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Modi must tell people how he will solve economic problems

comment Updated: Mar 04, 2014 23:52 IST
Indian economy

For any party that is seeking to come to power, the electoral pitch should also clearly outline its economic policy. This is even more critical at a time when India’s economy needs an overhaul after sputtering over haywire prices and severe industrial deceleration.

Let’s first examine the problems that need immediate attention. There’s no gainsaying the fact that low investment and a precarious fiscal situation need to be given the highest policy priority. There have been very few periods in India’s contemporary history when prices have remained so stubbornly high for such a long period.

On the other hand, India’s business leaders have been ratcheting up their demand for lower borrowing costs. Their argument: costly loans and inputs have upset their plans. Parliamentary standstill has also hurt the business climate. Besides, India needs about $1 trillion (about Rs 62 lakh crore) over the next five years to shore up its crumbling, inadequate infrastructure.

That will not happen unless an environment is created where investors are not scared of locking up capital in long-gestation projects, such as roads, ports and highways.

So far, the top leadership of the BJP, including its prime ministerial candidate Narendra Modi, has only identified the kinks in the economy that need straightening, but leaves it at that. The phraseology of Modi, and other BJP leaders’ speeches, is long on broad generalities — tax simplification, easier entry for foreign capital, improving welfare delivery but short on specifics.

Last week Mr Modi called upon Indian traders at a meeting of the Confederation of All India Traders (CAIT) not to feel intimated by big retail chains, and, instead, should learn to compete and work with them, signalling a shift in the party’s stand that has persistently opposed the entry of global supermarkets.

Modi’s comments were being seen as his endorsement of foreign direct investment in the country’s retail sector and his commitment to bring a common goods and services tax (GST), key economic reforms that the UPA government has been stating that Modi’s party has been scuttling as the main Opposition party.

The country is seeking answers about the state of the economy, but political parties, particularly the BJP, so far do not seem to be in the market for candour. This party, among all others, must know how much of the job is left undone. The people must be convinced about the need for firm action before the BJP can work on allies within the ruling coalition.