Economic Highlights
New
Delhi, 19 March, 2018
Economic Debate
REORIENT MODEL, FARMERS KEY
By Shivaji Sarkar
The economic situation is complex. So is its
understanding. India feels happy as macro data indicates an economic turnaround
but signals from Maharashtra farmers or steps to impose congestion tax or 133rd
position in the World Happiness Index are clear pointers to the massive effort
the country needs to undertake.
The global situation itself is not happy.
India with its large population and having the largest number of poverty
stricken is not in unenviable situation. It is exacerbating with increasing
protectionism and US President Donald Trump’s plan to make America great again.
Indeed, it’s an uneasy world.
Steering the country through such myriad
situation is not a comfortable job with a restive population, who wants the Government
to function like the genie. A small slip or not, leads to uncomfortable
election results as seen in Gorakhpur, Phulpur (Allahabad) and Araria (Bihar)
Lok Sabha elections.
After years of difficulties, less job growth,
problems in the farm sector, high tolls and taxes, the people do have higher
aspirations. The results in Uttar Pradesh are a surprise after the massive
investors’ summit that saw Rs 4 lakh-crore commitment from 1045 MoUs. UP Chief Minister
Yogi Adityanath was proud to announce: “We are heading towards a new UP. We are
gradually shedding the Bimaru tag”.
Indian economics or politics cannot sustain
on statistics. It needs much more. It is in search of happiness and is slipping
on that score. Disparity is increasing. Despite some recent slowdown in
inflation, overall situation needs concern.
Economists have failed in suggesting
effective ways to curb the growing inflationary situation since 2010. Consumer
price indices have risen over 60 per cent. Pay hikes are not enough to curb the
discontent. People wonder why despite crude prices stagnating around $ 60-64 a
barrel, half of what was during the UPA regime, petrol prices continue to rise
every day. The economists have created a fear psychosis among planners to rake
in more revenue forgetting it hurts the basic economics.
The Government has now better connectivity
with the people. It needs to realise that all government and semi-government
organisations such as municipal corporations, panchayats, oil companies, NHAI,
banks, electricity, water boards and other utility services are perceived as
extortive, indulging in profiteering and greedy. Every paisa they earn adds to
inflation.
India has the most unstable price regime.
While boasting of ease of doing business, the country needs to keep the prices,
not through artificial means, affordable. Wages must rise, as now bankmen are
demanding, but economists have to devise a long-term solution as to remove the
basic reason for that. Prices must remain stable and greedy government
organisations must be put on leash.
India is not Singapore -- a 700 square
kilometer of land area. Bureaucrats who suggest congestion tax on its model
forget the level of affluence there and the highest number of poor living in
the national capital of Delhi. They are unaware that Delhi metro is
unaffordable for slum dwellers. Is there logic of charging toll of Rs 100 per
entry for a taxi (used by people under compulsion) and higher rates for goods
vehicle? The economists do not realise that ultimately toll charge is paid by
poor consumers and increases price of every commodity.
While taxing all sales under GST, they forget
that most Indian small businesses’ profit is limited to whatever tax they can
save. The so-called “tax evasion” is a compulsion in a country with a complex
multi-tax regime. Despite the GST, States are continuing with excise and so
many other levies that are supposed to have been subsumed by GST. The GST
Council has to look into it.
Piecemeal solutions have led to political
quagmire. The country forgets that in October 2012, thousands of poorest of
Indian farmers from Kerala to West Bengal to the North-East gathered in Gwalior
for marching to Delhi. Veteran activist PV
Rajagopal, who organised the yatra, and made his name negotiating
the surrender of bandits in MP in 1970s, then had said that the participants’
aim was not just to win a ‘right to land’ but to fundamentally alter the
direction of India's development.
“There is conflict at every level with the model we have now.
Gandhi's vision in this country is being rejected every day. Now we have a
capitalist, consumerist model. If India does not change this, the writing is on
the wall,” he said. However, a similar but smaller march in 2007 had had an
insufficient impact.
There are many who may argue that such views are naive and that
India's development – and therefore the eradication of poverty -- depends on
urbanisation, massive investment in infrastructure and the development of a
manufacturing base capable of providing employment for huge numbers of people,
especially the young. But six years later, in March 2018, again 35,000 farmers
marched from Nashik to Maharashtra secretariat in Mumbai after a 180
km-weeklong-trek for the same demands and protection of their livelihood.
Since the CPM-led All India Kisan Sabha (AIKS) was behind this
move, it is being perceived as that the Left still possibly is not irrelevant
in Indian politics despite their decimation in Lok Sabha. The reality is most
farmers, 70 per cent of them debt-ridden, are not AIKS members but they hold
the key to change the political direction. The farmers needed someone to organise
and help vent their grievance. If Bharatiya Kisan Sangh had taken the lead they
could have gone with them too.
This raises the fundamental question on country’s economic
model. There has been a clamour for changing that model within the Congress in
2012. The echoes could be heard today in all other parties. Yes, India has to
plan for happiness and not just growth. The Narendra Modi Government has the
opportunity to reshape the country’s economy on Gandhian principles or
Deendayal Upadhyay’s integral humanism - ekatma manavavad.
The present growth model has benefited a small population and
caused deprivation for a larger number. If Donald Trump has to be defeated in
his global trade war, it can be done by uplifting India’s poor farmers, who
have the capacity to be the pivot of the economy, a factor the liberalised-globalised
world ignored.
Let the country debate but act fast to reorient the economic
model. Farm distress is a socio-politico-economic reality. It calls for change
in the price-tax regime and a real equitable society, where the food grower is
given respect, better livelihood and not doles in the name of waivers. ---INFA
(Copyright, India
News & Feature Alliance)
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