Economic Highlights
New Delhi, 4 June 2018
Arithmetic Vs Welfare
ECONOMIC RE-STATREGY MUST
By Shivaji Sarkar
The byelections results are a clear signal for the ruling combine for
changing its economic policies. The results are not mere reflection of the
strength of a united Opposition, but also speak of the mood of the people for
their overall wellbeing.
Incidentally, the results coincide with the IMF projections for India at
7.4 per cent, Government’s announcement of 7.7 per cent GDP growth in the
fiscal 2017-18, bank non-food credit growth of 10.4 per cent and agriculture
credit growth rise by 5.9 per cent. Inflation at 4.58 per cent is the only
aspect that is inching beyond the RBI tolerance limit of 5 per cent. The other
concern should be floundering rupee which had gone beyond Rs 68 to a dollar to
recover to around Rs 67 during the last one week.
It is not that the Government has lagged anywhere in its people-centric
policies. The NDA’s four-year achievements are significant almost in every
sphere – 31.58 crore are part of financial inclusion through Jandhan accounts;
431 schemes enriching 20.14 crore people, the world’s largest, with Rs 3.66
lakh crore of direct benefits; MNREGA women beneficiaries increasing by 5 per cent;
82 per cent connected through Prime Minister’s rural roads (PMGSY), 5.22 crore
families covered by low-cost Jan Suraksha insurance; the working class has 42
per cent increase in wages and increase in workers’ enrolment in organised
sector as the government funded their 12 per cent employers’ contribution.
There are apparent actions to curb black money. Three lakh shale
companies were closed. There are many other achievements the Government has showcased.
All this is impressive. However, one needs to ponder where the Government
lagged in attracting voters. Or is it sheer arithmetic? Partly it may be so.
But the overall performance, including the retaining of an Assembly seat in
Karnataka by Congress, losing the prestigious Kairana Lok Sabha and Noorpur Assembly
seats in Uttar Pradesh by the BJP; NCP wresting Bhandara-Gondia from BJP in
Maharashtra and BJP trouncing Shiv Sena in Palghar, speaks a lot. The BJP wins
one Lok Sabha and one Assembly seat of total 14 seats – 10 Assembly and four
Lok Sabha.
This is intriguing. A party that was sweeping every election is thawed.
It cannot be just electoral politics though that certainly plays a significant
role. There are other aspects too. There is a feeling that Prime Minister
Narendra Modi is on a delivering spree but overall happiness of the people is not
rising. Why is it so?
The figures discussed above show that the Government has tried to
deliver through 431 schemes -- is this too stretched? These have benefited a
large number of people and the farmers as well through credit cards and other
benefits. But the sense of losing remains among the farmers and the rural
populace despite growing consumer goods sell.
In Kairana, the ganna
(sugarcane) won against Jinna
(religious card). The UP sugarcane growers have over Rs 16,000 crore dues to be
paid by the sugar mills, according to Indian Sugar Mills Association (ISMA). The
farmers are unhappy -- be it over potato, onion or wheat, as they are not
getting the remunerative prices, despite Government announcements of 150 per cent
MSP.
This needs to be analysed. Both UP and Maharashtra have higher sugarcane
production as also higher dues. The RLD victory in Kairana, the heart of sugar
belt, and NCP in Bhandara-Gondia represent that there is discontent apart from
the combined arithmetic. At Palghar it did not work. But could the BJP have
retained the Bhandara-Gondia seat had the Shiv Sena contested as a partner? Not
unlikely.
So the election is not mere mathematics. There are many social and
economic issues that mark it.
Despite IMF and Government projections, on May 30, Moody’s
Investors Service cut India’s 2018 GDP growth outlook to 7.3 per cent from 7.5
per cent, citing higher oil prices and tighter financial conditions. The risks
are currency slump and faster inflation.
Angst is growing against hike
in petrol and diesel prices despite a far lower international price, which had
touched over $80 and again falling and its consequent impact on transport and
commodity prices.
The bypoll in Bhandara-Gondia had been
necessitated because BJP MP Nana Patole had quit the Lok Sabha membership as
well as the party after publicly criticising the government’s style of
functioning. Patole’s anguish apparently is shared by the voters. This needs to
be taken seriously.
Another revelation of the polls is that
Hindutva is now the common denominator for all parties. The BJP needs to look
beyond. It has to be more inclusive and should try to win back allies such as
the TDP and Shiv Sena. It also has to make the alliance more broad based, as it
was the success mantra of NDA-I of Atal Behari Vajpayee with 24 allies.
Political and economic course corrections are
a must. India is a social coalition and it goes beyond religion. The BJP-RSS
has leaders who have penetration in the minority communities. They need to be
brought into the forefront. Minorities are not unwilling to sail with the BJP
but they need a reassurance from Kashmir to Kerala. Projection of such leaders
and freehand to them to create an inclusive society might pay significant
dividends over simple arithmetic. The BJP must reconsider its strategies.
On the economic front, the party needs to
remove the sentiment that it favours profiteers be it some houses or faulty
policies such as dynamic rail fare, rising bus fares, high taxes on petrol,
highway, local bodies tolls, coercive identity linking, high income tax and the
rise of tax terror that hits its core supporters.
The Government has to come out of the
blackmail of environmentalists-oil lobby on diesel. It should junk it and lower
diesel prices to refining cost of around Rs 20-24 a litre. High diesel prices
and high tolls are impacting both the farmers and transport sector. They are
drifting away. Further, it has to re-strategise vis-a-vis Congress President Rahul
Gandhi. The youth despite everything is getting attracted towards him.
The byelections have indeed given the signals
at the right time. It requires course correction at many levels and involvement
of all for a revival. The Opposition having tasted blood is likely to up their
ante. It is, however, too early to say that a dynamic Modi would be more than a
match for them. The road to 2019 is becoming interesting. With more pro-people
economic measures on the cards and BJP re-strategising, smooth sailing for the Opposition
may not be that easy either.---INFA
(Copyright, India
News & Feature Alliance)
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