Part V
Economists’ analysis of the state of an economy is a leaf out of the fable of elephant and six blind men. Each sees partial truths, none the whole truth. Else, the world would have been forewarned of boom and doom catastrophes that rocked economies in the past.
Economists’ analysis of the state of an economy is a leaf out of the fable of elephant and six blind men. Each sees partial truths, none the whole truth. Else, the world would have been forewarned of boom and doom catastrophes that rocked economies in the past.
Admittedly, figuring out the net result of greed and sentiments of individuals is no walk in the park . It is no elephant in the room too, for the economy affects each one of us. Hence everyone has an opinion on it. After all, it is a bread and butter reality.
So, where do we stand today ? To pose the same question figuratively, was the ₹1000 note commandeered by way of demonetisation exchanged for ₹2000 or a ₹200 note?
To begin with ,the adduced success of a Gujarat Model of vikas held unlimited possibilities of replication at the national level by the very one who pioneered it, Mr N D Modi . A fresh approach, divorced from Nehruvian Fabianism and UPA’s Rights and Entitlements , to management of a tired looking economy was foretold.
If I have understood it rightly, the model is an amalgam of market economy, anti-povertarianism disfavouring subsidies ,and better administration captured in the catchphrase “ minimum government ,maximum governance”
But as the day has worn on, the economic management has looked singularly unimaginative. Past schemes have been dusted ,repackaged and relaunched under the names of new icons, the most popular being Deen Dayal Upadhyay. (One wonders why Hedgewar, Golwalkar, the founding fathers of RSS, get a short shrift ,while even a railway station stands baptised with Deen Dayal Upadhyay’s name. ). We see this happen routinely in pharmaceutical industry. A drug patent expires, it gets relaunched under a different brand name by a new manufacturer. Not too innovative, i say.
‘Modilectuals’ consecrate this resurrection as incrementalism. But it lacks the whiff of fresh air that was to blow with the regime change. True, some of these schemes are muscularly followed up and doing well like Swacch Bharat Abhiyan. Not so other schemes, take village electrification. Of the 6 lac villages,congress rule saw over 9600 villages getting electrified per year over 60 years. Ii took Modi sarkar four years @ 4500 villages per year to electrify the remaining 18000. That is a half reduced vigour.
The subsidy regimen, much maligned as promoting povertarianism , continues unabated, adding new ones like free LPG connections. If the Gujarat Model stood for a free market, recent strengthening of the MSP for agricultural produce doesn’t gel with it. Plugging leakages in subsidy administration is noble but isn’t any evidence of economy being nudged towards market control.
On current evidence, therefore, management of the economy is beset with ideological obfuscation.
Start-Up India, Stand -Up India, Make in India, Digital India , Skill India ,to name a few ,held
promise of a structural transformation in GDP in favour of industry. However ,the share of industry in GDP remains unchanged while the services sector continues to grow . Apparently industrial renaissance continues to Sit down.Though it is said that India now is the fastest growing economy amongst the ones that count. But has it done better than its predecessors ? Let’s see.
MMS NAMO
GDP growth. 1.12 1.10
(compound growth rates -Fy12-FY14 for MMS years ,FY15-FY18 for Modi years, at 2011-
12 constant prices)
No earth - shaking numbers and a little worse than its predecessor. The trouble is MMS years were his worst, much calumniated as one in throes of economic paralysis. If so ,what does one say of the lesser Modi numbers ?
Mind you , Modi sarkar kicked off the block with some god gifted boons (a fact Mr Modi publicly acknowledged , ऐसे 'लकी' हैं, जिससे सत्ता में आने से पेट्रोल, डीजल और दूसरी जरूरी चीजों के दाम गिर जाएं...)— a steamroller majority in Lok Sabha with a divided ,scuppered and chastened opposition ,a steep fall in crude prices ,and a global economy seeing green shoots leafen.
Like the blind men, Modilectuals will point to many other indices that look to paint a contrary picture. And as in the fable each tells a truth. But at the end of the day , the economic endeavours must lead to rising standards of living, more wealth for the people at the median level, and abatement of income disparities .
The four years seem to be a lost opportunity on this score.
1.Per capita GDP hasn’t really taken off .
MMS NAMO
Per capita GDP growth 1.09 1.08
(compound growth rates -Fy12-FY14 for MMS years ,FY15-FY18 for Modi years, at 2011-12constant prices)
2.A Credit Suisse report states, between end 2013 and middle 2017, the wealth of an average adult increased at a compound growth rate of 1.09 %. However, median wealth increased by only 1.05%.
3.The World Inequality Report 2018 -Top 1% of the income earners appropriated 22% of national income, while the bottom 50% had just 15% of it to share among themselves.
4.India’s rank in The World Happiness Report 2018 fell from 111 th to 133rd out of 156 countries since 2013 . All ,yes, all our neighbours ranked higher.
5.The average adult became doubly indebted between 2013 and 2017( Debt per adult shot up to $609 from $335).
Last but not the least is the little matter concerning poverty. The country slipped from 55th rank in 2014 to 100 th rank out of 119 countries in the Global Hunger Index. In the new measure of poverty, Multi-dimensional Poverty Index, MPI, as much as 41 % of population is deemed poor, including 22 crores living in extreme poverty, the destitutes. Another 23% are vulnerable to poverty. Thus 64 % of our 125 cr people who placed their trust in Mr Modi, as he is wont to point out, are in or on verge of poverty.
India was among the few countries that achieved the MDG in poverty reduction -50% reduction of destitutes in the first 15 years of the millennium .This momentum needs to be carried forward. Contrarily ,the first thing Modi Raj did was to disown the Tendulkar or Rangarajan poverty line. NITI aayog was tasked to draw a better poverty line. The committee it set up , deliberated for two years yet failed to arrive at one. Niti has now abandoned the project, so we don’t have any poverty line . Good or bad a poverty line would have helped in planning and monitoring of progress in reduction of destitutes.
Sadly, the inescapable conclusion is that distributive justice implied in Sabka saath Sabka Vikas hasn’t translated into reality any better ,if not worse. than in previous regimes. But what rankles is the patent lack of sincerity about it.
To a farmer compelled to suicide due to crop failures or sub-cost market prices, the Soil Card govt issues looks more of a soiled card. Youth being told to set up pakoda stalls or Paan shops is an abject admission of failure to generate promised employments. The reality of Job losses in the IT sector or of Indian expatriates returning home from Gulf countries due to lay offs has come to strike us nearer home.
Meanwhile, Modi sarkar is increasingly seen as relentlessly pursuing ,often by hook or crook, a congress mukt agenda to the exclusion of issues of bread and butter. The common man wonders, was that the mandate I gave? Did I want a congress mukt over a poverty mukt Bharat ?
While Mr Modi’s oratory won many political brownie points in the last four years, his economic management surely has lost as many .
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