‘We have ended the era of high level corruption’
Prime Minister Narendra Modi on Friday said that various economic parameters have improved since the NDA Government took office and a turnaround has been achieved in the performance of several sectors including urea fertiliser production, output of coal and power generation,
Addressing a global business summit here, he said “business” and “profits” had become bad words, “We have changed that.” The government had inherited a struggling economy, just recovering from a currency crisis and in less than two years, it has taken India to the top of global league tables of foreign investment and growth, he said.
Ahead of the budget, making a case for the government’s plan for the withdrawal of tax exemptions that were announced in the last budget, Mr. Modi said that he was “surprised” when a benefit was given to farmers or to the poor was called a “subsidy” but a benefit given to industry or commerce was called an “incentive”. “I wonder whether, if the fertiliser subsidy is re-named as “incentive for agricultural production” experts will view it differently.”
He said: “We must ask ourselves whether this difference in language also reflects a difference in our attitude? Why is it that subsidies going to the well-off are portrayed in a positive manner?”
The total revenue loss from incentives to corporate tax payers, he said, was over Rs. 62,000 crore. Dividends and long-term capital gains on shares traded in stock exchanges, he said, were totally exempted from income tax even though it was not the poor who earned them.
The role of a government, Mr. Modi said, did not end with the economy alone as good governance was crucial. “We have taken numerous steps which have transformative potential… We have ended the era of high level corruption… This is a fact acknowledged by Indians and foreigners, and by critics and supporters of this government.”
He said that the government had “ended political interference and crony capitalism in nationalised banks.” It had for the first time appointed several heads of public sector banks from the private sector and with transparent auctions it had cleaned up the natural resources sector which was riddled with scandals.
For the last four quarters, India had been the fastest growing large economy in the world, he said. In 2014-15, while contributing 7.4% of global GDP in purchasing power terms, India contributed 12.5% to global growth itself. “Thus its contribution to growth is 68% higher than its share of the global economy,” the Prime Minister said.
Growth and foreign investment had increased and inflation and the fiscal deficit had decreased, he said. And despite a slow-down in global trade, the balance of payments deficit has also decreased. At a time when global Foreign Direct Investment (FDI) has fallen, FDI in India had increased by 39% in the last 18 months.
These statistics, however, he said further, gave only a partial picture of what the Government was attempting and achieving. “It is often said “the devil is in the detail”… But I believe that God is in the proper execution of many so-called details… It is these so-called details which, when done well, add up to a big picture.”
Sharing the details, he said: India’s fastest average turnaround time in ports was in 2015 as was the highest ever increase in railway capital expenditure. The highest ever software exports were achieved in 2015 as was the highest ever rank in World Bank Doing Business indicators.
These, Mr. Modi said, indicated that improved governance was as important as economic reform. “When I give these figures, it is important to remember that in the preceding years, many of these indicators were moving in the opposite direction… Not only have many indicators improved, but they have improved by large margins”. He gave the example of the total number of National Highway kilometres awarded, which was about 3,500 in 2013-14, but more than doubled in the first year of the government to nearly 8,000 km, an all-time high. This year we are planning to award 10,000 km, he said.