One word that stands out in decisions by Narendra Modi’s cabinet
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What has been the most common theme in Narendra Modi’s cabinet’s decisions? It is “development”. The answer is based on a word-cloud analysis of decisions taken by the union cabinet between May 2014 and December 2016. The complete list of cabinet decisions for this period has been uploaded on 31 December 2016 by the Press Information Bureau .
“Development” is the most prominent word in cabinet decisions in each of the three financial years since 2014-15. Cabinet decisions till December 2016 have been considered for the ongoing financial year.
The exercise excluded commonly used words such as cabinet, prime minister, crore and similar phrases. The more a word figures in cabinet decisions, the more prominently it appears in the cloud.
There are some interesting highlights. Gorakhpur, a district in Uttar Pradesh, figured as often as Mumbai in the current financial year’s cabinet decisions. Delhi appeared fewer times. This was on account of moves to revive the town’s fertiliser units. Cabinet also approved the establishment of a new All India Institutes of Medical Sciences at Gorakhpur.
Certain key words appear only in certain years. Solar features prominently in the first year, but is absent in the second and the third year. Swachh, as in the Swachh Bharat Abhiyaan, appears prominently in the first year, but disappears afterwards.
Some words (like railways) are commonly found throughout. The word digital appears prominently in the first year. It is not as prominent in cabinet decisions in subsequent years, though there was a thrust on digital payments during demonetisation.
Have these decisions and the government’s emphasis on development translated into lesser policy uncertainty?
We try to address this question by looking at Economic Policy Uncertainty Index which is based on a model by Scott Baker, Steven J. Davis and Nicholas J. Bloom, economists at Stanford University, Chicago Booth School of Business and Kellogg School of Management.
The values measure the policy uncertainty in a country based on mentions of the issue in media reports on a monthly basis.
Similar indices are maintained for countries like China, Brazil, Russia and the United States of America. There is also an index of global uncertainty.
The accompanying chart compares the index in the first 33 months of Manmohan Singh’s two terms to Modi government’s 33 months.
The three-month moving average for the Indian index shows a 40.81% decline in the first 33 months of Manmohan Singh’s first term. The Global Economic Policy Uncertainty Index with PPP-adjusted GDP Weights shows a 28.13% decline in global uncertainty during the same period.
The second term shows a sharp rise as the scam-hit government battled with policy paralysis. Nevertheless India’s policy uncertainty index was up only 63.38% in this time. The global index values showed a 73.25% rise in uncertainty during the first 33 months of Singh’s second tenure.
Modi’s track-record falls between the two UPA governments. Policy uncertainty has not fallen, but the increase is less than it was in Singh’s second term. It has so far increased by 6.57% in the first 33 months. However, the government has done much better than the rest of the world. The global uncertainty index was up 184.41% between May 2014 and January 2017.
Much of the global rise can be attributed to policy uncertainty in the United States of America following the election of Donald Trump as President. India looks significantly better in comparison.
This may also mean that Modi would perhaps be judged on how much he does for reducing local policy uncertainty than on merely doing better than the rest of the world.