The world has changed. I think the economy today determines the clout of a nation, and different countries in the world are today competing with each other to better their economic prospects, economic future and that will be the defining yardstick by which one will see the success or failures of states or countries and governments that run these countries.
Of course, all the statistics are very well known to all the participants of the Elara Conference on reforming India — growth statistics, the quality of growth statistics.
There has been a raging debate whether the UPA growth numbers, albeit little higher side in some of the years, were better than the growth that the NDA has presented before the nation. To my mind, there is hardly any debate about that and I am one who has been studying the growth model of different countries for several years now. Very clearly, a growth which is on the back of extremely high fiscal deficit and on the back of indiscriminate lending, creating capacities which more often than not never had the demand in the first place certainly do not augur well for a long-term, sustainable growth model.
I personally believe that there has been a focused effort to improve almost all the microeconomic fundamentals of the Indian economy that Prime Minister Narendra Modi and our team has been working on for the last four years. The fact that on every parameter, be it fiscal deficit, be it the current account deficit, be it revenue deficit, be it our inflation numbers, be it the fact that over the four-year period interest rates have been down, a short-term uptick in the last two quarters. The jury is out whether it was really called for on a short-term number, or one should have waited to see what the sustainable inflation number would have been. The fact that foreign exchange reserves have been very robust, the fact that the rupee — and this may surprise some of you who believe that the rupee has depreciated in the last three months very rapidly — but I believe the rupee has probably been the most stable in this four years of the Modi government — may not be in terms of the timing, but clearly from the fact that during these five years, from 2013 to 2018, you actually saw almost no depreciation of the rupee.
As many of you will recall, in 2013, the rupee-dollar rate was at about 68.8 or thereabouts. In September-October, 2013, the Reserve Bank of India gave an exchange swap and raised some $32-34 billion, which cooled the tempers on the rupee depreciation. The rupee, in fact, depreciated to almost Rs 59-60 to a dollar soon thereafter. And, therefore, if one juxtaposes the 2013 rate with today’s rate, considering the fact that this government has repaid that entire $34 billion, along with interest and the committed exchange rate. We have repaid all of that and after repaying that we are still about a $100 billion higher than the foreign exchange reserves that we had in 2014.
I believe the rupee really has depreciated in that sense only a couple of rupees to a dollar, if you look at the 5-year long haul. And that’s been something which I have been often articulating that the Indian rupee, by and large, has always been a far more steady currency than any other currency in the long run. And sadly, we have these ebbs and sudden falls and sudden increases in the rupee-dollar rate, but if a little more orderly long-term view is taken I don’t think the Indian rupee has depreciated any more than about 3 per cent — 3.15 per cent in the long run over any long stretch of time that one could calculate.
But let me give you a couple of insights into the thinking of this government, which will help you realise what we stand for and why this government is different from governments in the past. Reform for us is not only privatisation, reform for us is not only opening up FDI to every sector, reform for us is not only what the pink papers believe is reform — for us, reform is what impacts 1.25 billion Indians and has an impact on the life of the poorest of the poor, the man at the bottom of the pyramid.
So very early on, when this government came in, the Prime Minister took up the task to get financial inclusion to every citizen of this country, very well realising that that is going to be the framework on which we can do many other programmes, many other improvements in the life of the poor, particularly, in rural India. And, for that matter, it’s not only about rural India. Many of you will be surprised, in the capital city of Delhi, when we opened up the Jan Dhan accounts we found 25 lakh (2.5 million) families, which didn’t have a bank account, in the capital city of Delhi.
So, opening 320 million Jan Dhan accounts or zero-balance accounts, one of the first projects that this government took up was very critical from the point of view of the many other projects that this government has taken up in the last four years. Electricity — can you imagine 300 million people, so many children, not having an electric connection in their homes, 65 years after independence?
This government took up a systematic approach to first take electricity to every village, then to every hamlet or every small adjunct to the villages and now we are currently in the process of taking electricity to every single willing consumer across the length and breadth of India, such that in the next few months you will have every home in this country getting the benefit of electricity.
And, of course, the quality of electricity, for those of you who are not from Mumbai, because Mumbai always had good quality electricity, but if any of you has lived in Delhi, has lived in other parts of the country — other than Gujarat maybe — you will appreciate that the quality of electricity supply, the pricing of electricity, the fact that we now have a national grid across the length and breadth of India, so the price of electricity on the grid, on the national exchange is broadly evening out and you can get electricity in any part of the country through the exchange, at a reasonable price right round the year.
All of these things are very basic and elementary changes in the lives of the people of India.
Edited excerpts from Railway Minister Piyush Goyal’s speech on Reforming India, 3 September in New Delhi