20 - 06 - 2019

The murky path to a hope in 2019

The year 2019 comes with hopes but the path is murky. Economy needs a new path, resuscitation and people-oriented policies.It’s time to rethink.

Manmohanomics has failed the governments and the people. The BJP that followed the Manmohanomics is wondering whether it has lost the way or not. The Congress does not know what the economic outlook should be. 

No political party has been able to spell out a new vision. None yet has a plan for resuscitating the economy. The regional parties are fighting a battle of existence be it TMC, TDP, BSP, SP, or the Left. None apparently has an ideology. 

Nobody has a plan for the farmers, for the people, for boosting production, increasing purchasing capacity, strengthen the rupee and reducing petrol prices when international prices come down. People of India are in a quandary. They do not know who would have a plan for the farmers or how to reduce the influence of corporate that has ruined the banking system and caused rise in prices. 

Education is becoming expensive every day. It is causing severe uncertainty and negativity among the youth. Jobs are eluding them. There is no plan to cleanse the education system. 

 High tuition fee, high coaching costs and fleecing of students by private universities have become the norm. Some such universities or institutes levy indiscriminate financial penalties, which in many cases are at least half of the tuition they are supposed to pay. The ensuing elections would bring a mere ‘interim’ budget. People may know the figures but not its import. 

Indians are wondering whether economy is liberated or under control of the government as the new RBI governor Shaktikant Das says. They are failing to understand why the government needs to have slices of the RBI assets, over which no government has any claim.

The society is now discussing why banks should give any dividend to the government, which is a mere custodian of people’s deposits. As per good banking practices, earnings should be reinvested to incentivise the depositors and not be given to anyone. The taxes despite reduction in GST are at high levels. Tax on income is being paid by the lowest paid employees or other small businesses. High taxes and tax terror are stymieing economic activities.

It is also being asked how corporate social responsibility covers funding for sculptures. While on the one hand the petrol prices are being increased and so the taxes, profits of oil companies phenomenally rise, how come they are funding activities that are neither related to business nor social good?

Overall quality of life is deteriorating. A Gallup survey in September, 2018, finds that Indians’ ratings of their current lives nationwide are the worst in recent record, an average of 4.0 on a 0-to-10 scale in 2017 – down from 4.4 back in 2014.  The Gallup survey finds decline in the percentage of Indians who rate their lives positively enough to rate it as thriving. Only 3 percent of Indians consider themselves thriving in 2017 compared to 14 percent  in 2014.

The living family wage in India remains almost flat in the Rs 17300-17400 a month or years. Wages paid to low-skilled workers decreased to Rs 10300 a month in 2018 from Rs 13300 in 2014.

Food has become expensive even in rural areas. “Beginning in 2015, rural Indians began reporting increased difficulty paying for food,” says the Gallup report. Over 28 percent rural Indians reported not having enough money to pay for food at some point that year. About 18 percent urban people reported similar hardship. It has increased every year. About 41 percent of rural people and 26 percent in urban areas said they were not able to afford food in 2017.

The Gallup survey supports the rural dismay. Suicides by farmers continue. Debt level remains high despite loan waivers. No mechanism has evolved for paying remunerative prices to the farmers. Even the difference between MSP and the actual prices that they were getting called ‘bhavantar’ in MP and Chhattisgarh did not mitigate their woes. 

Post demonetization cash crunch has caused severe distress. But officially there is growth. The IMF World Economic Outlook predicts  Indian economy will grow at 7.3 percent in 2018 and 7.4 percent in 2019, up from 6.7 percent in 2017. It is projected to be higher than China’s economic growth at 6.6 percent in 2018 and 6.2 percent in 2019, down from 6.9 percent in 2017. But the volume of Chinese economy is many times larger than India’s.

The New Year does not seem to make much of a change whatever the poll outcome. The nation is looking for a solution. Would 2019, before or after the polls find out the cherished path? It is not easy. The US withdrawal from Afghanistan and Syrian would pose new challenges. 

The country needs a politico-economic vision and not rhetoric. The new generation politicians irrespective of their affiliations are clueless. The distrust in them is reflected in the high number of votes polled as NOTA in the recent state assembly polls. The voters do not want anyone or feel everyone is equally ineffective.

It is a sad statement on the lack of vision across the political spectrum. If people are drifting away to the opposition conglomeration, it indicates not a gain for any party but the lack of an alternative.

The visionary alternative which could be the people’s choice is not there.

That is the crucial issue. The election is still over two months away. Could there be a change? But if the manifestos of 2014 are any indicator, it seems manifestos are mere “jumlas” and have lost most of their meanings. The promises are not delivered. The reforms are for the corporate and not the people.

More the reforms and more the slogan of make in India, the country is being flooded with foreign produced goods, high profit repatriation, high trade deficit, job losses and a crisis of confidence despite higher government expenditure.

The erstwhile Planning Commission at least was guiding to a path, NITI Ayog seems to be still looking for one. Nobody today knows what would be the path to revival of economy. 

That is the hope. The 2019 may become a watershed in Indian politics and who knows a new leadership and vision may emerge out of a hopeless situation.