Modi 2.0 manifesto and its impact on India's global competitiveness

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Govt's push for roads, railways, airways, ports and waterways infrastructure is expected to accelerate. Bharatmala phase 1 is planned for completion by 2022, as are ongoing DFC rail-freight projects. Ongoing digitisation, electrification, doubling, track maintenance, high-power locos, signalling, etc will lead to higher railway efficiency. Ongoing modernisation of ports, including dredging, should improve liner connectivity and seaport operational efficiency. Govt is committed to providing safe, piped drinking water to all households by 2024, though this looks highly ambitious. Govt will invest heavily to improve farm productivity, increase value added, reduce food waste and double farmers incomes. Manifesto also mentions primary health centres, waste collection & processing, water recycling, air pollution, fuel import substitution, social security, economic reforms and ease of doing business.

Other sectors that deserve attention are:
1. State law and order and judicial reforms
2. Quality of education and skills training
3. Jobs creation by MSME and start-up support and higher public R & D
4. Commerce: foreign trade, internal competition and seamless movement of goods
5. Adoption of technology
6. Public sector enterprises

Improvements in weak areas on Global Competitive Index
Institutions
1.01)  Organised crime: Encounters & crackdown on mafia bosses in some states (eg UP).
1.03)  Terrorism: Proactive elimination of terrorists. Crackdown on terror finance and their promoters. Big reduction in terrorist incidents outside J&K, though Naxalite and NE terrorists remain active.
1.05)  Social Capital: Equal treatment for social schemes under slogan Subka saakh, Subka vikas. Schemes for universal provision that are designed for excellent last-mile delivery, backed with Aadhaar tracking & population surveys. Strict action including deportation of illegal immigrants planned. Very few incidents of communal violence, though underlying problems (eg. law & order) must be tackled.
1.14)  Corruption by black money generation: Aadhaar, Jan Dhan bank a/c, Rupay card, DBT. Digital record of govt services (at Point of Sale) or asset creation. Explosive increase in digital payments, UPI protocol, anti-cash regulations, lower or free digital payments, digital shopping portals. 
1.14)  Corruption by unaccounted assets: Better scrutiny of unaccounted incomes and wealth (eg GST, income matching with GST, data mining and analytics, shell companies, Benami properties, RERA). Anti-bank fraud measures. Foreign assets disclosure and transfer pricing investigations.
1.14)  Corruption by govt officials: Online govt contracting, reduced discretion and time-bound decision-making, reduced number of applications & processes under EODB, non-lapsing permits, computer selection of cases for scrutiny, minimised contact with officials, randomised selection of case officers, govt recruitment without interviews, automation to reduce interaction with officials or police (eg. checkpoints, eway bills, e-tolls), simpler non-human means for initiating receipts and payments (eg. tax refunds), etc.
1.17)  Land administration: Digital records of all land holdings, projected by 2022, will improve land administration (eg. land transfers).

Infrastructure
2.01)  Road Connectivity: Massive road building program for better & fast connectivity, incl. greenfield expressways, ring roads, lane expansions, new highway and freight corridors, feeder routes, rural roads.
2.02)  Road Quality: Higher capacity roads (eg 4-lanes), better interchanges, flyovers & bridges, roadside amenities, better water endurance and in-built maintenance. Safety of roads will be improved, eg elimination of accident hot-spots & level crossings, crash barriers, freight-specific roads connecting ports, tunnels through mountainous passes.
2.09)  Electrification: Electrical connections to all households almost completed.
2.10)  AT & C power losses: Prepayment meters for all small units, smart metering, underground wiring, improved power infra and discom reforms for efficiency.
2.11)  Abundance of safe water: Waste processing of solid and liquid waste. Clean rivers. Completion of safe drinking water projects.
2.12)  Reliable supply of water: Piped drinking water to most / all households. Water storage, water conservation, river linking projects and desalination plants.

Telecommunications  
3-all)  Surge in uptake and heavy usage of mobile voice and data communications is seen from 2017, due to 4G and cut-throat competition. Quality issues and lack of cellular infra in some locations are a hindrance. BharatNet is building nationwide fibre-network and will add speed, reach & capacity for broadband connectivity to all GPs. In last 2 years, fibre-enabled Wifi have been activated in 125,000 or 50% of GPs. Telcos are preparing for 5G launch and Govt is ready with 5G spectrum auction. 
3.01)  Cellular coverage: 40,000 unconnected villages will be given mobile connectivity.
3.02)  Mobile broadband: BSNL is adding to fast broadband. With 10% of total subscriptions, it now has 4G spectrum and 4G will be rolled-out nationwide, wherever cellular infra supports it.
3.04)  Fibre internet: BharatNet will give direct fibre connections to govt units, and enable private sector to provide last-mile connectivity. Jio is expected to heavily promote direct to home fibre connections.
3.05)  Internet access: Very cheap data rates are leading to a huge expansion in internet access via smartphones. Common service centres (CSC) are open in every GP, will give internet access to public.

Health
5-all) State funded health: Free tertiary healthcare has started for lowest 40% income households. Scheme to be extended to lower middle-class, covering 70% of total population. 150,000 local health centres to be opened by 2022 for providing wide-ranging primary healthcare, free or at minimal cost.

Labour markets
8-all) Codification of labour laws will improve ease of dealing with labour issues and disputes
8.01) Redundancy costs: Greater flexibility for hiring-firing is planned but as yet speculative.
8.04) Inflexible wage rates: Greater flexibility for wages is planned but as yet speculative.
8.06) Workers rights: Improvement of workers rights planned (eg minimum wages for unorganised sector).
8.12) Social security wages: Not sure but govt is subsidising pensions for unorganised sector eg farmers, shopkeeper, home workers.

Financial system
9.01) Private sector credit: Govt has launched discounted loan schemes with easy loans for GST registered MSMEs. Export credit to be enhanced. Regime of lower real interest rates.
9.06) Strong banks: Govt will infuse Rs 2.11 lakh cr into PSBs under bank recapitalisation plan.
9.07) Nonperforming loans: Disclosure and provisioning requirements for banks under RBI. Anti-bank fraud measures (seizure of assets of wilful defaulters, stopping accused leaving country to avoid investigations, insolvency legislation) and general anti-corruption measures. PSU bank mergers and privatisation will create more competent lending units.
9.09) Regulatory capital ratios: Already announced tightening of regulatory capital-ratio norms.

Business dynamism
10-all) Ease of doing business has seen results, particularly in resolving insolvencies. Reduced cost of starting business is happening.
June 7th, 2019