Reviving the economy: Ensure targets are met

There’s something of a déjà vu about the ambitious “Bharatmala” project, a major part of the government’s Rs 9 lakh crore stimulus plan to revive the economy and create jobs. Some feel it is akin to the two-decade-old National Highways Development Programme. There is also scepticism about the government’s ability to meet its ambitious target of building 83,677-km roads as it could build just 5,200 km of the 15,000-km target it set for itself last year. The important issue, however, is that the stimulus package meet its twin objective of economic recovery and job creation. Road-building programmes are used globally to stimulate jobs, besides providing better transport. In the UK for instance, a recent study suggested roads could produce economic benefits — at least locally on jobs, output and wages between 1998 and 2007. It was calculated that £1 billion spent on road development could create 2,000 jobs. In the US too, in the 1930s’ Great Depression, President Franklin D. Roosevelt backed massive road construction projects as part of his New Deal to stabilise the nation’s economy and increase employment. In fact, it is said these roads are still in good shape while other infrastructure is in shambles. US President Donald Trump highlighted this and said he would embark on building new roads to create employment.

While India’s experience is not too happy in building of roads, it is hoped a hands-on, combative minister like Nitin Gadkari, in charge of roads development, will take this programme very seriously and ensure that targets are achieved. Any roadblocks that require administrative approval should be dealt with immediately and incentives offered to labour to achieve targets. Most important, total vigilance is needed to ensure that no corruption seeps into Bharatmala’s implementation.

It is expected that roads will be built through the public-private partnership (PPP) route. This means bank funds too must be available. Hitherto banks were reluctant to lend to the private sector for fear of adding to their non-performing assets. Their balance sheets have yet to be cleaned up before they can start lending.

It is heartening that the government is aware of this and has provided '2.11 lakh crore support to banks so that they are able to get on their feet again. Perhaps it is also time for the Reserve Bank to cut interest rates and contribute towards reviving the economy, which will lead to job creation.

The success of the stimulus programme will also enable the government to retrieve its image, which has taken a beating with its disastrous demonetisation exercise and hasty implementation of the Goods and Services Tax. It will also prove the Prime Minister’s bugbear Arun Shourie wrong. Mr Shourie had called the Narendra Modi government an “announcement sarkar” as opposed to an “action sarkar”.