 |
POLL BUGLE
Scoring brownie pointsG.Srinivasan
But in a nation touted to enjoy demographic dividend of youthful populace looking for opportunities to advance in life, the broader macro-economic picture appears none too chirpy or encouraging with the management of the economy during the last four years or thereabouts showing up starkly. There are not only corking troubles like burgeoning nonperforming assets (NPAs) of the banking system, insipid lending to the real sectors of the economy by the banking industry, impaired as it were with the albatross of NPAs, the widespread distress of peasantry as it finds farming not a viable avocation in the absence of any helpful input subsidy or reasonably remunerative outlet for the output they harvest, worst manufacturing growth promising no employment to legions of skilled, semi-skilled or unskilled youth and the vitiating of the job market by reservations through legislation even if they are designed for the economically weaker sections across all castes! Having been beaten and bitten by the five State assembly polls towards the final months of 2018 that put paid to the successful electoral juggernaught of the BJP all through the last four years in whatever elections it fought, the ruling party is now desperate to manufacture some meretricious packages lest its fortune in the polls should not plummet. Its various acts of commission and omission, including majoritarian pride, intolerance, dismantling of the Planning Commission, disregard for institutional freedom –be it CBI or the RBI and lip sympathy for the values of democracy by sidestepping the upper House by resorting to money bill tactics to smother dissent and impugn the house of elders, the abrupt cancellation of high denominational notes causing untold miseries to millions on a whimsy and the shoddy implementation of the Goods and Services Tax(GST) in the name of cooperative federalism have all but slowed down the growth of the economy during the past four years. Attempts were also crudely made to dress up figures by back-casting data to discredit the growth performance of the previous UPA dispensation, using the newly-found Niti Aaoyg. For Modi who promised to herald acche din, minimum government and maximum governance, creation of millions of jobs and a corruption-free administration, he could hold his head high only on the last proposition . No wonder policy wonks with reputation to bank on maintain that though most macroeconomic parameters have improved with lower volatility, thanks to the bonanza of the steep fall in the global crude oil prices at a stretch for a few months, the fact remains that gross domestic product Scoring brownie points POLL BUGLE 16 February 2019 Power Politics G.Srinivasan For Modi who promised to herald acche din, minimum government and maximum governance, creation of millions of jobs and a corruption-free administration, he could hold his head high only on the last proposition. (GDP) has grown at an average of 7.3 per cent in the past four years. This is definitely lower than the 7.6 per cent trend in the preceding decade and a far cry from the 8 to 9 per cent growth promised. The oil bonanza the NDA government reaped through higher excise levies was not spent on building capital assets but to utilize for consumption expenditure and other revenue spend of no substantive value to the asset creation of the nation. The only consolation is that the government did not take recourse to gimmicks to push up growth availing of monetary and fiscal policies that would have further messed up the macro picture, instead of resulting only in slowdown as the economy is in now. But this unwillingness to take growth by pushing public outlays or encouraging private sector to invest or stay invested proved to be a curse that had led to economic slowdown and lack of job creation for millions. According to the Centre for monitoring Indian Economy (CMIE), roughly 3.5 million jobs were lost in the early months of 2017 following the demonetization and the concomitant crippling of the largely cash-based informal economy. As for the farmers go, rural development remains a mirage and the lot of the farmers continue to be dismal and discouraging. The slower farm growth, insufficient farm price realization, laggard pace of construction works and lackadaisical rural wage growth have all aggravated the anxieties and agonies of the agrarian community and they came to the capital in lakhs in the last days of November 2018 to highlight their pathetic plight and pitiful survival. Though big measures might help ameliorate their lot in the short-run including a spurt in the minimum support price and the price deficiency payment scheme and a few populist packages covering income support scheme and interest-free loans over and above the farm loan waiver flagged off by state after state following the Prime Minister Modi’s preliminary one in the run-up to the Uttar Pradesh poll in 2017, most of them remain in the drawing room with not a few being brought to the relief of farmers till date. For the NDA government, despite its several initiatives, manufacturing industry or the secondary sector, did not pick up pace or mojo. In the absence of a genuine growth revival in this vital sector, the country’s dream of generating high quality job opportunities would end up a mere pipedream. Private investment continues to be shy or not forthcoming as the main lending window the banks themselves are in cleaning up process of the mess they inherited because of lending to the maverick entrepreneurs who defrauded the system sans repayment of interest or principal by resorting to the age-old tactics of decamping or being fugitive from the laws! The only ray of hope for the hapless kisans in the country is the proverbial mercy of the monsoon which played truant during the first two years of the Modi Sarkar has been on course and for a third straight time in the subsequent three years promising a cornucopia to the granary of the country. But this in no way abates the agony of farmers as their price realization for the produce is but excruciatingly poor. For the NDA government, despite its several initiatives, manufacturing industry or the secondary sector, did not pick up pace or mojo. In the absence of a genuine growth revival in this vital sector, the country’s dream of generating high quality job opportunities would end up a mere pipedream. Private investment continues to be shy or not forthcoming as the main lending window the banks themselves are in cleaning up process of the mess they inherited because of lending to the maverick entrepreneurs who defrauded the system sans repayment of interest or principal by resorting to the age-old tactics of decamping or being fugitive from the laws! Insolvency laws framed by the government and getting implemented by degrees may take a few years and also cost the banks to take a huge haircut amounting in certain cases to total tonsure if they have to make the slate clean and start the lending cycle! No wonder the Prompt Corrective Action (PCA) initiated by the banking regulator, the RBI, on eleven banks is being blamed for lack of credit spigot for the micro, small and medium enterprises (MSMEs) and the larger non-banking finance companies (NBFCs) for the lack of credit malaise plaguing the real sectors of the economy. In fine, as the Government has come out with an interim budget, it used the opportunity to throw sops liberally and such generous gifts would exact its cost from the next government but the people who get lavished on the sops would end up sobbing inconsolably when the benign inflation turns malign to emerge as the cruelest form of taxation, critics wryly say. One must be chary of the recrudescence of inflation, twin deficits such as fiscal deficit and corporate and bank balance sheets troubles and any laxity in sticking to fiscal consolidation path by splashing the cash in an election year as these prosaic practices might come home to roost and roast the economy and the stakeholders! The author is a former Deputy Editor, The Hindu |
|
