Monday, February 23, 2015

Let us fasten our seat belts

23 February 2015, New Delhi, Pankaj Sharma

Nine months of non-delivery by the Centre leaves our economy in a precarious situation

The wave of expectations has begun to dip. Cracks are appearing only nine months after Prime Minister Narendra Modi swept the 2014 Lok Sabha elections, which many saw as a definitive mandate for two terms. Nobody expected the first nine months of the ‘Modi Sarkar’ to be as unproductive as it has been.

 It is a serious commentary on the present dispensation, when only nine months after Modi became Prime Minister, industry leaders begin to bemoan the lack of discernible action on the ground. The present dispensation has been rather lucky though, with global oil prices down to $50 per barrel from around $120 in June 2014. There has, however, been no change on the ground and no improvement in the ease of doing business.

The Indian investment climate is passing through a critical phase. Growth is facing a negative trend. Most private business entities are under stress. Many companies have reported a sharp fall in profits for a third straight quarter, which ended in December. Prime Minister Modi convinced the country during his campaign for the general elections that here is a man who has the capacity to deliver the unimaginable. Nine months of governance under this “man of action” tell us that none of his promises have translated into greater revenues for industry.

Modi’s promise to push India among the top 50 countries in the ‘Ease of Doing Business’ index has shown no signs of attaining fulfillment.  Only in October 2014, India notched up its worst-ever ranking in the “Ease of Doing Business” index compiled by the World Bank, slipping to 142 out of 189 countries. Financial experts have begun to raise doubts over the success of Modi’s ‘Make in India’ initiative, since many feel that the Centre has failed to fast track the process of decision making.

Manipulating data related to the growth in GDP figures for any given quarter by switching the base year of calculation cannot hide indicators that point to continued slack. Statistics should never be given to political manipulations. Unless we stop judging our economy by GDP figures, we cannot develop real capabilities. This is not to say that growth is unimportant. Growth is very important for a country like ours, which is still battling against malnutrition, illiteracy and social deprivation. In this regard, however, until now, the BJP-led government at the Centre has a very disappointing record.

We will have the first full-year Budget of the Modi-led government in a few days, the outcome of which will indicate its seriousness in continuing the foundation of sustainable growth laid down by the Congress-led UPA regime. Although India needs economic reforms, the Centre cannot ignore social welfare schemes. To smoothen the road for industrial growth, the present dispensation cannot leave the agriculture sector to its own fate. Any such move would be harakiri. Although the government needs to streamline a raft of laws to induce greater foreign and domestic investment, leaving millions of employees in the organised sector at the mercy of one sided contracts is not right. The Centre must also spare a thought for the plight of those workers in the unorganised sector.

Nine months of the BJP-led government tells us that the Prime Minister has been unable to walk the talk. In the name of cleaning up India, he picks up a broom instead of implementing time-tested policies. It is better for Modi and his party to realise that you cannot spoon-feed your audience in the 21st century by merely waving symbolic flags.

By redrawing the contours of social expenditure, encouraging states to formulate policies that kill public sector power companies, encouraging high-level fraud in the irrigation sector and ignoring the farce done in the name of increasing exports, the present dispensation is bound to harm the basic roots of our socio-economic structure. 

There are reports that Modi-led government is planning to cut the agriculture budget by Rs 16-22,000 crores. Reports have also suggested that the government has slashed spending on MNREGA. There has been no policy to free the education sector from the private mafia’s clutches. There has been a phenomenal increase in the price of life saving drugs in the last nine months. The Modi-led government is succumbing to pressure from US President Barack Obama’s desire to kill the Indian generic medicine sector. The BJP’s desire to somehow form a government in Jammu & Kashmir with the Peoples Democratic Party is being conducted at the cost of political ethics. The way the party tried to play its game in Bihar by extending hidden support to former chief minister Jitan Ram Manjhi has also raised several questions.

I am afraid that if this is the beginning of Narendra Modi style of political grammar, which will push the nation through rough weather. This is a time when the country should fasten its seat belts.

Author is editor and CEO of News Views India

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