In his first year as Prime Minister, Narendra Modi has seized the global spotlight with global media coverage. Two authoritative weekly newspaper articles published in the past week, Time Magazine and The Economist respectively, offer two important reasons why the world needs both India and the prime minister to step up as a confident global power.
Economic Reforms (Fast and Far)
First, the outlook for the Indian economy has improved over the past year, though that’s not entirely due to Modi’s efforts. Modi’s “pro-business orientation” is unlike its predecessor. The government has taken steps to further liberalize India’s economy by, for example, opening up key sectors of the country’s economy and pushing through long standing proposals to increase foreign direct investment. On whether economic reforms have gone far and fast enough, Modi told TIME editor Nancy Gibbs, “This time last year, nothing seemed to be happening in the government. There seemed to be a complete policy paralysis. …There was no leadership. My government’s coming to power should be viewed in the contexts of the developments of the 10 years of the last government vs. 10 months of my government (Time, May 18, 2015).”
Second, Modi is a superb taskmaster. The Economists has compiled a list of 30-odd official pledges announced in the past year to outline the government’s ambitions (see left). Around half the tasks are means to be completed by the next election, 2019. The article(s) were published in Time magazine, May 18, 2015; The Economists May 23-29, 2015 (US Edition).
Indian banks stepped up lending in the first Quarter, contributing to the growth of the Priority Sector by extending credit on favorable terms in Minorities Community Lending (MCL).
The growth in the percentage share of MCL, in total Priority Sector Lending (PSL) show banks have been working in accordance with the reform policies of the Government of India (Ministry of Finance, 18 September 2014). The top 5 Indian banks (PSUs) having the largest percentage share of MCL Outstanding in total PSL are Punjab & Sind Bank, State Bank of Travancore, State Bank of India, State Bank of Patiala and Canara Bank. Though State Bank of India is on the third position in Percentage terms, it is the top most bank as per MCL Outstanding in terms of absolute amount i.e. Rs. 53671 crores out of the total PSL of Rs.278590 Crores as on Quarter ending March 31, 2014.
All the 27 Indian PSU banks including IDBI and Bhartiya Mahila Bank, put together, have MCL Outstanding of Rs. 240838 crores out of the total PSL of Rs.1497055 crores as on the Quarter ending March.
Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of special exemptions. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections of the economy (Reserve Bank of India, 2014). The central bank revised guidelines on lending to steady credit growth and avoid the big fluctuations that unnerved the market, October 2013.