New Delhi: In an attempt to change the narrative and win the perception battle, Prime Minister Narendra Modi has intervened in the debate over the state of the economy and tossed the ball in the court of his critics and opposition. The move also signals how, in the past one week, the government has tried to reclaim the narrative in order to maintain its credibility.

A series of steps by the National Democratic Alliance (NDA) government in recent weeks, including last-mile village lighting, an excise duty cut on auto fuel and Modi’s amnesty for small entrepreneurs who were previously out of the tax net, have helped build positive sentiments at a time when the economy is going through temporary shocks of structural reforms.

The intervention by the Prime Minister comes at a time when the ruling Bharatiya Janata Party (BJP), particularly the top leadership, has come under severe criticism on the economy. The problem for BJP is that it is not only the opposition parties that are criticizing the government but that a section of its own senior leaders, including former ministers Yashwant Sinha and Arun Shourie, have spearheaded the attack.

The government’s management of the economy came under scrutiny when growth rate slowed down to 5.7% in the June quarter from 6.1% in the preceding three months, which gave rise to loud calls for a stimulus package. However, the finance ministry decided that since public spending had already been “front-loaded" in the current year by advancing the 2017-18 budget by a month to 1 February, a decision on higher spending that would warrant more than estimated borrowings could wait until the next budget.

Interestingly, even the top leaders of the Rashtriya Swayamsevak Sangh (RSS), the ideological parent of BJP, cautioned the government that there was a need to protect farmers, as well as small and micro businesses.

Modi, in his intervention, directly addressed criticism that the NDA has mismanaged the economy.

Government steps include a Rs16,320 crore scheme announced on Monday to help realize the government’s goal of “electricity for all"; reconstituting the Economic Advisory Council to the Prime Minister; advising state-owned enterprises to step up capital expenditure including through market borrowings; Tuesday’s excise duty reduction on petrol and diesel; and easing the procedures for small exporters and instructing tax officials to process refunds to exporters faster. The Prime Minister on Wednesday also assured that entrepreneurs becoming part of the formal economy will not be harassed.

Addressing the golden jubilee celebrations of the Institute of Companies Secretaries of India on Wednesday, Modi spoke on a range of issues—among them, the restoration of the premium on honesty, a resolve not to mortgage the future of the country for his present, a promise not to retrospectively investigate companies joining the formal economy, the hope that India should become the most tax compliant nation by 2022 and an assurance that the government was committed to reversing the trend of GDP (gross domestic product) deceleration.

Modi’s intervention is also significant politically—assembly elections are due in Gujarat and Himachal Pradesh in the next few months and a significant portion of the voters in Gujarat are small, medium and micro traders.

Political analysts said Modi is addressing a “mindset issue" and is therefore making use of a narrative that requires mindset change in order to adopt policies with long-term benefits or impact.

“The things that Modi is talking about includes structural changes like the goods and services tax (GST). If you start looking at the temporary outcome, you will not be able to make sense of it. Impact of these are long term and so they have to be explained in that way. This goes beyond a campaign mode of speech," said N. Bhaskara Rao, a New Delhi-based political analyst.

Soon after Modi’s Wednesday speech, opposition parties came out in criticism and accused the NDA of mismanaging the economy. Randeep Surjewala, chief spokesperson of the Congress party, tweeted: “All drivers of our economy are sputtering and stumbling. Future of the young generation is at stake. Can sugar coated dramatics help, Modiji?"

Sitaram Yechury, general secretary of the Communist Party of India (Marxist), attacked Modi over demonetisation, “mismanagement of GST" and higher indirect taxes.

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