In the two years that have gone past, the Narendra Modi government has delivered a long list of reforms. Much to the surprise of the usual suspects in the commentariat, a big part of the focus has been on removing bottlenecks from critical points in the economy, especially in infrastructure. The other area has been what people call (condescendingly, I think), 'the social sector', but more on this later. These people have discovered that Modi's idea of what is wrong with the country and what has to be fixed urgently is very different from theirs.
Towards the end of 2014, just a few months after Narendra Modi became prime minister of India, we wrote a roundup of the reforms that were needed. At the time, we had noted that the list of reforms needed was 'frightening'. We had also noted that the list was practically the same that the UPA-2 government had faced during its tenure.
Most of us had the obvious pink-paper list of FDI in retail, GST, PSU divestment on our minds. What we have been shown is that this list suffers from a failure of imagination and an obsession with discrete events that are amenable to headlines. The passage of GST? It's a big event, which will get big headlines and big TV coverage. But what about the increase of highway construction rate from 2 km a day to 30 km a day? Or the increase in villages electrified from an average of about 200 per year to 7,000 per year? Or the fact that the dedicated railway freight corridor (talked about literally for decades) is on course for a 2019 completion.
These are boring background events, and people somehow think that they do not qualify as 'reforms'. And yet their impact will be out of all proportion to what their newsworthiness is perceived to be today. What has come as an extremely pleasant surprise is the urgency with which the Modi government has attacked infra problems. For my money, the three star performers of this cabinet are Nitin Gadkari (shipping, road transport and highways), Piyush Goyal (power, coal and renewable energy) and Suresh Prabhu (railways).
A few weeks ago, I had a chance to meet Nitin Gadkari at an event. I was amazed to find a man who believes with an almost religious fervour in the power of transport infrastructure to improve lives and create wealth. He is fond of quoting Henry Ford on this, "American roads are not good because America is rich, but America is rich because America has good roads." In the context of the ports and coastal infra push that Gadkari is managing, just one fact shows the scale of the task: The port of Colombo, Sri Lanka, can handle more container traffic than all Indian ports put together. Or that China's tenth largest port is 50 per cent larger than our largest.
The other aspect of Modi government's reform priorities has been the Jan Dhan Yojana and allied schemes to bring most of the population into the fold of the formal financial system. This, coupled with Aadhaar and the conversion of most subsidies to cash transfers, is the cornerstone of the future fiscal road map. The potential revolution in banking that has been unleashed with the new kinds of banks will completely transform how money flows.
The roadblocks for this program of real reforms are the obvious ones. A recalcitrant bureaucracy, an elite which does not like its privileges taken away and opposition parties - primarily, the Congress, which is trying to sabotage everything before the ground under its feet completely disappears.
How this struggle turns out will determine, to a large degree, how the country's economic future works out. Unlike times past, we have a basis for expecting that things that will really unshackle India's potential will continue to happen.
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