency system, or the fiat currency system is really the history of democracy… Within the metal currency, there was very limited ability for elected governments to manipulate that currency. And I know this is why people with savings and people with money like the gold standard. They like it because it reduces the ability of politicians to play around with the quantity of money. But we have to remember that most people don’t have savings. They don’t have capital. And that’s why we got the paper currency in the first place. It was to allow the democracies. Democracy will always turn toward paper currency and unless you see the destruction of democracy in the developed world, and I do not see that, we will stay with paper currencies and not return to metallic currencies or metallic based currencies.”
And this best explains why politicians love paper money.

The column originally appeared on The Daily Reckoning on April 16, 2015

Benevolent autocracy: India is drawing the wrong lesson from Lee Kuan Yew

Lee_Kuan_Yew


One of the favourite arguments offered by middle class Indian men (especially when all other arguments fail) is that “India needs a benevolent autocrat,” if the economy has to grow at a fast pace. The word “autocrat” is often used interchangeably with the world “dictator”.
This argument is often made by the corporate types who have made their money in life and are now looking for some intellectual stimulation through what they consider as philosophical musings.
The argument has gained a new life with the death of Lee Kuan Yew (or LKY as he was commonly known as) who was the prime minister of the city-state of Singapore from 1959 to 1990. Between 1990 and 2011, he was the senior minister as well as minister mentor of Singapore. LKY died on March 23, 2015.
Data from the World Bank shows that the per capita income of Singapore in 2013 was $55,182.5. When LKY took over as the prime minister in 1959, the per capita income was $400. What this clearly tells us is that LKY turned around Singapore from a poor country to a developed country in about one generation. When he became the prime minister, Singapore was basically swamp with almost no natural resources. He turned it around into a global financial centre first and now an entertainment destination as well.
His achievements not withstanding, LKY was an autocrat who was honest enough to admit it. As he said in an interview to The Straits Times in April 1987: “I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn’t be here today. And I say without the slightest remorse, that we wouldn’t be here, we would not have made economic progress, if we had not intervened on very personal matters – who your neighbor is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think.”
But as I have said above LKY’s autocratic style of working paid huge dividends for Singapore. It was transformed from a swamp to a developed country in around 50 years. And that was a huge achievement.
This high growth that Singapore achieved has led people to suggest that India also needs a benevolent autocrat to grow at a fast pace. LKY and Singapore are not the only example that is given to buttress this point. There are other examples as well—Chile under Augusto Pinochet. Or countries like Hong Kong, Singapore, South Korea and Taiwan, which grew at a very fast rate under autocratic regimes. They moved to a democratic form of government only after having grown fast for a significant period of time.
Then there is the example of China. The country is ruled by one party, the Chinese Communist Party (CCP).  It has had a generation of fast economic growth without any democracy. All this has led many people to believe that if a country has to grow fast it needs to be under an autocratic regime. Hence, India needs a “benevolent autocrat,” is the argument offered. QED.
But are things as simple as that? Or are people becoming victims of what behavioural economists term as the “availability heuristic”? As John Allen Paulos writes in A Mathematician Reads the Newspaper: “First described by psychologists Amos Tversky and Daniel Kahneman, it is nothing more than strong disposition to make judgements or evaluations in light of the first thing that comes to mind (or is “available” to the mind).”
So, Lee Kuan Yew was an autocrat. Under him Singapore grew at a very rapid rate. Hence, India needs a benevolent autocrat as well, if it has to grow at a very fast rate. That’s how it works for those who feel that India needs a “benevolent autocrat”.
Economist William Easterly has done some interesting research in this area, which he summarises in a research paper titled Benevolent Autocrats. As he writes: “The probability that you are an autocrat IF you are a growth success is 90 percent. This probability seems to influence the discussion in favour of autocrats.”
But that is the wrong question to ask. The question that needs to be asked should be exactly opposite—if a country is governed by an autocrat what are the chances that it will be a growth success? “The relevant probability is whether you are a growth success IF you are an autocrat, which is only 10 percent,” writes Easterly. To put it simply—most fast growing nations are ruled by autocrats. Nevertheless, most autocracies do not grow fast.
The thing is that one never knows whether an autocrat will turn out to be benevolent or will he turn out to be an out an out dictator, once he starts to rule. That depends on the luck of the draw. Most autocrats usually end up screwing up the economies they rule. This is a simple point that middle class Indian men who want a “benevolent autocrat” to rule this country, need to understand.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The column originally appeared on Firstpost on Mar 30, 2015

