Reforms and the promise of Achche-din...

There is a discussion around the narrative that the Modi government has mismanaged the reforms that have struck the economic growth rate negatively when it was already in a recovery mode since there has been a heightened expectations that interest rate would go down more to aid the speed of growth from the past slowdown and rate hike cycle, however transition from a non-reform period to a reform period requires certain amount of adaptation, the economy adapts from one policy or set of rules to others which might also create uncertainty for a period because people take time to practice the new set of rules based on the information, both demonetization and GST were such kind of reforms, demonetization was also a reform, a reform to curb tax evasion and black money…

Therefore, these reforms were long pending only Modi government has brought them to the fore, they we needed… How would you tell people that black money is illegal and it is also a hit on the revenue, it is true that revenue deficit has lowered expectations from the government, tight fiscal deficit numbers might divulge in the case of lower private investment, nonetheless increasing productivity would help increase competitiveness and demand and growth… Spending on the skill development according to the industry demand is likely to create more employment since it would also increase demand for teachers and trainers…  The supply of labour must accommodate the demand of labour otherwise there would unemployment… More spending on education, skills and innovation would be anti-inflationary because production could increase despite of full-employment…

Onething the Modi government did from the onset was to infuse a sense of “Achche-din” in the minds of the people which has given rise to expectations of better days ahead which might give rise to spending in the expectations of better incomes in the future, even the economists try to paint a good picture of the future, ie good expectations about future to increase consumption and investment spending…