The National Democratic Alliance (NDA), led by Prime Minister Narendra Modi, inherited a stagnant Indian economy wracked by high inflation, low growth, and static investment. Worse, a dark pall of corruption charges hung over the economy and its myriad institutions. When it assumed power in May 2014, the task seemed clear and the government seemed to have a well-defined idea of what needed to be done.
It has been four years since the Modi government assumed office and it’s time to look at the scoreboard. Modi infused a moribund administration with the requisite energy and much has been achieved, both good and bad, over the past 48 months: brisk diplomacy, an improved economy, introduction of the goods and services tax, demonetisation-led disruption, a real estate regulatory framework, a bankruptcy code, plus a surfeit of Central schemes to improve incomes and the standard of living. The regime was also blessed with low oil prices. After the previous regime’s prolonged stasis, it seemed Modi wanted—intensely and visibly—his government to be synonymous with action.
Sadly, an all-consuming desire for action can also be a double-edged sword. A disturbing practice seems to be emerging from the NDA leadership and its ministerial bench: an obsession with targets, regardless of their feasibility and achievability. This fascination manifested itself during the 2014 election campaign and the poll results perhaps lulled the government into believing that targets were an indispensable part of governance or were a justifiable substitute for action.
An example of audacious targets was provided by the PM in March 2016 when he promised to double farmer incomes by 2022, primarily through reduced input costs. Apart from lack of specifics on whether he meant real or nominal income, doubling incomes in five years assumes an annual growth rate upwards of 14%. He reiterated his resolve in March 2018, listing out seven steps that would be necessary to achieve the target. While there is no reason to doubt the seriousness of his pledge, the timing of its utterances—before a major state election—lends it a rhetorical ring and robs it of all significance.
The PM’s self-confidence with unattainable targets extends to areas which may not have any immediate electoral traction, such as renewable energy. In 2015, Modi announced that he wanted 175 gigawatts (GW) of renewable power capacity in the country by 2022, of which solar alone would be 100 GW, wind 60 GW, biomass 10 GW and small hydroelectric projects 5 GW. In solar, he ramped up the 2010 target of 20 GW five times. Here’s a reality check: According to a press release issued by the ministry of new and renewable energy, at the end of February 2018, total capacity installed was 65 GW, against the target of 175 GW by 2022. There are four more years to install the balance 110 GW but it seems doubtful, going by the yearly progress rate and the investment required.
The PM’s example is, of course, followed by his ministers. The commerce ministry, under its previous minister, Nirmala Sitharaman, announced a string of export targets, with the most adventurous being a goods and services export target of $900 billion by 2020. By the time the mid-term review of the foreign trade policy, 2015-20, rolled up—around December 2017—the government had jettisoned the target. Reality: As of 31 March 2018, India’s exports of merchandise and services totalled $494.98 billion. The export target was sub-divided into multiple country, regional or continental targets, which have also been missed.
Her successor Suresh Prabhu has also weighed in with another inspired target: exports to contribute 40% of gross domestic product (GDP) by 2025. In reality, exports are currently close to 19% of GDP. By 2025, with GDP expected to double from current levels, exports of goods and services will have to multiply four times from present levels—or touch $2 trillion—to reach anywhere close to 40%.
Sitharaman moved to the defence ministry in September 2017 and carried her penchant for targets to the new ministry. Consequently, she has now set out a new set of targets to be achieved by 2025: a defence goods and services turnover of Rs1.7 trillion involving an additional Rs70,000 crore investment and Rs35,000 crore exports. India is among the world’s largest buyers/importers of defence goods and the Modi government has been trying to attract foreign direct investment (FDI) into domestic defence production but the outcome has been paltry: a mere $0.18 million between April 2014 and December 2017.
The textile ministry does not want to be left behind and has come up with its own set of targets: $300 billion from domestic production and trade by 2025, double the current level of $110 billion production and $40 billion trade. Achieving this will require a colossal effort in improving the productivity and yields of cotton, synthetic and man-made fibres. Not to be left behind, many other ministries—such as power and highways, to name two—have selected their own targets.
Not all targets deserve to be criticized. Many individual ministries have fixed targets that are feasible and can be achieved. Targets have a definite role to play in charting the future path of any mission. But quantitative goals must be realistic and exist within the realm of the possible. Exaggerated ones need extraordinary execution skills at the leadership level to inspire the rank and file to believe in them. Otherwise, they’re just mere numbers, pies in the sky.
Rajrishi Singhal is a consultant and former editor of a leading business newspaper. His Twitter handle is @rajrishisinghal.
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