Economic Highlights

New Delhi, 7 August 2015

Seven Lost Decades

WHERE HAVE WE ERRED?

By Shivaji Sarkar

It is time for stock-taking. India is completing 68 years of freedom from colonial rule. August 15, 1947 was supposed to be the fulfillment of a dream for self-rule, freedom from poverty, affordable if not low prices, industrialization, rapid growth and pride. Pride we have despite inability to achieve either of these.

Our dependence on the West that should have almost been minimal has increased. The planning of Jawaharlal Nehru, socialism of Indira Gandhi, liberal globalism of Manmohan Singh has virtually taken us nowhere. Disparity and poverty has increased. Almost double the population at the time of Independence suffers from absolute poverty now. Crony capitalism thrives and taxes remain at a socialistic high. How would you explain robbing people, earning around Rs 22,000 a month, 33 per cent of their income in direct taxes?

The British ensured that we produced nothing and survived on cheap exports mostly raw materials to sustain their industry. Sadly, that remains the policy till today. Except sundry items our exports comprise mostly of raw minerals, handicrafts, gems and jewellery, readymade garments, basmati rice, cotton yarn, vegetable juices, some other agro products, meat, essential oils, stainless steel, bit of pharmaceutical products, low-cost machinery, transport equipment and services. At $757 billion, it remains mere 1.7 per cent of global trade almost equal to 1.4 per cent way back in 1951.

The nation without any doubt is not changing. The fashion is to blame the present government. That is obvious. But this NDA government certainly is not responsible for accumulation of muck of the past seven decades. In reality, all non-Congress regimes had herculean tasks of freeing the country of the misrule of previous regimes.

The Janata Party government--1977-1979 -- had to busy itself in correcting legal and other misdeeds done during the Emergency, 1975. The Janata Dal government of VP Singh was a victim of contradictions, many say stoked subtly by Rajiv Gandhi’s Congress that was thrown out of power in 1989. The 1996-98 United Front and 1999-2004 Atal Behari Vajpayee’s NDA governments were able to contain the scams and corruption. In fact, Vajpayee’s moves did put a check on prices and black money, which is a major irritant today.

But before Vajpayee could do much more, the Congress bounced back once again. Then began again an era of inflation, scams, corruption, policy paralysis and showering of bonanza to industrialists (not industry); something this country had done since Independence. Nehru was misdirected to believe that rapid industrialization and licence-permit rule would ensure growth and the farm sector could be overlooked. It only fortified corruption and official- industry nexus.

In reality, corruption was institutionalised unfortunately by Indira Gandhi. She had said, “Corruption is a global phenomenon” at the height of the Jayaprakash Narayan’s Sampoorna Kranti, a clarion call against rising graft.

With assiduous efforts what India had achieved in import substitution and creating a manufacturing base for many goods was lost with the acceptance of five billion SDR loan from the International Monetary Fund (IMF) by a “reformed” Indira. Gradually, it led to the severe balance of payment crisis forcing then Prime Minister Chandra Shekhar to mortgage gold with Bank of England, in 1990.

It followed with the pernicious Manmohanomics that virtually wiped out whatever little manufacturing base this country had created. The so-called opening up of the economy was the beginning of neo-colonialism, which till this day this country finds difficult to get rid of. Not surprisingly even the shaving blade and soap are now once again being manufactured by multi-nationals by wiping out the indigenous manufacturers.

The latest socio-economic survey reveals that the Government led by a particular party only had misdirected priorities and in seven decades absolute poverty increased. Families in these days of high inflation subsist on an average monthly income of Rs 5,000. Agriculture and rural population suffered the worst. The then Planning Commission wizards ignored the vital farm sector that supports at least 54 per cent of the population, over 75 crore. This neglect led to stagnation, if not fall of the industry and abysmal conditions for the rural-agro sector.

The other sector that suffered the worst is the working class. None -- Nehru, Indira, Rajiv Gandhi, Narasimha Rao or Manmohan Singh -- cared for them. A bogey was created that labourers had failed the industries, ignoring that industrialists in 1950s, 60s or 2010s have not paid trillions of rupees due to the workers while gobbling up Rs 42 lakh crore ‘incentives’  for the 2008 western crisis that did not touch this country. A mere Rs 2.5 lakh was allocated in the last ten years, not actually spent, for the rural and agro sector.

The workers died but not one industrialist was prosecuted. The industry even did not pay sugar or cotton farmers’ dues. So farmers were forced to commit suicide or died with their families of severe starvation. Industrialists, again not industry, robbed the banks of over Rs 3 lakh crore. The story of exploitation is too well known.

India tried to ape the West, which is now collapsing for its unethical economic practices. The western workers, farmers, consumers are the worst sufferers. Their lifetime savings, pension funds were all robbed of by the unscrupulous corporate, whose profits soared.

But for the government recapitalizing banks with people’s money, Indian banks are in no better shape. The poor small defaulters’ properties are auctioned but large borrowers sing the song. It is not good economy. India has to come out of this syndrome. A change is must.

India has to be a harbinger for ushering in people-oriented economy. The last man has to be the decision maker, not a mere receiver. Policies have to be reoriented from the present industry-investment orientation. The individual has to be enabled, just not empowered. A strengthened rural family would not seek doles. Each individual and his family have to prosper, an essential for the prosperity, not just growth, of the nation.

People expect Prime Minister Narendra Modi to take care of these at the 69^th Independence Day address. His last Red Fort speech had promised seven things, including Jandhan, Make in India and Swachha Bharat. This time people want him to address the issues of the rural sector in a sharper way and create the indigenous strength. The path, in the face of sharks which have penetrated different political parties and bureaucracy, is indeed not easy. But people are made to believe Modi can write the new economy that would not be a copy of the West as a road to real prosperity. Will he be able to deliver or remain just selling big dreams? --- INFA 

(Copyright, India News and Feature Alliance)