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Explained: Why PM Narendra Modi batted for India’s wealth creators

The latest thrust of PM Narendra Modi’s Independence speech suggests that he wants India’s businesses to lead the way and he has promised to back them in terms of clarity and stability in policymaking.

Written by Udit Misra , Edited by Explained Desk | New Delhi |
Updated: August 16, 2019 7:26:26 am
modi, independence day Prime Minister Narendra Modi said, “If no wealth is created, no wealth can be distributed.”

Prime Minister Narendra Modi used his latest Independence Day speech — the sixth in succession — to create awareness about how India can become more prosperous and achieve the lofty goals — such as doubling of farmers’ income, every household having a proper house, breaking down the digital divide etc.— that it has set for itself . In doing so, the PM stressed on the need to rectify how Indians viewed the “wealth creators” in the country.

“Those who create wealth for the country, those who contribute in the country’s wealth creation — they all are serving the nation as well,” he said. “We should not look at wealth creators with apprehension and doubt their intentions; we should not look down upon them.” The PM said there is a need in the country today to give such wealth creators due respect and credit. He then explained why he wanted the countrymen to bring about a change in their outlook towards those who “create wealth”. “If no wealth is created, no wealth can be distributed,” he said.

The PM’s message stands out for at least two reasons.

One, it is a clear departure from his defensive approach to the issue of backing the “wealth creators” during his first term. While he started his first term with a keen desire to bring about long-pending structural reforms in the use of land and labour — for example, he repeatedly brought ordinances to make the acquisition of land easier and cheaper for businesses — yet when his moves were resisted especially because of a lack of majority in the Rajya Sabha, he backed down. In particular, a jibe by Congress leader Rahul Gandhi — that Modi’s government was a “suit-boot ki sarkar” (a government that only looks after the rich) — appeared to have done considerable damage to PM Modi’s desire to push ahead with economic reforms.

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For the PM to bat for the “wealth creators” and urge the country to alter the way it views its businessmen — both big and small — possibly shows his commitment to back private enterprise in the country.

Secondly, the PM’s message also comes at a time when the Indian economy is fast losing its growth momentum. There are fears that India may barely clock a growth of 6 per cent — a far cry from expectations of a 7.5 per cent growth just six months ago. What is worse, from a government perspective, is that the government finances are already stretched. Thanks to a slowing economy, its revenue collections are way behind the Budget targets and this limits its ability to ramp up expenditure and push growth.

Independence Day photos: Prime Minister Narendra Modi addresses nation from Red Fort

The other key driver of growth — exports to the world — is also sputtering because global growth itself is floundering with trade tensions and geopolitical uncertainties.

Under the circumstances, the latest thrust of PM Modi’s speech suggests that he wants India’s businesses to lead the way and he has promised to back them in terms of clarity and stability in policymaking. But he also wants the country to understand why he is backing the businesses so that he does not come under political pressure like he did the last time around.

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