Modi vows to fix broken government, but no big bang reforms

Critics say Modi scores high on oratory but has delivered on few of his election campaign promises.

Prime Minister Narendra Modi voiced dismay on Friday at the government in-fighting he found on assuming office in May and vowed to fire up the bureaucracy to deliver results in a country desperately in need of growth and development.

Delivering his first Independence Day speech, Modi emphasised the need for better governance but announced none of the sweeping market reforms that many who handed him India's biggest election mandate in three decades have been awaiting.

Critics say that Modi, who spoke for more than an hour from the ramparts of the 17th-century Red Fort, from where Mughal kings ruled Delhi for two centuries, scores high on oratory but has delivered on few of his election campaign promises.

He did, however, unveil an initiative on Friday to improve access to financial services for the two-fifths of Indians who lack a bank account and are often at the mercy of moneylenders who charge extortionate interest.

He also announced that he would replace the central Planning Commission that for decades guided the country's socialist-style economy with a more modern institution.

The 63-year-old prime minister, a newcomer to central government after running the industrialised western state of Gujarat for more than 13 years, bemoaned New Delhi's bureaucratic disarray.

"I saw that even in one government there were dozens of governments. It was as if each had their own fiefdoms," he said, touching on a key concern for many Indians, who have come to revile the layers of bureaucracy and rampant corruption.

"The government is not an assembled entity but an organic entity. I have tried to break down these walls," Modi said.

The centre-left government led by the Congress party that was ousted in the election was seen as ineffectual and unable to carry out reforms as departments from finance to environment worked at cross-purposes.

Modi promised in his election campaign to revive economic growth that has fallen below 5 percent, choking off job opportunities for the one million people who enter the workforce every month, and dangled the prospect of new roads, factories, power lines, high-speed trains and even 100 new cities.

So far, there has been little movement on any of these tasks, which will require an overhaul of land acquisition laws, faster environmental clearances and an end to red tape.

Many of his supporters have been disappointed that he has not cut food aid and other costly welfare schemes to channel money into more effective poverty reduction steps. However, economists said it was too early to expect dramatic initiatives.

"Let's get our expectations to real, acceptable levels," said Shubhada Rao, chief economist at YES Bank. "For the first three years, it is going to be a repair-and-mend phase ... only then the economy will be ready to take off. Until you repair, these big bang announcements would go to waste."

Narendra Modi addressing the nation on the occasion of 68th Independence Day from the ramparts of Red Fort, in Delhi. ' Photograph: Courtesy, PIB