How Modi government crippled the Indian economy
The ruling dispensation has now come down to manipulating statistics.
2019 is an important year for the country. After five years, the citizens will get a chance to elect the government at the centre. People of this country voted for the BJP in 2014 with a hope that the country’s fate would change.
For the first time, in three to four decades, one party received such a majority that it was in a position to accomplish many targets it had set up for itself. Unfortunately, looking back, there is nothing but disappointment.
In the run-up to the 2014 elections, Narendra Modi spoke at length about the “Gujarat Model”. It led many to believe that this was one of the ideal models of development. However, the reality is something else altogether.
In essence, this “Gujarat Model” was not so much a model of development – but that of control. It was the same model Modi pursued with a vengeance when he was the chief minister of Gujarat.
As chief minister, he seized control of all departments instead of managing the respective ministers. Together, the Modi-Amit Shah duo, after 2014, brought this Gujarat model of control to Delhi.
The Prime Minister’s Office became the centre of power, where crucial decisions began to be taken.
BJP’s internal democracy was crippled. Nobody was allowed to speak freely. Whatever Modi-Shah say, happens.
All ministers have been rendered largely useless. They cannot exert their influence within their own ministries. Then began an effort to disable Parliament. Then came the turn of the Supreme Court, followed by the Election Commission, the RBI and CBI.
Prestige and power of each of these institutions have been demolished. It was only then that it dawned upon us that democracy itself is under threat.
We used to believe that the previous UPA government was crippled in terms of decision-making. Lack of decisiveness delayed many projects and due to which loans taken by them turned into non-performing assets (NPAs).
The finance minister conceded in the 2014 Economic Survey that there are more than Rs 2 lakh crore in NPAs. We hoped that this government would first concentrate on fixing the banking system.
New projects and investments are mostly done by the private sector. Banks are meant to give loans to make these investments. But when banks are in such a dire situation, they stop giving loans.
The government didn’t invest the money, saved from reduced prices of petroleum. It was instead spent on revenue expenditure. The result: projects that were halted are yet to restart.
When the global economy was marching ahead, ours began to slide. Instead of exports growing in India, they in turn began to go down.
In this context of increasing economic turmoil, instead of solving the existing problems, the government gave a body blow to the economy by implementing demonetisation in November 2016.
It affected the economy so harshly that the cost incurred has not been calculated yet. It broke the back of small and medium scale industries. Many were rendered unemployed. The All India Manufacturing Organisation recently stated that 35 lakh people have lost their jobs since 2014, demonetisation made things much worse.
Before the country could recover from this shock, GST was implemented in a rushed manner.
Many experts recommended a single tax slab for GST, but the government did not listen. Five to six different rates were levied.
Since then the government has revised GST more than 450 times. The most remarkable part is this that although the government was actually rectifying an error committed by no one else but them, they instead presented it to the public in such a way as though they were doing a huge favour to the masses, or that they were correcting the wrong decisions of the previous governments.
We are witnessing a government that first makes a mistake, then rectifies the mistake, and then applauds itself for doing so.
Now the prime minister is conceding that 99 per cent of products should be in the 18 per cent slab of GST. So this becomes the main slab. The finance minister started to sing the same tune after the prime minister said it.
The question is: why did you reject the suggested rates? Who will compensate for the losses incurred by the people?
The government has now come down to manipulating statistics. Exaggerated GDP growth rates are being showcased. This is the first government whose statistical figures are untrustworthy.
Farmers are not getting the right prices for their products. When farmers agitated in Mandsaur in June 2017, they were fired upon and some were killed.
Farmers are getting poorer day by day. They are forced to commit suicide.
It was this rising agrarian anger that the BJP had to suffer, making it lose three big states – Rajasthan, Madhya Pradesh and Chhattisgarh - in the Hindi heartland in the recently concluded Assembly elections.
The writer is a former finance minister of India.
(The article is translated and adapted from a video column by the author for Asiaville Hindi.)