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A DECADE OF MODINOMICS: A REVIEW (Part 3)

By Varun Hari Prasad

The Finance Minister Mrs Nirmala Sitharaman presented a White Paper in the Parliament on the Indian Economy. Usually, White Papers are well-researched & academic documents. But the document tabled by the Finance Minister turns out to be a political document which does nothing but accuses the previous Government of economic mismanagement and hides the failed promises of the present dispensation.

Any unbiased and academic document should have started from the Balance of Payments Crisis (that started in late 1980s) and ended with impact of COVID-19 on the Economy. But this document fails to do so.

The Promise of ‘Ache Din’

The BJP led by Mr Narendra Modi promised ‘Ache Din’ (Good Days) to the people of India if they were voted to power. Some of the promises were:

  • ·         Bringing back black money stashed abroad within 100 days of assuming office
  • ·         Providing a portion of the black money through from abroad to tax payers
  • ·         Providing 2 crore jobs per year
  • ·         Doubling Farmers’ Income by 2022
  • ·         House for all by 2022
  • ·         100 SMART Cities
  • ·         $5 Trillion Economy by 2023

Perhaps no Government in the history of Independent India has dismissed their own election promise as a ‘Jumla’.

UPA vs. NDA: A Comparison

The Congress-led UPA Government of Dr Manmohan Singh left behind a big legacy of lifting nearly 27 crore people out of poverty with various rights based schemes. The Modi Government will carry the baggage of letting nearly 4.7 crore people have slipped into extreme poverty due to its badly conceived policies such as demonetisation, mismanagement of COVID crisis, etc.

The Prime Minister promised to be the ‘Chowkidar’ (watchman) of this country. In the run-up to the 2019 Lok Sabha election, the BJP ran ‘Main Bhi Chowkidar’ campaign. It is very saddening to note that under the watch of the same Chowkidar, bank frauds to the tune of 5,00,000 crores have taken place. People like Vijay Mallya, Nirav Modi and Mekhul Choksi have fled the country and the Government has still not been able to get them back.

While the Dr Manmohan Singh Government waived farm loans amounting to 72,000 crores, the Modi Government will leave behind the legacy of writing off bad loans (not waivers though) worth about 14.56 lakh crores.

The BJP always asks for an account of the past 70 years. Just to give them an account, in the past 67 years, all the Governments put together took a debt of 58.6 lakh crore. Modi Government, in just ten years, has taken a debt of 173.3 lakh crore.

The percentage of targeted schemes for SCs out of the Central Schemes and Centrally Sponsored Schemes is just 4.4%. The National Scheme of Incentives to Girls for Secondary Education (NSIGSE) which provided incentives to SC and ST girl children has been discontinued.

While the Congress Government worked towards prohibiting manual scavenging and their rehabilitation by enacting a Law, 376 people died while cleaning sewers or septic tanks between December 2015 and December 2020.

Betrayal of Farmers

During the 2014 General Elections, BJP released its Manifesto. I quote a paragraph from page 27 of that Manifesto:

“Agriculture is the engine of India’s economic growth and the largest employer. The BJP commits highest priority to agricultural growth, increase in farmer’s income and rural development. The BJP will take steps to enhance the profitability in agriculture by ensuring minimum 50 percent profit over the cost of production.”

In that elections the BJP stormed to power winning 282 seats on its own, a first in 30 years. Around nine months after this emphatic victory, on 6th February 2015, the government filed an affidavit before the Supreme Court in a case titled ‘Consortium of Indian Farmers Association vs. Union of India’. Paragraph 4 of that affidavit reads as follows:

“It is reiterated that MSP is recommended by CACP (Commission on Agriculture Costs and Prices] on objective criteria considering a variety of factors. Hence, prescribing an increase of at least 50% on cost may distort the market. A mechanical linkage between MSP and Cost of Production may be counter-productive in some cases”

This stand taken by the government in the Supreme Court was a clear U-Turn from its election promise. Three years later, in 2018, they took another U-Turn and announced Cost+50% as MSP but they have not brought a Law to guarantee MSP for Farmers.

Unemployment

In 2012, total unemployment (of all ages) was around 1 crore but rose to 4 crore in 2022. During UPA Government, the around 75 lakh non-farm jobs were created in the economy every year between 2004-05 and 2011-12. From 2013-2019 this number reduced to around 29 lakh. The Labour Ministry data points out that unemployment rate was 6.1% in 2018-18.

I have quoted these two data points to highlight that unemployment was a pressing concern even before COVID pandemic began.

Adding to this concern is the consistent fall in the Labour Force Participation Rate (LFPR) since 2016-17. The most worrying thing is the LFPR for women was at just 8.8% in 2022-23.

All this stays while the Government says we are the largest growing economy.

Inflation

Mr Modi came to power promising to control rise. The table below shows his government’s performance in controlling price rise:

 

LPG

Petrol

Diesel

Mustard Oil

Atta

Milk

2014

410/- cylinder

71/-litre

55/-litre

90/-kg

22/-kg

35/-litre

2024

903/- cylinder

97/-litre

90/-litre

143/-kg

35/-kg

60/-litre

% increase

120%

37%

64%

59%

59%

71%

*All prices are in Rupees

Demonetisation

It is amusing to know that the White Paper does not even mention Demonetisation. None of the goals announced by the Prime Minister were achieved through that disastrous move. Cash in circulation has gone up from 16 lakh crore in 2016 to 34 lakh crore in 2023. Cash to GDP Ratio has increased from 11.6% in March 2014 to 12.7% in 2023.

The Government must apologise to the Nation for the damage it inflicted through this policy. Over 15 lakh jobs were lost in the first quarter of 2017-18 (mostly in MSMEs) and over a 100 people died waiting in lines to exchange currency notes.

Also, the Prime Minister must tell us the logic behind bringing 2,000 rupee notes and scrapping them.

Conclusion

The Finance Minister must remember one thing: the people may forgive the Government for inflicting all these damages but they will certainly not forget the hardships they have faced.

So, no White Paper can brush aside the monumental blunders of this Government. I hope the people’s verdict in May 2024 will endorse this.

 

 

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