This blog is not a political statement.
Wish people / society
moves from scarcity to abundance
In 2014 people voted Modi
with
: Lots of optimism
: Anticipated breakthrough
development
: Expectation of big bang
changes / reform in India
: Glorious future for
India
In Reality
: Modi win and government
failed
: Modi missed big bang reforms
: Modi failed short of people’s
expectation
: Modi didn’t do anything
wrong, but he didn’t do the right things
The term big bang reform /
major changes was very much popular at the time of 2014 election. Let’s
quantify in words what is mean by “big bang changes” / people expectations. Neither
people define nor Modi define it, let’s put in simple word as “Affordable Life”
What is “Affordable Life”
If a persons work
sincerely in a day, then he should have reasonably priced home, quality
education for children, convenient transportation, fair & transparent law
and order, quality food, reasonably
priced medical facility , savings for future etc
Lets see how Modi failed
short of people’s expectation
1) Smart City vs Rebranding / Renaming Exiting City
As Smart City
Initial plan was to build
“NEW” 100 smart city and not as seen today i.e. rebranding / renaming existing
city as smart city
Past : One state one city strategy
In last few years, I lived
at Pune, Mumbai, Bangalore & Hyderabad.
Apart from financial
capital Mumbai, lots of development happened in Pune in past few decades in
Maharashtra. In Karnataka you may not have heard any well-known city name apart
from Bangalore. Even though today we have two states, Telangana & Andhra Pradesh
as separate, still they have joint capital Hyderabad. Simply because prior to
division of state, only one city was developed i.e. Hyderabad
Result of this kind of strategy
Outcome of this kind of strategy
is people all across small city or village migrate /wish to live in metro city for
education / job / business. Off course this can be politically motivated,
people making policy say starting an education institute / software hub /
offering tax concession at industrial area, can buy land in designated zone
well in advance to have unfair benefits
How big can be unfair
benefit?
Lets make hypothetical
unrealistic projection
Pune’s population
increased from 15+ lakh in 1991 to present around 60 lakhs
Approx 45 lakhs addition
of people
Say 11.25 lakh units of
residential house / flats (assuming hum do hamare do, nuclear family structure)
Let’s make more
assumptions. Had development had not happened property rates would have been
lower say construction cost 1700 per square foot + land cost 1000 per square
foot.
Present average property
purchase rate say 6500 per square foot.
Average house / flats size
say 700 square foot
Unfair benefit per unit
700*(6500-2700) = 26.60 lakhs
For 11.25 lakhs units
amount will be 26.60 lakhs *11.25 lakh = 299250,00,00,000 i.e. approx 3 lakh
crore per city.
There numbers are
hypothetical unrealistic and can be debatable.
Whatever may be real
number, question is why people should spend large part of their active working
life, to have “Makan”
Rather than investing in
“Makan”, can investment be routed to productive assets for well being people as
well as country?
How new smart city could have been benefited
Residential: lower real
estate cost i.e. better life
People spend less time of
active working life in job / business, i.e. spend more time with children,
spouse, parents, and also spent time on personal interest / development /
entertainment
Commercial: lower cost
i.e. eases of doing business
Not every person is interested
working in industrial / software park. Lots of people want to do business on
their own. Today in big city rental cost of shop /office for business are too
high.. I have seen people paying 20,000 to 50,000 per month i.e. paying 2 lakhs
to 6 lakhs as yearly rental in good locality. High rental is big barrier for
doing business. Though people have interest to do business, they can’t afford
rental cost.
People can buy properly to
do business rather paying rental
Say 300 sq feet shop area
can be available at low prices, say a rate of 4000 per square i.e. 12 lakh per business shop. People can afford
to buy shop and do business rather paying for rental.
Lower cost of products
and services
In mall or QSR prices are
inclusive of rental cost. If rental cost can be brought down, cost of products and
services will be lower.
