Economic
Highlight
New Delhi, 27 May 2019
Votes of Aspiration
REDRAFT ECONOMIC VISION
By Shivaji Sarkar
The BJP, rather Narendra
Modi, has stunned the world. Resounding victory touching 352 plus is a rare feat
in an election. The spread is all the more spectacular as the fortress West
Bengal has collapsed. In fact, the surprise is not his victory. It is sheer poll
management notwithstanding not so bright an economy in real terms.
Yes, Modi stressed on
the populist measures that touched the poor -- Pradhan Matri housing, Ayushman
health care, toilets in every house, job ruses of MUDRA or Skill India and
about 431 other programmes. In the post-election scenario, these programmes
look to have touched the hearts of millions. May be, as part of their gratitude,
they voted Modi back to power with a thumping majority.
That may possibly
explain a uniform phenomenon of the rout of caste-based parties such as of
Mayawati’s BSP, with the support base among dalits; Ajit Singh’s RLD based on
Jat support; Mulayam-Akhilesh’s SP a hardcore Yadav-OBC party; Chandrababu
Naidu’s TDP, a party of OBC and fringe castes but with a slightly wider base;
Sharad Pawar’s NCP, strong Maratha sugar-lobby party or Laloo Yadav’s RLD, a
Yadav party.
The economic packages
lured the voters to vote for Modi, who sells dreams to the fringe classes,
rather than the combine put together. This is possibly Modi’s new political
economy. It does not serve the elite voters, who certainly no political party
can trust for loyalty. A best instance is that of Modi’s one time Chief Economic
Advisor Arvind Subramaniam. Modi could trust him but Subramaniam could not
understand Modi and chose a different path.
Modi’s macro economy
functioned different from his targeted-vote economy. Dole-based economy
succeeded politically to break the caste arithmetic, a shrewd move indeed. But so
far his macro economy has been a continuation of the hardcore Manmohan Singh’s
principles called Manmohanomics. So
Modi had to bear the brunt of criticism that had seen the ouster of Manmohan
Singh.
This no doubt had put
a spanner in the progress of the nation, and which led to joblessness,
industrial slowdown, lack of demand, high bank NPAs, crisis in public sector
like giants BSNL/MTNL, ONGC, petro companies and Maha Navaratnas.
But that was before the
elections. What next? Would he now have a new policy? Modi did not promise much
in concrete terms. But if he and his government continue the same policy, the nation
would continue to go downhill, which would neither suit him nor the country.
It is not the public
sector alone that faced the brunt. Hindustan Lever, the largest consumer goods
producer, had the poorest show in 18 months in March 2019 of 7 per cent. And
what was unnerving was its CEO Sanjiv Mehta’s statement: “Consumer essentials
are recession resistant but not recession-proof”.
From car makers to
toothpaste sellers and in fact every sector has had a lousy start this year. All
eyes are now fixed on Modi’s new policies. Would he be breaking away from Manmohanomics to pave a super highway of
growth or would his team continue to struggle in search for a policy.
India has to come out
of this recession else the aspirational voters might behave in the most frustrated
manner. During the past two years farmers’ distress has increased and they have
had to march several times either to the country’s capital Delhi or the
financial capital Mumbai. Mostly peaceful, but with extreme angst!
The new government is
literally walking on the razor’s edge. The BJP’s popular Hindutva promises
wonderful life as did the Marxism in Soviet Union. An aspirational voter
believes in it because he feels he would have more than what he can actually see.
However, the BJP faces
its toughest challenge now. Mere booth management does not win polls, and this it
realised in the three State polls held last December. A correction today has
paid seat dividends no doubt, but now the young voters want better industrial
show, action and result that would ameliorate their lot.
Modi and team must
accept that 2019 is an aspirational vote, a process of social synthesis. And
the caste divide in Indian social system has been obliterated by a strong Modi.
Poorer people, having got the basics of food, cash support, house and toilet,
would be demanding more.
India is entering the
middle income category of countries around $2,000 per capita income. Newly-emerging
consuming classes are driven by aspiration rather than feudal style dole outs.
Even less-demanding rural youth vie with the urban youth.
Economy needs a
boost. The last five years have seen a benign environment where food prices
recorded a modest increase. Now a global economic slowdown is visible. There
are incipient signs of stress on the price front while global trade wars, may
be even real wars, are breaking out. Brexit may change European economy and
those dependent on it.
Modi has also to work
in education, its funding and linking it to industry and manufacturing. He also
has to work on a new short-duration syllabus that saves nation’s money and
churns out skilled people faster. Public universities are in crisis and private
ones in a morass. The youth is unhappy. The system needs cash and policy
lubrication.
The tax system needs
reform as the one-nation GST has hit many sectors such as education, NGOs,
small traders and entrepreneurs. Income tax reduction is awaited. It is a tough
task as people’s purchasing power has to be increased as also the government’s
revenue. The stock market is in a thaw. Occasional boom is stated to be
self-managed.
The economic vision
has to be redrafted. The NITI Aayog has to be invigorated. It has to find out
solutions to inflation, slowdown and joblessness. The Aayog has to function as a
think tank but is unable to even suggest ways to come out of flip-flop policies
on taxing fuel or high tolls or cost on working out tax component. Over 5 per cent
of corporate expenses are on working out the taxes and satisfying tax raiders.
The nation and its
people have reposed trust. They want to be paid back and cannot wait for
another term to deliver. Till today, Indira Gandhi is ridiculed for the failure
of her garibi hatao slogan. A lion of
a Modi cannot repeat that. It would devastate the people. He has to function to
invigorate the faith in leadership.
The aspirations today
are more than what these were 2014. Indians believe Modi has the magic wand to
solve the problems and make India the leading economy. And hope next five years
would finally see ‘India shining’.—INFA
(Copyright, India
News & Feature Alliance)
|