As the Prime Minister Narendra Modi government enters its second year in office on Tuesday, there is no dearth of bouquets and brickbats for the "NaMo" regime in the media. On analysing the government's electoral assurances, the actions taken so far and the respective timelines being followed to achieve these, one would say it is reasonably on track in fulfilling its short-term, medium-term and long-term promises.
Importantly, the continuation of the previous government's policies like Land Acquisition and Rehabilitation and Resettlement (LARR) Bill, and Real Estate (Regulation and Development) Bill will have significant impact on the realty industry once these are passed by the parliament. India's historically opaque real estate sector will move towards more transparency with the introduction and implementation of these key policies.
It is worthwhile to reflect on the grassroots-level transformation we can expect to see:
- Millions of home buyers in towns and cities and farmers across the country (the latter being landowners affected by infrastructure projects) are empowered with the clauses in the real estate regulatory bill and LARR
- Investment opportunities in office spaces open up for small retail investors thanks to real estate investment trusts (REITs)
- The quality of life of millions of Indian citizens is upgraded when the proposed 100 smart and sustainable cities come to life
- Benami, or fictitious, transactions, which have for the longest time been a bane of the real estate sector, are eliminated.
Let us take a look at the progress on some of the promises Narendra Modi's party made in its electoral manifesto. Specifically, we will isolate promises which have direct bearing on enhanced governance and reinforced democratic fundamentals, which are important for India's development and future-readiness:
The promises that are on track:
- Transparency: Re-auctioning of coal blocks earned the government huge revenues
- Efficiency: Real-time effort towards rendering the existing institutional frameworks more efficient; a good example being the change in Food Corporation of India's food procurement and storage mechanisms.
- Productivity And Accountability: Prime Minister Modi has been directly involved in monitoring and raising the productivity as well as efficiency of his ministry officials. He is clearly bucking a chronic trend of bureaucratic unavailability and aiming to increase public access to government officials.
- Black Money: The bill to curb black money has given a moratorium period to bring back unaccounted money into the system by paying normal tax. The ongoing dialogue with the Swiss financial authorities to disclose secret accounts of Indians abroad is reaping results.
- Corruption: Wired (online) transactions are now being encouraged for property transactions. This is a major step forward for curtailing black money in the sector.
- Investor Confidence: Market confidence has improved with the strengthening of the Indian equity, debt, currency markets and equal tax regime that was promised to both domestic as well as international investment companies.
- Positioning India: Via a series of international tours, the prime minister is helping India rid itself of its anti-investor image and is opening up new avenues of foreign business in India, especially under the Make in India campaign.
- Decentralisation And Cooperative Governance: Gradual increase in the financial autonomy of states, farmers have real-time information on minimum support price through digital channels and drastic price movements have been largely under control. A focus on citizen outreach programmes as well as leveraging social media have bought the people closer to the governance process.
Promises that may see progress soon:
- States with similar problems will be able to form councils under NITI Aayog to discuss common concerns
- NITI Aayog, along with other national agencies, will help individual states in mobilisation of resources.
Promises that saw little or no progress:
- Relaxing clauses in the LARR Bill, REITs and foreign direct investment (FDI) policies that investors find difficult to follow
- Increased credit facilitation to start-ups
- Initiation of employment exchange programmes with other countries
- Obsolete laws to be scrapped or modified
- Online dissemination of court cases for better monitoring and creation of specialised courts to fast-track delivery of justice.
In short, the Modi government has a fairly balanced list of hits and misses so far. The trend does seem to lean more towards action than inaction. It definitely seems that the prime minister has every intention of living up to the larger part of his electoral promises in the future.
One agrees with Reserve Bank of India (RBI) Governor Raghuram Rajan when he says that the expectations from the new government when it came to power last year were "probably unrealistic". But it has, in fact, taken steps to create an environment for investment and is sensitive to concerns of investors.
(Anuj Puri is chairman and country head at the India arm of JLL, a global real estate services and investment management consultancy listed on the New York Stock Exchange - @JLLIndia_Realty. The views expressed are personal)
