Reversal of falling growth by 50bps, good talks, but is it all...
By: Amit Bhushan Date: 10th Nov. 2015
The media is now busy discussing the fallout of the verdict in an electorally conscious state on the functioning of the national government. It has no comments to make on the reasons for such a result. This is even as some of the 'leaders' had spoken pointed comments on governance.
What's important to note is that we have had a lot of hype and noise around revival of fortunes, however that seems to have only about 0.5% growth impact on GDP, since it seems to have gone up from 6.9% (basis new methodology) to 7.4% (again basis new methodology).
It must however be admitted that some of the indicators like tax collections as well as automobile sales trajectory or air travel seem to be in a bit better in shape than the GDP number alone (probably pointing to what's in store, rather than just what on display window). Then we also have almost no 'new banks' (especially after issuance of new licenses) or fresh investments in say insurance or any significant job growth barring from e-commerce (which is again limited to cosmopolitan areas).
Nearly same is the fate for entertainment segment like FM, a slight improvement in tourism. There is no yardstick to assess improvement in education, government healthcare or government services; most of which anyways lie in the realm of state rather than centre. Given the news that government is focussed on getting clearances for projects out of its way to propel growth, one will assume that mining and roads alongwith some sundry projects may be improving and hence the result.
All in all much is left to perception rather than hard numbers and the perception is sought to be built by talk shows rather than institutionalized tracking of metrics.The manufacturing sector is slow to pick up steam though with exports shrinking, we still seem to be growing and that may be a compliment to the economy. Some may hear commitments to improve electronic assembly, however the results seem to be taking time to translate and occasional rumblings about new roadblock not cited earlier continue to rise on the alter.
While the government seems to be push infra spend, the noise about initiatives around its ability to reduce cost to public like swapping of coal to reduce transportation cost by power plants, or waterways transportation or availability of better irrigation and seeds for farmers, do not seem to be happening (despite a lot of noise on this count). While the government has been able to push states to compete on ease of business, however measures like simplifying taxes through GST which restrict/ hinder market access are still far off.
If such issues of unfettered market access is sorted out then the states will need to compete basis simplification of procedures and other incentives to seek investment and this may automatically sort out several issues such as archaic labour laws, land availability etc. We also have bank NPAs and policy/legal action required around it, in limbo for the lack of cooperation with the 'opposition'.The economic measures such as current account deficit, WPI based inflation, Fiscal deficit situation seem to be getting better.
However for these measure to convert to public benefit in the form of reduced interest rates or reduced household costs; we still have a lag. We have improved our ability to trade with Bangladesh (and we still do not know results of such efforts with other neighbour like Myanmar). The numerous foreign engagements is not planned to get a breakthrough trade & investment deals at least from media reports so any opportunity is more a fluke than design with a lot of hype about India setting the agenda or gaining tremendous mileage from such engagements.On the state front again, we have lot of efforts to make noise around issues that keep cropping up like jobs scam, unfairness in distribution of subsidies like ration, kerosene etc. or in managing utilities like power distribution as well as services like Primary health care or educational institutes.
We do not have any key metrics by government or NGOs on display by 'independent' news media and need to rely on perception created by selective information leakage. To be fair to leaders in government, it is not that the predecessors have a lot to talk about, other than being a mute participant in the international process although the same set of people seem to harping too much now. The government also seems to be making progress around ease of doing business front by lifting barricades created by babudom, though work around credit flows also need to be sorted. Lack of reliance on metrics often leads to distortion in perception and ability to communicate and this also seems in need to be corrected.
It is however the changed political environment and expectations that the leaders claim to have a handle upon, is coming to question and might be a key to future electoral decisions, and this is likely to as applicable for those governing as well as those trying to establish their superiority.
By: Amit Bhushan Date: 10th Nov. 2015
The media is now busy discussing the fallout of the verdict in an electorally conscious state on the functioning of the national government. It has no comments to make on the reasons for such a result. This is even as some of the 'leaders' had spoken pointed comments on governance.
What's important to note is that we have had a lot of hype and noise around revival of fortunes, however that seems to have only about 0.5% growth impact on GDP, since it seems to have gone up from 6.9% (basis new methodology) to 7.4% (again basis new methodology).
It must however be admitted that some of the indicators like tax collections as well as automobile sales trajectory or air travel seem to be in a bit better in shape than the GDP number alone (probably pointing to what's in store, rather than just what on display window). Then we also have almost no 'new banks' (especially after issuance of new licenses) or fresh investments in say insurance or any significant job growth barring from e-commerce (which is again limited to cosmopolitan areas).
Nearly same is the fate for entertainment segment like FM, a slight improvement in tourism. There is no yardstick to assess improvement in education, government healthcare or government services; most of which anyways lie in the realm of state rather than centre. Given the news that government is focussed on getting clearances for projects out of its way to propel growth, one will assume that mining and roads alongwith some sundry projects may be improving and hence the result.
All in all much is left to perception rather than hard numbers and the perception is sought to be built by talk shows rather than institutionalized tracking of metrics.The manufacturing sector is slow to pick up steam though with exports shrinking, we still seem to be growing and that may be a compliment to the economy. Some may hear commitments to improve electronic assembly, however the results seem to be taking time to translate and occasional rumblings about new roadblock not cited earlier continue to rise on the alter.
While the government seems to be push infra spend, the noise about initiatives around its ability to reduce cost to public like swapping of coal to reduce transportation cost by power plants, or waterways transportation or availability of better irrigation and seeds for farmers, do not seem to be happening (despite a lot of noise on this count). While the government has been able to push states to compete on ease of business, however measures like simplifying taxes through GST which restrict/ hinder market access are still far off.
If such issues of unfettered market access is sorted out then the states will need to compete basis simplification of procedures and other incentives to seek investment and this may automatically sort out several issues such as archaic labour laws, land availability etc. We also have bank NPAs and policy/legal action required around it, in limbo for the lack of cooperation with the 'opposition'.The economic measures such as current account deficit, WPI based inflation, Fiscal deficit situation seem to be getting better.
However for these measure to convert to public benefit in the form of reduced interest rates or reduced household costs; we still have a lag. We have improved our ability to trade with Bangladesh (and we still do not know results of such efforts with other neighbour like Myanmar). The numerous foreign engagements is not planned to get a breakthrough trade & investment deals at least from media reports so any opportunity is more a fluke than design with a lot of hype about India setting the agenda or gaining tremendous mileage from such engagements.On the state front again, we have lot of efforts to make noise around issues that keep cropping up like jobs scam, unfairness in distribution of subsidies like ration, kerosene etc. or in managing utilities like power distribution as well as services like Primary health care or educational institutes.
We do not have any key metrics by government or NGOs on display by 'independent' news media and need to rely on perception created by selective information leakage. To be fair to leaders in government, it is not that the predecessors have a lot to talk about, other than being a mute participant in the international process although the same set of people seem to harping too much now. The government also seems to be making progress around ease of doing business front by lifting barricades created by babudom, though work around credit flows also need to be sorted. Lack of reliance on metrics often leads to distortion in perception and ability to communicate and this also seems in need to be corrected.
It is however the changed political environment and expectations that the leaders claim to have a handle upon, is coming to question and might be a key to future electoral decisions, and this is likely to as applicable for those governing as well as those trying to establish their superiority.