India cannot be governed only out of Delhi

narendra_modiOne of the better things that has happened since Narendra Modi came to power in May 2014, is the promotion of cooperative federalism. Cooperative federalism is essentially a system in which the governments at the central, state and local level cooperate with another to solve common problems. The system is not dominated by the central government.
The Indian Constitution gives pre-eminence to the central government. As the former finance minister and senior leader of the Bhartiya Janata Party explained in a speech: “The first Article of the Constitution talks about India that is Bharat being a Union of States. It is not a federation of states. It is described as the Union of states and there are a number of articles in the Constitution which emphasise the overwhelming character, the unitary character of our polity. Article 3 gives the power to the Parliament of India to create a new state, to bifurcate states, to change the boundary of states, to change the name of a state. Now can you do it in a federation of states? This is a power which gives pre-eminence to the Centre, to the Union, through its Parliament.” There are several other articles which give pre-eminence to the central government.
Or take the case of the Planning Commission. It was not a constitutional body and was set up only by an executive order of the central government. The Commission had a huge role to play in the money that the states received from the central government over the years.
The Indian Constitution was framed in the late 1940s and came into effect on January 26, 1950. The challenges that a newly independent country faced were very different from what it faces now. As Sinha said: “When the Constitution was framed and given to the people of this country in 1950, all this was very well, because we had challenges and those challenges had to be met and therefore we created a Union of States and not a Federation of States because India had to remain united. Over a period of time, as these threats and dangers have receded.”
Also, a country as diverse as India is, cannot be governed out of New Delhi. Currently there are 66 central government schemes. But does every state need all of these schemes? Does one state need one scheme more than the other? And at a more basic level does this one size fits all approach really work? These are questions that need to be answered.
In fact, in his first independence speech Modi dissolved the Planning Commission. It has been replaced by the NITI Aayog. At the first meeting of the NITI Aayog’s governing council some interesting questions were raised by the chief ministers of various states. The chief minister of Kerala, Oomen Chandy, rightly pointed out that schemes like Jan Dhan Yojana and Beti Bachao, had little relevance in his state, which has very good social development indicators.
Manohar Lal Khattar, the chief minister of Haryana, suggested that central government schemes should be done away with totally. Vasundra Raje, chief minister of Rajasthan suggested that number of such schemes should be limited to ten.
The central government allocates funds to these schemes and then monitors them (hopefully). But they need to be managed at the local level. And how is it possible for the bureaucracy at the local level to manage 66 schemes at the same time? So, there is no denying that the number of central government sponsored schemes need to come down. A committee of chief ministers has been formed to study these schemes.
Another interesting thing that has happened is that the fourteenth finance commission has increased the states share of central taxes to 42% from the earlier 32%. As the commission said in its report: “increasing the share of tax devolution to 42 per cent of the divisible pool would serve the twin objectives of increasing the flow of unconditional transfers to the states and yet leave appropriate fiscal space for the Union to carry out specific purpose transfers to the states.”
Increasing the flow of unconditional transfers to states also goes a long way in strengthening cooperative federalism. The dependence of the state governments on central government grants will come down. Along with this, the central government has also decided to hand over all the money coming from the auctioning of coal blocks to the states in which the blocks are located.
One question that crops up here is whether the states have the systems in place to spend this money that is likely to come to them in the years to come. As economists Taimur Baig and Kaushik Das of Deutsche Bank Research ask in a recent research note: “The question is whether the states have the administrative capability and willingness to be able to spend the increased allocation, productively and transparently. This remains an open question at this stage.”
Further, it needs to be pointed out that the combined fiscal deficit of the states has been falling over the years. In 2009-2010, it amounted to 2.91% of the gross domestic product(GDP). In 2014-2015, it is expected to be at 1.90% of the GDP. Fiscal deficit is the difference between what a government earns and what it spends.
But the overall average number does not tell us the complete story. Within this, some states have done well on the fiscal front whereas some haven’t. As State Finances: A Study Of Budgets Of 2013-14 authored by the RBI points out: ““Many state governments have accumulated sizeable cash surpluses in recent years, reflecting the fiscal consolidation process as well as their precautionary motive of building a cushion for their expenditures.”
“On one end of the spectrum, there are states such as Orissa, Maharashtra, Tamil Nadu and Karnataka whose fiscal position is in better shape, while at the opposite end there are states such as Bihar, West Bengal and Uttar Pradesh which fare poorly in terms of fiscal prudence,” Baig and Das point out.
States which haven’t done well on the fiscal front are also the ones which have a larger population and at the same time they lag behind the country when it comes to per capita income. This means that they will get a higher share of central taxes as can be seen from the following table.
As per the formula Uttar Pradesh (18%), Bihar (9.7%) and West Bengal(7.3%) will corner 34% of the central government taxes. These are the states where money actually needs to be spent. Nevertheless, the question is whether these states have the mechanisms in place to spend the extra money that will come to them. As Baig and Das point out: “States which are poor and populous (but fiscally weak), such as Uttar Pradesh, Bihar and West Bengal would be receiving a higher allocation of the increased transfer of funds from the central government. Transferring larger share of resources to states which have historically been fiscally imprudent, could prove to be counterproductive.”
This is something which could hold back the benefits of cooperative federalism in the years to come and needs to be set right. Ultimately the state governments are much closer to the people and have a much better understanding of where the money is best spent.

