What Modi Must Do Now - Part 1

So now, Modi is finally there! And if I foresee it correctly – he being a man of action, ambition and humility – he would continue to be in power for at least for 10 years, and perhaps for 15 years! That means he has enough time to completely change India and its history. Since the list of must-dos for Modi is very long, I shall write them in two parts; with the first part being presented in my editorial this week, and the second part in the next week. I've written about these in the Alternative Budgets that I have presented in the preceding years, and they have only gained in importance with each passing year. So here are the first set of key points that Modi needs to work upon immediately.

Transform the judiciary

Modi's first priority in an environment of people being fed up with corruption is to transform the judiciary. The Jan Lokpal Bill was given its silent burial with a manipulative and flawed bill. As it is, even at its best, the Bill would not have been successful to remove corruption. The first priority for Modi thus has to be a critical focus on reforming the judiciary. It is shocking that the allocation for judiciary every year is less than 1% of the Central and State budgets. This, while new laws, increasing corruption, activism, and much more are leading to the number of cases in courts increasing tremendously, while the older cases continue to remain unresolved. As I often state, corruption can only be reduced by ensuring that the judiciary becomes more effective. If the corrupt are confident that they can delay their punishment indefinitely due to caseslanguishing in courts for years, then corruption will definitely keep increasing. We need to change this immediately. Corruption is a worldwide phenomena; but then, it affects lesser people in countries like America because the judicial system in these countries is functional. In America, for example, the number of judges per million people is ten times more than in India. Going by that benchmark, we would need about 100,000 additional judges. Even though this looks quite a large figure, this can be achieved in five years. Taking a ballpark figure of Rs.30,00,000 being the investment required to set up one additional judge and his office assistants, if we were to plan to have 20,000 additional judges per year, we would have to budget approximately Rs.6,000 crores per year.

So Modi must announce the allocation of Rs 6,000 crores for the judiciary in this coming fiscal, and should plan to allocate Rs 10,000 crores in the subsequent fiscal. Not only should the Law Ministry work hand in hand with the Supreme Court and High Court to finalise a plan for quadrupling the number of judges very soon, but a set of guidelines should also be drawn that could encourage litigants, lawyers and even judges to settle cases in a definite timeframe – something that has been practised very successfully in Income Tax scrutiny cases, where the decisions of Income Tax officers are time bound. These straightforward moves have the power of transforming governance. Think about it; if the corrupt start fearing quick judgements and as quick a confiscation of their properties and assets, the general tendency to veer towards corrupt practices will go down considerably. I believe this is far more practicable an approach and would work much better than an almost forgotten Lokpal Bill.

Focus on education and healthcare

Without investements in education and healthcare, our big hope of catching up with China will remain just a dream. Modi respects the Chinese model and has studied it. It is abhorring that public expenditure on health and education in India currently is less than 2% of GDP – subsidies and exemptions take up much more than that. Modi needs to ramp up allocation double quick in projects like Sarva Shiksha Abhiyaan and National Rural Health Mission. But this has to be matched with efforts to improve governance and reduce corruption. For a more detailed analysis, do read the Alternative Budget proposition that I had drawn up at the start of this decade ('A Budget for Three Idiots'; http://www.thesundayindian.com/article.php?category_id=28&article_id=637). Like I mentioned before, the recommendations I had made in that proposal then are even more relevant today.

Focus on employment generation schemes and slum removal schemes to give people dignified existence

Modi must increase the allocation for rural India, specifically farmers, by Rs.100,000 crore a year. The reason I mention such a huge figure is because rural India needs the creation of 150 million jobs for immediate improvements in economic and lifestyle indicators. As a committed government, we should take 5 years rather than 65 years as a deadline to achieve this. In other words, we have to create 30 million rural jobs per year. In rural India, a job can still be created by investing about Rs.33,750 per job. This would justify the need for additional investment of Rs.1,00,000 crore per year. Half of the money thus allocated should be invested in building or improving physical infrastructure in rural India (irrigation facilities, roads, cold storage facilities, electricity transmission and much more). The other half should be targeted towards improving rural social infrastructure (access to education, health and sanitation). Investments in physical infrastructure would dramatically improve rural India's productivity levels, and ergo would result in higher income levels for farmers. Social infrastructure investment would radically improve human development indicators in rural India. And of course, both such investments will create jobs and work towards removing the massive rural unemployment levels.

But having said that, one should not forget the urban unemployed. We need 25 million new jobs in urban India. The investment required to create one job in urban India is much higher than that required in rural India; and the same comes to approximately Rs.240,000 per urban job. Subsequently, to create 25 million jobs in the coming five years (at the rate of 5 million new urban jobs per year), Modi should allocate an additional Rs.120,000 crores for the urban unemployed. But as in the case of rural India, even the urban poor need dignity of existence, a roof to call their own, not slum dwellings which could be showcased by future movies akin to Slumdog Millionaire. For that, Modi would need to budget in another additional Rs.24,000 crore per year for the next five years in order to create 15 million urban flats (of minimum 250 square feet each).

This is thus the first set of things Modi must undertake to transform India forever. But as I said, the list doesn't end here – there's more to come in my upcoming editorial next week.