The people deserve better: As the Republic turns 70, the nation’s growth prospects seem fraught
It is the robustness of the economy, which alone can deliver millions out of poverty. Yet since 2014 to the 70th year of our Republic, the economy has been given step-motherly treatment. This government’s agenda is not just politics, but divisive politics.
The IMF believes that India’s GDP for 2019-20 will be 4.8 per cent — a drag on the global economy. (Representational image)
In the 70th year of our Republic’s tryst with destiny, we should have been proud of a robust nation: Inspired by the sacrifices of all who fought for our freedom, energised by the present and full of hope for our future. We dreamt of a Republic alive, protective of its democratic institutions, engaged in meaningful conversations and marching with the rest of the world to compete and conquer with our creative genius. Instead, we seem to have lost our way, unclear of the fundamentals that we need to address as those who govern us unleash an agenda that seeks to dominate, suppress dissent, encourage violence and espouse discriminatory policy prescriptions that have spread unease in the minds of concerned citizens.
The IMF believes that India’s GDP for 2019-20 will be 4.8 per cent — a drag on the global economy. That is not the only aspect of our economy that worries us. The oxygen necessary to achieve a GDP growth rate of 8 per cent and above requires bold initiatives. While some of the problems may have been inherited and termed as “legacy issues”, this government had a unique opportunity with the vast majority at its command to take bold decisions to create an environment that encourages both domestic entrepreneurs to invest and attract foreign capital, especially in infrastructure. What is also required is to put more money in the pockets of the poor. That would have, in turn, given a kick-start to our consumption cycle, allowing people at the bottom of the ladder to fuel the economy with increased spending. But the animal spirits of entrepreneurs have been doused by the fears of investigating agencies looking for opportunities to target trade and industry. Instead of a genuine attempt to fight corruption, what we see is both prosecution and persecution based on suspicion, which tends to destroy confidence in the system.
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Bureaucrats and bank officials are targeted along with the persecution of political opponents. Those close to the establishment are protected. Such partisan attitudes tend to make both bureaucrats and bankers pliant. It also makes for a soulless bureaucratic system where bureaucrats bend over backwards to please their political masters for protection. This is because bureaucrats who take principled positions, not willing to succumb to the diktats of their political masters, are either shunted out of their positions or dealt with in other ways. The bureaucrat-banker-political nexus is thriving with the blue-eyed boys of industry being openly granted favours for crucial infrastructure projects in this country. The promise of an independent Lokpal is a far cry. That the Lokpal is not yet fully in place shows the BJP’s reluctance to deal with corruption: This government will ensure that the Lokpal is not given the opportunity to get at the truth, lest it may deeply embarrass people in high places.
It is only a healthy, growing economy that brings home prosperity even to the common man. Only 4 per cent of our population contributing to our tax revenues is proof of an ailing economy, where millions live on the margins. That over 70 per cent of our nation’s wealth is owned by less than 10 per cent of our population, even after 70 years of independence, is reason to lament. The fall in consumer spending due to low rural demand for the first time since 1973, falling family savings, lack of credit offtake in the banking sector and high levels of NPAs in public sector banks augurs ill for the future. Exports are stagnant and key sectors of the economy show no signs of recovery. Telecom may see the exit of Vodafone while other players are unable to meet DoT’s demands for AGR dues. Real estate is in ICU.
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Thus, the economic downturn has led to a fall in direct tax revenues. Collection of indirect taxes through GST, not matching the government’s expectations, has further dampened the economic sentiment. The hope that the revenue gap will be met by achieving the disinvestment target of Rs. 1.05 trillion in the current fiscal year is unlikely to be realised. It is unfortunate that valuable assets of Central Public Sector Enterprises are being sold to meet the fiscal gap, instead of using proceeds of such asset sales to create new assets to increase the prospects of growth.
The unemployment rate of those in the age group of 20-24 during the period September-December, 2019, is 37 per cent. Within that category, the unemployment rate of graduates is over 60 per cent. In fact, in 2019, the average unemployment rate of graduates was 63.4 per cent, much higher than in the previous year. Unemployment rate of those in the age group of 25 and 29 is 11 per cent, while it is 23.4 per cent amongst graduates in that age group. Unemployment amongst postgraduates is also frightening, reaching a rate of 23 per cent in 2019. The rate of urban unemployment for youngsters in their early twenties, between September and December 2019, was as high as 44 per cent, reflected in the levels of unrest which we witness in protests across India.
It is the robustness of the economy, which alone can deliver millions out of poverty. Yet since 2014 to the 70th year of our Republic, the economy has been given step-motherly treatment. This government’s agenda is not just politics, but divisive politics. The duo at the helm of affairs hopes to capture the Hindu mind by pitting it against others. In the 70th year, our Republic deserves better.
This article first appeared in the print edition on January 25, 2020 under the title “The people deserve better”. The writer, a senior Congress leader, is a former Union minister.
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