Economic Survey: Are We Underrating Modi?

Economic Survey

Amid otherwise promising data released by the Economic Survey, the farmer is unhappy and so may be the poor; the survey may not say the middle class is not excited either, but Narendra Modi-Arun Jaitley’s incremental approach to reforms does not let citizens feel the difference

The report of the Economic Survey, deemed an honest appraisal of the financial condition of the country unlike the claims made by members of the ruling party, being upbeat about the present and the future of the country must force a rethink on the part of the reformist section of the people, underwhelmed by Narendra Modi’s performance for most of his three-and-a-half years in the office of the prime minister. The middle class had been complaining for a while mainly because the services sector, which is where this class of society operates by and large, perceives that the growth here is not as palpable as that during the Atal Bihari Vajpayee years. The data released by the survey, however, lends credence to the grievance in parts as well as dismisses it in other places. Being in government looks like a thankless job when, for example, a constantly low rate of inflation does not excite the people as much as a sudden price rise stirs them. Since state loans for housing hitherto meant for the abject poor alone are now available for the lower middle class as well, competition in the private sector, already under pressure for delivering houses within stipulated periods or face the stringent law, has made this the best period for a commoner to buy a house. Perhaps the people benefited by the customer-friendly change in real estate are not among the economic commentators. The increase in the size of the taxpayer base, thanks to the controversial and hastened goods and services tax, will now enable the government to charge less per product or service per citizen. It is also undeniable that the Narendra Modi-Arun Jaitley regime keeps responding to the woes of the people well after the election to the most business-sensitive State is over. Nevertheless, as we have warned the PM-FM duo time and again, it is their incremental approach that does not let the people feel the change; once again, some tax reliefs will be offered by the Budget of this 1 February, and the small population of taxpayers will forget the solace within months. But tax and house are not everything. Before these, one needs to earn. Here, while the FDI equity inflows have gone into telecommunications and the information technology and hardware sectors, not the whole of the young population from the middle class is employed in these segments of the industry. That IT has been India’s success story and telecom has been among the best examples of a fair market is irrelevant in this argument — more so after the layoff scare in the IT sector last year. The labour ministry data on employment but remains misleading, as the low volume fails to explain how the provident fund accounts have witnessed a steep rise in numbers. In the meantime, the Economic Survey has exposed not only Oxfam’s propaganda of inequality in India but also the States whose underperformance is affecting the economy of the whole country.

The recent dip in the GDP growth should be studied in light of the 7.1% growth in 2016-17 following 8% in 2015-16 and 7.5% in 2014-15, and appreciated for, broadly, two reasons. First, at the time of the shock of demonetisation in November-December 2016, one may recall, nobody except the opposition and the crooks in society was complaining. Largely a State that languishes economically, Uttar Pradesh rewarded Modi for notebandi that, among other things, had crippled a thoroughly corrupt Mayawati-led Bahujan Samaj Party which was otherwise expected to replace the goon-infested Samajwadi Party as a sequel of an old electoral cycle in the State. Second, even when the business class was hassled by the complications of the goods and services tax, it still did not find the Indian National Congress an alternative credible enough to vote to power in Gujarat. These are issues the Economic Survey wouldn’t deal with. After all the adjustments for the disruptive and structural reform, the country’s statistical record will show more real figures hereon, which the man in the street can relate to owing to the increase in the size of the formal economy. The absence of big-ticket corruption and the plugging of the holes of transmission in welfare schemes translate to more money for the law-abiding and needy citizens, too.

The problems actually remain for a stratum and a segment of the economy: the poor and the rural. Those living hand-to-mouth wouldn’t care if the food inflation were benign, as the Economic Survey shows, because the little they produce and consume is all that there is to their economy. And no matter how much any government turns socialistic, farmers will complain as long as the market is not theirs to manage without brokers and retailers, and the price of their produce is not for them to fix. The noise over the minimum support price betrays both farmer’s ignorance and government’s deception; there is nothing to rejoice in the price recovered much after the farmer fails to sell his crop right after the harvest. Taking a massive political risk, a bold ruling party of the future must withdraw from agriculture completely after ousting all middlemen who make life hell for the crop producer. The food business could have been revolutionised by a sanction to multi-brand retail and genetically modified crops, but while this government is too scared to take on the Rashtriya Swayamsevak Sangh’s Swadeshi Jagaran Manch, its activist-heavy supporter base is almost religiously indoctrinated by misleading private websites run by lobbies that — in a clear indication towards their agenda to thwart India’s progress — never protest in the United States or Europe against either of the two policies of governments in the West. Anyway, in the absence of foreign retailers, India can surely have markets run wholly by farmer-businessmen. Once given the control of his destiny as a businessman more or less is, the farmer must be treated like a manufacturer-marketer in any other business. When this huge sector starts paying taxes, it will be yet another relief for individual taxpayers whose small numbers have been carrying the burden of a big country’s government-sponsored development works.


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