A crisis tests the top leadership of a country in more ways than one. First, when a crisis arrives, immediate response is crucial. The early detection of the COVID-19 threat as well as an alert, decisive response to it by Prime Minister Narendra Modi have helped India slow the spread of a virus and also set India apart from many other countries. By now, the prime minister’s record as an early mover who saved the country from significant damage has been appreciated nationally and internationally.
It is said that the true character of people comes out during adversity. It is similar for leadership. Providing leadership in times of normalcy may not be a challenge but it is difficulty that differentiates the best and the rest. Worldwide, the COVID-19 pandemic has been a test of leadership. In this test, India and Prime Minister Narendra Modi have set an example.
India, with Prime Minister Narendra Modi at the helm, is not only putting up a spirited fight against the virus but is also looking beyond the crisis into a post-COVID world, and preparing itself meticulously for it, to put its best foot forward.
The clarion call of self reliance or ‘Aatma Nirbhar Bharat’, followed by a series of historic steps taken over a period of five days, will be remembered by history as a turning point in India’s history. The inspiring message of not being overwhelmed by the crisis at hand but to be prepared to play a bigger role in the imminent restructuring of global supply chains has lifted every Indian’s spirit.
Almost every sector that is critical to India’s growth story in the future has seen deep reform under Prime Minister Narendra Modi.
For the poor, street-vendors and migrant labourers, the drivers of India’s growth, a number of measures have been announced. From One Nation One Ration Card to free food grains to all migrants, from interest subvention for MUDRA beneficiaries of the smallest loan size to facilitation of initial working capital for street-vendors, from a boost to MGNREGA allocations to empowering the health and wellness centres, the economic package has laid an emphasis upon strengthening those who are most seriously hit by the economic consequences of COVID-19.
Micro, Small and Medium Enterprises or the MSME sector is one of the growth engines of India, especially important due to the employment intensive nature of the sector. The Rs 3 lakh crore credit guarantee to MSMEs at concessional interest rates, to be given automatically without any collateral comes as a booster dose to MSMEs. The radical expansion in the definition of MSMEs ensures that such companies do not feel disincentivised to grow for the fear of losing MSME-specific benefits. The message to MSMEs is – think big, grow bigger.
Many agriculture experts have seen the recent agriculture reform measures as akin to the moment of freedom. A peculiarity of the existing agriculture marketing model was that both consumers and farmers got a raw deal while middlemen walked their way to the banks. With the changes to Essential Commodities Act, freedom to farmers to sell their produce to whoever they want, Rs 1 lakh crore investment into farm-gate infrastructure and a push towards bringing farming and industry together, agriculture has been truly made pro-farmer.
Remember that the above two sectors – agriculture and MSME – are the two largest employers in India. Sweeping reforms in these two bode well for India.
On the other hand, universally lauded reforms in key sectors such as coal, mining, defence, aviation and space have shown the reformist bent of the government. Combine this with the massive liquidity measures taken by the RBI earlier this year and a massive Rs 20 lakh crore economic package has taken shape as the vehicle for India’s post-COVID growth.
Despite such an impressive line-up of steps, there are a few naysayers, some from the commentator class and some others from political parties opposed to Prime Minister Narendra Modi.
First of all, they claim that the government has not put money in the people’s hands. Perhaps these people are a little short on memory. The earliest relief package announced by the government was the Rs 1.7 lakh crore worth Pradhan Mantri Garib Kalyan Package for the poor. Unlike the UPA era, it has not just remained an announcement. Already, over 39 crore beneficiaries have received financial assistance worth almost Rs 35,000 crores. This includes over 8 crore farmers who received Rs 2,000 in their accounts and over 20 crore Jan Dhan account-holding women who received the first and second instalments of assistance. Under PM Garib Kalyan Ann Yojana 80 crore poor people are covered under NFSA, given 5 kg food grain per person and 1 kg pulses per family. These are reaching people directly without any leakages.
It is also a matter of taking the right decisions in the right way. Everyone remembers the so-called ‘loan waiver’ of the UPA which did not reach the farmers in any significant way but also ended up destroying the economy. Whereas here, the Modi government is reaching people as well as taking calibrated measures.
Among the most important steps of the government is the raising of the borrowing limit of states raised from 3% of Gross State Domestic Product to 5%. This ensures an extra Rs 4 lakh crore for the states.
Yet, there are some commentators who calling this anti-federal spirit because the government has linked this extra 1.5% (extra 0.5% is automatic) to the states carrying out reforms. We must remember that states were already entitled to 3% of their GSDP and the government has actually increased their borrowing limit, based on these reforms. This is incentivising reform in the true spirit of federalism.
Also, many of these reforms – power reforms, ease of doing business, urban local body reforms, etc, have been universally called for by the same commentators who are now criticising this move.
True leadership is about inspiring and incentivising institutional reform. Transformative leadership is one which not only grapples with the immediate challenge but also prepares the country to emerge stronger than before. History has shown that world order has transformed after such global crisis. India is fortunate to have Prime Minister Modi leading her at this point of time. As the actions over the past week have demonstrated, he fully understand the opportunity.
The author is Union Minister of Environment, Forest and Climate Change, Information and Broadcasting; and Heavy Industries and Public Enterprises