Economy Or Not Modi Charms
The recent elections testify that economy, ecology and electorate are not on the same page. Inflation, slower growth, jobs, Himalayan ruinous development from Kashmir to Nagaland, opposition chant of mis-governance, or even Rs 10 lakh crore loss due to Adani collapse are given a go by.
Tripura’s two lakh government servants and voters are happy to have deferred 12 per cent DA rise, shortly before the polls and forgets excesses. Nagaland votes for hurriedly cooped up January 14 commitment by the BJP government of resolution by NSCN(IM) and Naga National Political Groups, comprising seven rebel groups, pending since 2015, for the rights of Nagas. There is hope. Parallel taxation or extortion by so-called rebels may come to an end.
Despite not making much gain in Meghalaya, the BJP still emerges as the winner in the northeast as it gives up core “Hindutva of no beef” for winning tribal and Christian trust. The poll results prove that the BJP’s constant developmental focus on the northeast and shrewd poll strategy have established it as the dominant party in the region. This is in contrast to Left-Congress alliance in Tripura engineered against what they alleged coercive, violent politics against their cadre. It is adaptive politics!
Performance or lack of it or inability to deliver growth does not harm the ruling party, neither stupendous debt of Rs 172 lakh crore nor high debt servicing matter. Indians are used to low Nehruvian Hindu growth of 3 per cent. Vast majority over 60 per cent or 81 crore are satisfied with food grain doles, that gives them an income of about Rs 15000 a month. Are subsidies bartered for votes? Good politics at people’s cost.
People forget high GST, toll and petrol road cess, high-cost economy, slowdown, slowing exports. The RBI concern about stability, increasing interest rates to check inflation, which in real terms remains unchecked, is not a poll issue. Stupendously rising wheat prices or low onion prices to farmers affect none. Are people fatigued with the issues or they might have got so accustomed to the unresolved phenomenon.
Banking failures or recent losses due to Adani, Nirav Modi or such collapses do not rattle anyone despite banks’ losses. Bank of Baroda chief as also bank staff are happy as they get a five-day week as per agreement between Indian Banks Association and United Forum of Bank Employees. And no one even refers to the SBI raising $1 billion “landmark” syndicated social loan, called environment, social and governance loan, in the Asia Pacific market and its impact.
States bordering China have least concern about increasing imports to China and abysmal shrinking of exports or increasing Chinese belligerence. The G20 is giving the country good international exposure but the visiting dignitaries are promising little. They are discussing more the western and Russian differences over NATO issues and crib over India’s trade with Russia. Indian voters even do not discuss that the benefit of cheap oil imports from Russia being credited to two large private refineries and not to the people in general. The G20 programmes are matters of glitter.
India has emerged as the largest social welfare state. In 2022-23, the Central government has allocated Rs 2,06.831 crore for food subsidy out of which Rs 1,45,920 (71 per cent) crore is for providing food subsidy to FCI. The subsidy has been cut to Rs 197,350 crore or by Rs 89,844 crore in 2023-24. The MNREGA size increases four times since 2004. The demand grows despite budgetary allocation cut now. The country has 53 million people as unemployed.
Total subsidies for 2022-23 are Rs 532,447 lakh crore, much of it goes to corporate. These are neither discussed nor are issues. As per statistics 8.3 per cent are unemployed. India’s capacity to give its people work has been in trouble for a long time more so after the planned decline of the PSUs. Systematic maligning of the efficient PSUs by the private lobby has caused immense loss to the people. Air India is sold for a song. Now the government itself is supporting it for a purchase of $80 billion purchases of 400 US Boeing and EU Airbus planes. Corporate intransigence is not part of the political debate.
The Opposition is so splintered and family and raise core issues so feebly it goes unheard. The Congress, TMC or anyone is more interested in projecting themselves as “true Hindu” than projecting an alternative economy that could charm the people.
The youth are so hit by economic distress that they do not have the energy to discuss core issues. Politics is more about empowering themselves and getting personal benefits. The core issues are not anywhere in discussion, be it the failure of telecom companies or sacking by large IT companies on one or the other pretext. Recruitment scams are routine. Political corruptions are accepted. Nobody wants to know how West Bengal’s TMC gets Rs 500 crore donations only next to the BJP.
So manufacturing contracting by 11 per cent in December 2022, third in a year, causing substantial job and wealth loss, remains concern of experts. Real gross value added manufacturing growth is 0.4 per cent vis a vis 10 per cent in construction with government’s infra push, says Citibank chief India economist Samiran Chakravborti.
Nobody even discusses the problem of infra push, fancy roads, stations, malls with not so high utilisation. Most malls do not have even 50 per cent occupancy and many large ones have closed down. Restaurants, hotel, travel and tourism remain in crisis as people do not have extra money to spend.
The NSO assumption of 7 per cent GDP growth implies far lower growth if December 2022 figures are any indication. Nomura economist Aurodeep Nandi and Sonal Varma say global financial conditions can impair growth drivers – exports, investment, and discretionary consumption and check growth to 5.3 per cent in 2023-24.
Indian society feels the pinch. But an Economic Times March 2022 survey sums up and is valid after a year. It predicted Prime Minister Narendra Modi’s secure position and winnings at the hustings. “Unlike voters in many countries of the world, India is among top populations who believe the country is headed in the right direction. A whopping 77 per cent of those surveyed in India felt positive about the country, second only to Saudi Arabia, a monarchy. In the US and Britain, the majority feel the countries are headed in the wrong direction”.—INFA
Global Inflation Sticky | Job Cuts Slow GrowthMarch 27, 2023
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