Economic Highlights
New
Delhi, 8 September 2012
Economic Catastrophe
TIME TO END APATHY
By Shivaji Sarkar
India is sadly becoming the
most expensive economy. A growing concern is whether it is heading towards a
catastrophe? Every week, growth is falling as per Government statistics.
Inflation is rising. Prices of every commodity are going beyond affordable limits.
Ironically, the only stability seen is in wages,
which do not rise! About three years back Rs 50,000 a month salary was
considered good if not high. Now it has reduced to the bare minimum level. With
chances of minimal raise, a wage earner feels doubly harassed. He is unable to
save anything for his emergencies. New jobs are not being created. Worse, more
and more of these are not even having subsisting wages.
The sellers of all services and goods are on to
profiteering. They are hiking “user charges” almost on everything except
possibly walking. The common man has nobody listening to him with both politicians
and the business class aligning against him. This is clearly a danger signal. The
common man feels exploited at every point and he has no remedy before him.
The electricity charges have quadrupled, and in some
cases more, during the past about six years. Petroleum products are costing almost
twice. Toned milk prices have increased by three times from around Rs 12 a litre to over Rs 40 now. Even
banks, which were the most affordable and accessible, are levying atrociously
high fees.
Commuting is becoming too expensive and unaffordable
for an average wage earner. Highways, which used to charge nothing, have
increased toll charges by over 1.5 times. Municipal toll charges in cities like
Delhi have in
some cases more than doubled. Even the metro and bus fares have been
“rationalised” in a manner to extort almost double. Simultaneously, all other
transport modes have become expensive.
All food items are costing more every day. Fruits,
eggs, fish, chicken and mutton are becoming the rich man’s food. The poor man
is finding it difficult to even afford his basic diet of dal-roti. Pulses for generations the staple protein supplement for
the poor is beyond reach. He has virtually given up buying edible costing over
Rs 100 a
litre. Even wheat and rice is not easy to afford. Textiles of all varieties are
a heavy burden. Statistics show that people are barely purchasing these. All
other white goods are gradually being shunned by people.
An average doctor’s service that was available for Rs
50, five years back now has been hiked to not less than Rs 200 a visit. Medicines costs
thrice. The Rashtriya Swasthya Bima Yojana (RSBM), which was supposed to have
taken care of the poor man’s health, has become the easiest way to exploit him
and force women particularly to undergo unnecessary surgeries to fatten the
coffers of private hospitals.
Indeed, the common man is terribly squeezed. His
complaints are not heard and he is feeling desperately helpless. The refrain of
every wrong-doing department from telephone to power or any other is “first pay
then complain”. It is resulting in more exploitation.
The discontent is seething. People are anguished. The
official reaction to all of this is that it’s a phenomenon and thus are supposed
to do little about it. Obviously, they are well paid and certainly have the least
concerns of the woes of the people. The disconnect between the bureaucracy and
people has been always very wide and now its sheer insensitivity, particularly
combined with the apathy of the political leaders, is causing havoc.
The country needs to understand that this phenomenon
is not restricted only at the Centre. With the exception of one or two States,
this has become universal. The focus of the country on so-called reforms and
investment has diverted attention of all those concerned from the basic flaws.
The system cannot remain exploitative. Indifference cannot be the bedrock of
administration or governance.
Increasing deficit, Government borrowings, to 6 per
cent of GDP, is again bad news. The Government needs to go into its root. Often
it is blamed on subsidies. In reality more the deficit, the more the Government
is increasing the number of bureaucrats. This needs to be drastically cut.
The deficit, which would now be about 50 per cent the
total yearly budgetary figures, has international ramifications. It is
affecting India’s
rating across the world. The Reserve Bank of India
Governor D Subbarao has warned on August 30 that India must prepare for a downgrade
in its credit rating to junk status and an outflow of investments thereby. Foreign
media wants the country to lift the flagging economy and get its fiscal house
in order. Earlier this year, Standard & Poor's and Fitch Ratings cut
outlook on India's sovereign rating to 'negative' from 'stable' on a loose
fiscal policy.
If the country is keen on a reversal it has to take
care of the basics. It has to turn the economy around and make it affordable.
In other words, people are keeping off economic activities. Their participation
has become minimal. Mere investments do not ensure that people join the
economic activities.
The common man has to be invited back to the
activities by making all commodities and services within his reach. If he is
able to afford – because he has a job and a wage that neutralises the costs –
the economy would start booming.
However, this cannot be done through artificial
measures, howsoever populist these might be, like MNREGA – the rural employment
guarantee scheme. It adds to Government deficit, leads to leakages and creates
a generation of lethargic population living on doles. It also adds to the cost
burden ultimately on the citizens, including the beneficiaries of these
schemes.
The prime focus of all Government action has to be
the reduction of costs of all services. The high toll charges on highways have
started affecting mobility and increase in cost of transportation. Can the
nation not do away with it?
The atrociously high power charges have become
another deterrent. So are prices of many other commodities. Ignoring this, no
country can expect to progress. India,
which had attained its independence to free its people from exploitation of
foreign occupation, is apparently succumbing to pressures of the lobbies that
are capturing all resources to increase their profits.
People vote to either bring in a Government or to get
rid of it. If change does not happen, sooner or later, there would be a
reaction. As it is, the country is hearing growing rumblings in the form of agitations,
protests and even increasing naxal
violence. Let the country start the basic reforms for which there is wide
mandate and political consensus before India slips into an abyss. ---INFA
(Copyright,
India News and Feature Alliance)
|