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Governance has largely been on track (One Year of Modi Government)
By
By Anuj Puri
As the Prime Minister Narendra Modi government enters its second year
in office on Tuesday, there is no dearth of bouquets and brickbats for
the "NaMo" regime in the media. On analysing the government's electoral
assurances, the actions taken so far and the respective timelines being
followed to achieve these, one would say it is reasonably on track in
fulfilling its short-term, medium-term and long-term promises.
Importantly,
the continuation of the previous government's policies like Land
Acquisition and Rehabilitation and Resettlement (LARR) Bill, and Real
Estate (Regulation and Development) Bill will have significant impact on
the realty industry once these are passed by the parliament. India's
historically opaque real estate sector will move towards more
transparency with the introduction and implementation of these key
policies.
It is worthwhile to reflect on the grassroots-level transformation we can expect to see:
-
Millions of home buyers in towns and cities and farmers across the
country (the latter being landowners affected by infrastructure
projects) are empowered with the clauses in the real estate regulatory
bill and LARR
- Investment opportunities in office spaces open up for small retail investors thanks to real estate investment trusts (REITs)
- The quality of life of millions of Indian citizens is upgraded when the proposed 100 smart and sustainable cities come to life
- Benami, or fictitious, transactions, which have for the longest time been a bane of the real estate sector, are eliminated.
Let
us take a look at the progress on some of the promises Narendra Modi's
party made in its electoral manifesto. Specifically, we will isolate
promises which have direct bearing on enhanced governance and reinforced
democratic fundamentals, which are important for India's development
and future-readiness:
The promises that are on track:
- Transparency: Re-auctioning of coal blocks earned the government huge revenues
-
Efficiency: Real-time effort towards rendering the existing
institutional frameworks more efficient; a good example being the change
in Food Corporation of India's food procurement and storage mechanisms.
-
Productivity And Accountability: Prime Minister Modi has been directly
involved in monitoring and raising the productivity as well as
efficiency of his ministry officials. He is clearly bucking a chronic
trend of bureaucratic unavailability and aiming to increase public
access to government officials.
- Black Money: The bill to curb
black money has given a moratorium period to bring back unaccounted
money into the system by paying normal tax. The ongoing dialogue with
the Swiss financial authorities to disclose secret accounts of Indians
abroad is reaping results.
- Corruption: Wired (online)
transactions are now being encouraged for property transactions. This is
a major step forward for curtailing black money in the sector.
-
Investor Confidence: Market confidence has improved with the
strengthening of the Indian equity, debt, currency markets and equal tax
regime that was promised to both domestic as well as international
investment companies.
- Positioning India: Via a series of
international tours, the prime minister is helping India rid itself of
its anti-investor image and is opening up new avenues of foreign
business in India, especially under the Make in India campaign.
-
Decentralisation And Cooperative Governance: Gradual increase in the
financial autonomy of states, farmers have real-time information on
minimum support price through digital channels and drastic price
movements have been largely under control. A focus on citizen outreach
programmes as well as leveraging social media have bought the people
closer to the governance process.
Promises that may see progress soon:
- States with similar problems will be able to form councils under NITI Aayog to discuss common concerns
- NITI Aayog, along with other national agencies, will help individual states in mobilisation of resources.
Promises that saw little or no progress:
- Relaxing clauses in the LARR Bill, REITs and foreign direct investment (FDI) policies that investors find difficult to follow
- Increased credit facilitation to start-ups
- Initiation of employment exchange programmes with other countries
- Obsolete laws to be scrapped or modified
-
Online dissemination of court cases for better monitoring and creation
of specialised courts to fast-track delivery of justice.
In
short, the Modi government has a fairly balanced list of hits and misses
so far. The trend does seem to lean more towards action than inaction.
It definitely seems that the prime minister has every intention of
living up to the larger part of his electoral promises in the future.
One
agrees with Reserve Bank of India (RBI) Governor Raghuram Rajan when he
says that the expectations from the new government when it came to
power last year were "probably unrealistic". But it has, in fact, taken
steps to create an environment for investment and is sensitive to
concerns of investors.
(Anuj Puri is chairman and country head at
the India arm of JLL, a global real estate services and investment
management consultancy listed on the New York Stock Exchange -
@JLLIndia_Realty. The views expressed are personal)