Economic Highlights

New Delhi, 14 March 2014

The Great Loot

NO MORE MANMOHANOMICS!

By Shivaji Sarkar

Daunting tasks remain for the country’s new prime minister. The last ten years of virtual non-governance have taken the country down the hill almost in on all spheres. It would not be easy for even the strongest person to ascend the coveted chair to take the country out of the morass. People want a break from Manmohanomics.

The problems are multifarious. Job opportunities are shrinking, poverty is rising – statistics do not picture reality, manufacturing and industrial growth touched the bottom, farm sector is facing too many odds, education and real estate have become expensive and galloping inflation makes people squirm every day. As living becomes expensive, opportunities shrink, corruption rises– this is snatching someone else’s lawful rights.

Indeed, it is a complex task. The new government, whichever one it may turn out to be, would have to come up with a new vision and iron-fisted governance. It cannot be enamoured with the Mumbai stock sensex rising to 22000. That is no index of performance of the economy, as sensex is gambling by the richest to create an illusory world for the deprived.

Public-private-partnership model of economy of Manmohan Singh, the CAG has testified, has not only failed it has led to loot of public (government) assets by private (corporate) virtually with the least or no investment. Airport and highway (toll) developments, petroleum basins, coal blocks, spectrum and private insurance are the stark instances of private corporate models for continuously robbing the poor citizens to satiate the greed. Sahara and Sharadha are no exception even there are Religare types of mafioso.

It has also led to the collusion between the bureaucracy and the corporate evidenced in the latest court hearings on Neera Radia links. Vast stretches of land in Uttar Pradesh, Haryana, Andhra Pradesh, Karnataka and where not, have been handed over to the rich for a song. Yes, the political leaders be it the SP, BSP, DMK, Chavans, Reddys, have also benefited from these deals.

The robbed were poor tribal people (as in Niyamgiri in Odisha) or poor farmers as in the Ganga valley, where only one company holds the jagir for all lands in 1000 km stretch in UP from Noida to Ballia. It is so in many other so-called developing States. Would the new prime minister be able to reverse it?

Food and other prices are being continuously manipulated by a combination of large corporate cartels. The liberalization of their operations has caused prices to soar by over 42 per cent in less than four years. Pre-poll “fall” of price index to around 8 per cent is actually over the continuing inflation. Wages, according to estimates, have not risen to match it. Official figures say wages rose by around 11 per cent in all these years. India Inc has projected an average salary increase of 10.3 per cent for 2013, according to the Annual Salary Increase Survey by Aon Hewitt.

Those in unorganised sector even do not have this “luxury”. No wonder some international rating agencies like Moody’s have questioned the Government’s claim of alleviating 14 crore poor. The rating agencies hint that almost that many people have become poorer.

Rising salary is not a solution. It increases costs and pushes up inflation. The solution lies in bringing down the prices. The Government has enough teeth to do it. One wonders whether the new government would act for the country and its people or the coveted large conglomerates.

The pricing of petroleum, the so-called under recoveries, pegging indigenously produced gas price with international ones, consequent high fertilizer and many other linked up products virtually put the blame for commodity and transport cost inflation on government decisions. The bureaucracy (mis)guides the political masters and they fall for it. The voters do not want such masters. They also want de-bureaucratising decision-making. Induction of large number of bureaucrats by political parties does not boost the confidence of the people.

The farm sector is surviving because of individual entrepreneurship despite rising input costs. High inflation has hit them hard but the farm produce does not get the required price as suggested by the Swaminathan commission. Corporatisation and futures’ markets have created speculation supported by the UPA Government mechanism. No political party theoretically opposes it.

Rural voters are being edged out. Their sufferings have increased. Despite MNREGA, the exodus to ill-equipped cities has not stopped. Does any political party have a programme to address this? Economic advisers, such as former Planning Commission member Raja Chelliah, had even admitted in 1989: “We have to give up our preoccupation with industry and concentrate on agriculture”. This has not happened.

Is there really a demographic dividend? In reality, it has meant increased supply of cheap labour to high profit earning corporate. The course durations and costs of education have quadrupled. Large number of youth is burdened with high debt even before they are into jobs. The government has remained a silent or rather a collusive spectator. The gap between the people and the Government is widening. The people cry. Nobody listens to them as bureaucrats are inaccessible and politicians listen but do not act. Would that change Indian economy?

Ill-conceived policies and succumbing to western pressures for allowing virtual free import of goods under WTO have led to virtual outsourcing of manufacturing to countries such as China and South Korea. India now produces nothing except cars of foreign makers. Industries are gasping. Entrepreneurship is diminishing. This is certainly not the way for survival. Growth is a misnomer.

Since 1991, it is being said that bias would be towards employment generation. It has only shrunk. Pumping in money has not solved problems. Poor pay high taxes, salaried pay it through their nose, the rich gets away. High taxes have stymied activities. One hopes the new regime makes India the least taxed country.

The banking sector, supposed to have been the strength of the Indian economy, is gasping. High losses, called Non-Performing Assets, for the past four years have increased the risk to the people. It may bust unless strong steps are taken. It is a tinder box. High hopes are pegged on the new regime that takes over after Lok Sabha elections. Everyone wants to see how it acts to create an El Dorado and adds a new paradigm. --- INFA

(Copyright, India News and Feature Alliance)