PM Narendra Modi's economic vision gains pro-poor nuance

Speaking at The Economic Times Global Business Summit last Friday, Prime Minister Narendra Modi outlined an economic philosophy in which the government empowers the people to use their own native intelligence, creativity and entrepreneurship to create jobs and incomes, and pull themselves out of poverty and into prosperity.

In this vision, the government is the enabler and the people themselves the change agents. The shift in emphasis from the philosophy of the previous UPA regime is unmistakable. The UPA presented itself as the provider, and not just the enabler.

This view outlined by the PM is fully shared by his ministerial colleagues who spoke at the summit — all five of them articulated the same vision.
Yes, the PM had unveiled his economic vision at the GBS last year, where he announced his ambition to see India grow into a $20-trillion economy. Yet, there is a shift in nuance.

While the government is primarily the enabler, it will continue to play caregiver for the poor and the disempowered. Subsidies will continue, but will be better targeted.

The Aadhaar project initiated by the previous government will help uniquely tag bank accounts of the deserving poor, to which the subsidy would be transferred, protecting against leakage and, further, allowing a competitive market to function for the products whose prices were earlier distorted by subsidy and have now been freed up.

Ever the politician, the PM used his speech to signal his pro-poor bias, by putting subsidy on par with outlays or tax breaks for industry, and ribbing the assembled industrialists and policy wonks on the elitist bias inherent in calling what the poor and the farmers receive as subsidy while terming concessions to industry as incentives.

All this is welcome. Equally welcome is another feature of the prime minister’s vision: India’s growing and benign influence on the world economy. It is not just that India’s sustained high growth in a stagnant globe will help all other economies, but also that Indian initiatives like the will make a qualitative change to the quality of life around the world.