Wednesday, November 20, 2019

Descending to crash

Ignoring warnings and advice, the government continues denying existing issues of governance and economy 

Pankaj Sharma
18 Nov 2019

Before Narendra Modi took over as the prime minister, India's rank in Global Democracy Index was 27th. Today it is 42nd. A deep fall it was indeed. That means we in India enjoy 65 per cent less freedom in different walks of our lives now than five years back. In 2014, India held 27th position in the Democracy Index with an overall score of 7.92. It had a score of 9.58 for electoral process and pluralism, 7.14 for the functioning of the government, 7.22 for political participation, 6.25 for political culture and 9.41 for civil liberties. Also Read - Sincerity in doubt In 2018, India is positioned at 42nd place with an overall score of 7.23. The score for electoral process and pluralism is down to 9.17. On the other four parameters — political culture, the functioning of government, political participation and civil liberties, the scores were even more pathetic than usual. The Economist this year has assessed the ranks for 165 independent states and two territories on the basis of five categories: electoral process and pluralism, civil liberties, the functioning of government, political participation and political culture. The list of countries is divided into four categories every year — full democracy, flawed democracy, hybrid regime and authoritarian regime. Also Read - Questioning the Nobel? The survey is carried out every year by asking a huge sample group of people a set of 60 questions. Listing the countries on the Global Democracy Index began in 1946 and this is the lowest ever score attributed to India in the index in the past 73 years. It shows how the Narendra Modi led government has curtailed people's freedom during its regime of five years. The economic slowdown is at its peak. The unemployment rate is at its all-time high. Social harmony is facing unprecedented challenges. The independence of constitutional institutions is under inexorable threat. India has to face this vision of governance for at least five more years. Therefore, this is the time when you must fasten your seat belts to negotiate your way through turbulent weather. The manufacturing sector is on a ventilator. Per capita spending has gone down to a worrisome level. A shutdown of thousands of industrial units has created an unparalleled situation of heavily decreased demand for electricity. It has resulted in an unfortunate state of affairs where thermal power stations have to halt their generation. Many of them are closing down. Is all this not frightening? Modi government is withholding all the data that can become an indicator of a serious wipe-out of happiness in India's public life. Constantly ignoring the plight of the masses has become a most favourable pass time for the ruling dispensation in the last five years. Prime Minister Modi is more engrossed with non-issues and keeps real concerns at a bay. Official data released by the National Statistics Office confirms that almost all Indian sectors including automobile, manufacturing, agriculture, FMCG, real estate and construction have slumped badly. Weaker consumer demand and slowing private investments are the two key factors behind the ordeal of the core Indian sectors. Eight core sectors have registered growth of just 2.1 per cent compared to 7.3 per cent a year ago. All of these indicators also explain the reason behind the recent jump in job losses. According to the Centre for Monitoring Indian Economy, overall unemployment in India has now touched 8.2 per cent, with an urban figure as high as 9.4 per cent. Indian investors have become wary. Major companies have been posting huge dips in profit and even losses in many cases. Foreign investors are constantly pulling out capital from the Indian market. All major Indian companies have seen their fortunes dip over the last few quarters. The lending crunch in the market has severely impacted almost all the sectors that play leading roles in driving the Indian economy. The Indian rupee has become one of the worst-performing. The rupee is passing through the steepest decline of the Indian currency in the last six years. This is a clear indication of gross underperformance. It could become much worse if healing measures are not introduced immediately. It may seem improbable at the moment but with the passing of first quarter of 2020, the economic crisis will be so acute that it will become almost impossible to protect people of lower-income groups from famine-like circumstances. I was shocked to go through a tweet from BJP's official handle a few weeks back that claimed India still remains the fastest-growing economy. This comes at a time when top economists are urging the government to focus on boosting investments to drive growth. But, instead of showing some intent to make good on the advice, the Modi government chooses to live in denial and wallow in its own propaganda about an imaginary 5 trillion dollar economy. Economists say that India will have to grow at 9 per cent in each of the five subsequent years to become a USD five trillion economy – USD 3.3 trillion in the financial year 2021, USD 3.6 trillion in FY22, USD 4.1 trillion in FY22, USD 4.5 trillion FY24 and USD 5 trillion in FY25. For this to happen, a massive flow of investment is required in the sectors that have collapsed after the lending crunch crippled many businesses in the last 3 to 4 years. The Modi government seems to have no workable plan to provide a significant stimulus to the slowing economy. The first quarter of 2020 GDP print at 5 per cent is clearly a shocker and confirms that the growth slowdown is more entrenched. The growth slump clearly reflects that the slowdown is beyond just cyclical aspects. Economists, including former PM Dr Manmohan Singh, have openly said that policymakers need to address the structural constraints to ensure the required growth. But at a time when financial indicators are ringing like an alarm bell, Narendra Modi and his team seem clueless in focusing on its primary goal of setting the basics right and are instead going ahead with a band-aid patchwork. Modi years will be remembered for their economic slowdown, the shocks of demonetisation, the agrarian distress and the big job scare. Two of the government's most famed economic reforms – demonetisation and GST implementation – have been identified as major factors behind the slump in growth in many reports and surveys. The most unfortunate part of the problem is that the Modi government does not want to accept that there are problems on the democratic freedom front or especially on the economic front. Unless Prime Minister Narendra Modi acknowledges these facts, corrective measures cannot be undertaken. He is averse to taking the first step in fixing a problem. A journey to make a real impact that changes the lives of people gives meaning to life and turns the collective vision of the masses into reality demands true focus, utmost zeal and an unfailing tenacity to do whatever necessary within the powers and reach of a true leader. But a leader who has lost the trust of the country can no longer govern. He is destined to become a failure with every passing day. Alas! I am witnessing Narendra Modi walking this path.

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