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From Fragile Five to Top Five : India with Modi

It is a good thing that Prime Minister Modi chose to remind people of this country that India was considered a part of the “Fragile Five” back in the year 2013. That is where 10 years of mindless governance, endless corruption and influence peddling had led the country. During the global boom of 2003-2007, India grew like gangbusters and the UPA and its cronies in ‘civil society’ gobbled up mountains of cash. After the crash of 2008, the skeletons started tumbling out of the closet one by one. Sadly, it came too late in the day to prevent the Congress from winning in 2009.

That is why UPA-II was a disaster right from the start. In 2014, they didn’t just lose. They collapsed. Good of Modi to remind the people of that.

While Modi pointed out that India is now the sixth largest economy in the world, he should have pointed out that those are 2017 numbers. As per IMF estimates, India’s GDP in 2017 was just a few billion $$$ short of the UK. There is no economist in the world who doubts that this tiny gap will be bridged in 2018 and India will officially become the world’s fifth largest economy.

From fragile five to top five, this has been India’s journey with Modi. Not under Modi, but with him.

I am no great fan of socialism. However, I am a huge fan of political survival. When Modi left Gujarat, he was faced with a larger nation that does not generally share the pro-business outlook of his home state. The Prime Minister understood this keenly, because of which the government promptly devoted itself to welfare schemes. For this, we must also thank the opposition for going too far with criticism too early in Modi’s term. As a result, the government never took its eye off the welfare wagon for even one second. The result is that Modi’s pro-poor image is one of the strongest ever.

The amazing thing is that welfare schemes have happened over the last four years without making hopeless compromises on the fiscal responsibility front. I know that Jaitley is not a favourite on the Hindu right, but he has to be lauded for this.

As such, the Modi sarkar scores massively on the welfare front, even more than the UPA. Not only has the BJP government been more generous with rolling out new welfare schemes, it has in fact improved delivery of the existing ones.

The remarkable thing is that several welfare schemes are aimed at nudging people towards a higher living standard rather than lifelong handouts. For example, the Saubhagya Yojana gives free electricity connections but not free electricity. The super successful Ujjwala Yojana, which now has 5 crore beneficiaries, provides free gas connections to BPL families. The administrative cost of Rs 1600 per connection is borne by the government but free LPG gas is not provided.

The Jan Dhan Yojana should be put in the same category, where no-frills bank accounts were opened for the poor. Modi sarkar did not provide free money, it provided financial inclusion. In the long run, that is more valuable. How do you go out and make your own money unless you are part of the system? The Jan Dhan Yojana was also seamlessly integrated with Direct Benefits Transfer (DBT) so that subsidies reached bank accounts directly, cutting out corrupt middlemen. Stopping the leakages has played a big role in India keeping its budget math right.

Then there is Mudra, which is arguably halfway between a welfare scheme and a stimulus package for small businesses. Since the scheme was launched, some 12 crore people have received small business loans, of which  70-80%  have been women. Turning 9 crore Indian women from poorer sections of society into wealth creators is a social churn that will yield dividends for generations to come.

Gender equality is arguably the most effective way of creating a prosperous society. Female participation in our workforce is around 27%, which is bad enough, not to mention that much of it is caught up in low skill, low wage work. Imagine the amount of economic productivity that is tied up with nearly half of the population left behind. Even a simple scheme such as Ujjwala, which frees up a woman from collecting firewood and enhances her health, is actually a big impetus for the economy. Underneath every social change lies a shift in the economy.

With respect to gender equality, there was also one big headline today in the PM’s speech.


This is what real empowerment looks like. The anti-national, far left crowd, working under the garb of feminism, seeks to weaponize women’s issues into a bludgeon to beat Hindu society with.

We are Hindus. In our culture, Shakti is the goddess who has ten hands, each with a different weapon. This is how we fight back.

The biggest announcement, of course, was Ayushman Bharat, now renamed as Pradhan Mantri Jan Aarogya Yojana. As a matter of realpolitik, it was good to put Pradhan Mantri right in the name of the scheme. The Prime Minister has created the largest healthcare scheme in the world and the scheme deserves to be branded as such.

Therefore, beginning Sept 25, the birth anniversary of Pt. Deen Dayal Upadhyay, as many as 10 crore families (i.e., some 50 crore people) will benefit from health insurance of Rs 5 lakh per year.


Like most other welfare schemes of Modi sarkar, this one is also a nudge towards the free market. Instead of putting the burden on a lumbering and wasteful state apparatus, the benefit is fully portable across the country and can be availed at any empanelled public/private hospital.

When money is attached to monopoly state providers, it puts the state in the position of power and puts the citizen at their mercy. What you get is unmotivated service providers who have no personal stake in doing a good job. Instead, the PM Jan Aarogya Yojana attaches the money to each citizen, giving him/her the choice to pick a service providing hospital. Suddenly, the incentive structure is turned on its head, with the hospitals having to compete in providing affordable health care to the citizens.

The patient is now king.

The big incentive here is for private hospitals to cut their costs so that they can serve the poor as well. Previously, private hospitals had no incentive to do so, since the poor, by definition, didn’t have money to spend. But now a poor patient has Rs 5 lakh to spend on health care per year and a private hospital can find ways to get some of that.

This is harnessing the ingenuity of the free market, this is kickstarting the virtuous cycle of capitalism to benefit all of humanity.

Finally, it was nice to hear this.


Thank you, Sir. We are all hoping to see you again at the Red Fort on Aug 15, 2019. A deep saffron turban, like today, would look best.

Ayodhra Ram Mandir special coverage by OpIndia

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Abhishek Banerjee
Abhishek Banerjeehttps://dynastycrooks.wordpress.com/
Abhishek Banerjee is a columnist and author.  

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