The column originally appeared on The Daily Reckoning on Mar 25, 2015

Modi’s mann ki baat on land acquisition is the first attempt to explain reform in 25 years

narendra_modi
In a column I wrote on February 27, 2015, I had said that prime minister Narendra Modi should talk to the people of this country directly through his mann ki baat programme on All India Radio. Modi spoke to the people of India directly yesterday on mann ki baat and addressed the contentious issue of land acquisition.
Among other things he criticized the Congress party which has been protesting against The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014.
Modi said that “those projecting themselves as sympathisers of farmers and undertaking protests,” had been using the Land Acquisition Act 1894, a 120 year-old law for 60-65 years after independence. In the process he exposed the hypocrisy of the Congress party, which has been in power in every decade after independence, and had the opportunity to set things right on the land acquisition front. But it never went around to doing this.
The Land Acquisition Act 1894, had been the law of the land until 2013. This Act gave unparalleled powers to the government to acquire land. A 1985 version of this Act stated: “Whenever it appears to the [appropriate Government] the land in any locality [is needed or] is likely to be needed for any public purpose [or for a company], a notification to that effect shall be published in the Official Gazette [and in two daily newspapers circulating in that locality of which at least one shall be in the regional language], and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.”
This was not surprising given that the law came into being when the British ruled India. This allowed governments all over India to acquire land from the public. Many governments passed on this land to corporates, and in the process both the government and the corporates made money. The only one who did not make money was the individual whose land was being acquired. Of course, this did not go unnoticed. People saw politicians and corporates making a killing in the process. And the trust that is required for any system to work completely broke down. In 2013, the Congress led United Progressive Alliance (UPA) brought in The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013.
One of the major provisions of the Act was that private companies acquiring land would require the prior consent of at least eighty percent of the affected families. In case of public-private partnerships(PPP) the prior consent was required from at least seventy percent of the affected families.
The ordinance brought in the Modi government is essentially the same as the 2013 Act, except for a few changes. The ordinance does away with the requirement of prior consent for land being acquired for affordable housing, defence, defence production, rural infrastructure including electrification, industrial corridors etc. There is nothing wrong with this change.
Also, the 2013 Act stipulated that the land acquisition carried out under 13 Acts of Parliament which dealt with land acquired for the purpose of atomic energy, highways, national highways, mining, railways, metro etc., were exempted from the Act. The 2014 ordinance did away with this distinction, which meant that land being acquired under these Acts will also be compensated at the same rate as promised in the 2013 Act. Doing away with this distinction is a step in the right direction.
Prime minister Modi in his address pointed out that maximum land is acquired under these 13 acts. “If we hadn’t approved this amendment, then the farmer would have continued losing land to projects with low compensation,” he said. He also put a rhetorical question to the people of this country: “Tell me if what we did was wrong?…Can someone tell me if this improvement goes against farmers?”
As per the 2013 Act, for rural areas the minimum compensation promised is anywhere between two to four times the market value of land along with the value of the assets on that land. For urban areas the minimum compensation promised is two times the market value of land along with the value of the assets on that land. So, land acquired under the 13 Acts of Parliament will also be compensated at the same rate as the land acquired for other projects.
Modi in his address clarified that the “ordinance does not change the compensation legislated in the 2013 Act one bit.” He also addressed the genuine concern of people that more than the land that is required for a project is typically taken on. He assured them that in the days to come there would be a proper assessment of how much land will be required for a project and this will ensure that excess land is not acquired.
Indian corporates over the years have acquired land through the government and become lazy in the process. Also, many of them started to see themselves as landlords and wanted land just for the heck of it. This can be said from the inefficient use of industrial land in India. If Modi follows what he has said that will be another step in the right direction. It will also do a lot to rebuilt the trust required for the process of land acquisition to work efficiently.
Agriculture, forestry and fishing form around 18% of the total economic output of the country. Data from the India Brand Equity Foundation, a trust established by the ministry of commerce and industry, points out that agriculture “employs just a little less than 50 per cent of the country’s workforce”.
If nearly 50% of country’s workforce is engaged in an activity which produces only 18% of its economic output, there is something that is not quite right about the entire scenario. What this clearly tells us is that too many Indians are dependent on agriculture and this number needs to come down. The situation gets even worse once you take into account the fact that most people who work on farms don’t totally depend on income from the farm. Only 17 percent of them survive entirely on money from their farm.
Modi addressed this issue as well by saying: “In every household, the farmer wants only one son to stay in farming. But he wants other children to get out there and work because he knows that in order to run a household in this day and age different endeavours need to be made.” He then went to say that given this scenario what is wrong with the government acquiring land for building an industrial corridor and ensuring that jobs are created in the vicinity of where farmers live. This was another important issue that Modi addressed in the programme.
To conclude, economic reforms in this country have also been carried out through stealth. No government in this country has ever made an effort to explain economic reform to people. This was the first time since the process of economic reform started in 1991, when someone has made an effort to explain it in simple layman terms to the people of this country. In fact, what Modi has started needs to continue. Other leaders of the Bhartiya Janata Party now need to take this forward by talking to the people of this country directly.

The column originally appeared on www.firstpost.com on Mar 23, 2015

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)