More prime market space
to do business / large people engagement
Some part of city is well
known for shopping. Space limitation is there for new businessman to enter in
this market. If we can have say 5 to 7 new smart city per state can lead to
more prime market space available to do business.
Inclusive growth
More people can be
financially engaged
New investment cycle
& growth
Development of new city
can lead to investment cycle
2) Complex Laws vs Simple Fair and Transparent Laws
Recently Modi made
statement that government has scrapped more than 1,200 redundant laws. How many
of us aware of name / contents of these 1200 laws?
Reality is laws which are
used in day to day business are highly complex / bureaucratic. They should be simplified
and made fair and transparent.
Other recent news says The
Directorate General of Foreign Trade (DGFT) has issued notices to about 100
Indian units of multinationals, demanding refund of around ?5,000 crore that it
said they wrongly claimed since 2003 under an export promotion scheme for
services
These companies are not
sham company or doing business with black money. It just those laws are complex and
interpreted differently by company as compare with DGFT.
In year 2017 government is
going back to accounts of 2003
Every few months I saw
some business news arising out of complex laws
During negotiation at the
time of Jewellers strike in 2016, news appeared that jwellers are ready to pay
tax but they do not want central excise officers to visit their premises.
How much comfort does corporate
or people have while interacting with government agencies?
Demonetization
Let’s talk about
demonetization as it has got a very clear message from people
In 2008 world faced financial
crisis, but Indian economy was resilient. It is said that India has parallel
black economy so world crisis had not affected India in great way.
On 08nov2016, Modi launch
surgical strike on black money and
corruption via demonetization.
Black money
Black money term is used
for people as well as government..
a) People stand with
patience in queue for long hours to get notes deposited / exchanged.
Why
Poople have respect for
Modi, so they did not complain about it
b) 15lakh crore + money /
old notes were in circulation at that time. Almost all money / old notes found
to be deposited in bank / exchange with new notes. Why almost all black money
find way to bank?
People hate bureaucracy /
complex income tax law / office. People converted almost all black money. As
laws are complex, people find smart / intelligent ways to convert money.
Simple message people
respect Modi but hate government / bureaucracy. Wish government respect people
and simplify laws.
Earlier Modi launched “swachh
bharat abhiyan” with broom in hand. Later he comes to know unless people
participate in it, it can’t be successful. If people have more respect for
local government body in their area, they will keep city clean. People respect
foreign, so when Indian goes foreign they don’t litter there
If government respects
people by making simple fair and transparent laws as well as interaction with government
agencies, people will follow it.
Corruption
Corruption term is mostly
used / associated with government or government agencies. Corruption is not
required when in ordinary course of life people buy / sell goods / services
Government made telecom and coal auction online i.e. corruption free /transparent manner. Does all transaction at / interaction with government agencies is corruption free?
3) Make In India By Foreign Investment vs Make In
India With Indian money
Modi went all around world
for MakeInIndia with foreign investment. Not sure how much is delivered.
Modi ignored /
underestimated power of money that Indian people have / can invest. Modi can
get dramatic results, if he can crate investment opportunity for Indian people
to invest in Indian projects
4) Less Work More Credit
GST was initiated by congress;
BJP opposed it when it was in opposition.
Now Modi claims credit for
it
May be at some point of
time the black economy will be converted into white
i.e. unaccounted trade
will be accounted trade
i.e. business will remain
same (black + white) but accounted business (white) will increase.
Increase in white trade
will increase in GDP
& Modi will claim
credit for it.
To sum up
Modi has chosen technique
which will take long period of time for success of India. It may take a decade
or more for glorious golden future for India rather than five year election
term.
Wish people / society
moves from scarcity to abundance
Usually I don’t write blog
on criticism. But, recently I have written few blogs with criticism. Hope I am
back on constructive side to create something beautiful
Also read my 2014 blog :)
https://atulgandhicom.blogspot.in/2014/05/india-aspires-for-glorious-golden.html
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