Wednesday, May 24, 2017

"A" in politics but low in Economics

by Harish Gupta, National Editor, Lokmat Group


In democracy, completion of three years in power is a time for perturbation as that’s when the curse of “anti-incumbency” sets in.

Prime Minister Narendra Modi is an exception. Into his fourth year in power, there is hardly any popular disgruntlement against his incumbency. It was evident in the assembly election in Uttar Pradesh last March when the BJP under Modi and party president Amit Shah succeeded in pulverising the ruling Samajwadi Party much to the same extent to which the saffron party had steamrolled its rivals in the mega-state in the 2014 general elections.

By now, BJP is armed with an election machinery which is unparalleled. Its leadership’s ardour to win every poll is legendary. And for the party, the importance of the year 2019, when Modi’s second innings in power is expected to begin, is underlined. At least this is the impression one gets after talking to a number of Opposition leaders. Bihar Chief Minister Nitish Kumar’s statement that he is not in the race for the Prime Minister’s post and veteran politician Sharad Pawar is not ready to play ball with the Congress clearly give the impression that they are unwilling to fight with Modi.  

It is obvious that BJP is shining in the absence of competition. Congress president Sonia Gandhi, Trinamool chief Mamata Banerjee, CPI(M)’s Sitaram Yechuri—all of them seem trapped in a single strategic silo to combat Modi, which is to “unite” the opposition. The Presidential poll, due in July, can be the first test of unity. But that’s most likely to be fighting a losing battle, as there are unbridgeable fissures in the opposition—Mamata Vs CPM, AAP’s Kejriwal Vs Congress, Samajwadi Party Vs BSP’s Mayawati. Beside, Modi’s inclusive style of campaigning has gravely challenged the traditional parties’ vote-banks. Mayawati’s Jatav, Mulayam Singh Yadav’s once famous Muslim (M)-Yadav (Y) amalgam, Delhi’s Bihari immigrant voters loyal to AAP—recent elections show that the lure of Modi’s “mitron” call brought about seemingly irreparable cracks in these traditional alliances.

Besides, the opposition is bereft of tall leaders. Unlike its UPA predecessor, the Modi administration is not protective about politicians involved in graft cases. Instead, its in-the-face attitude has dragooned most opposition stalwarts in cases from which escape is not guaranteed. Like Laloo and his family members in money-laundering charges; Congress former Home and Finance Minister P. Chidambaram and his son, Karti, in the allegation of siphoning off huge amounts to acquire, among other things, large property in Britain; most of Mamata’s ministers and party leaders waiting to be picked up by CBI on the charge of accepting bribe as shown in the ‘Narada’ sting operation. In the National Herald illegal share-transfer case, the noose may also tighten on Sonia Gandhi and her son, Rahul, the Congress vice-president.

The opposition calls it “witch hunt” but its voice is feeble, with the media prone to self-censorship, and the government, armed with summary provision under Sec 124A of the IPC, being empowered to swoop down on its critics in the social media on the charge of being ‘seditious’. Besides, hit by a blizzard of serious corruption charges, the opposition seems to have lost its moral heft to stand up and question the government. It is more serious than comparable global developments, like near-evaporation of the Labour Party in UK, or the US Democratic Party being in eclipse. Unlike these mature democracies, the Indian opposition parties are personality-based and not much remains of them when the central towering figure collapses.

Though Modi’s political victory so far is undeniable, there are signs of weariness in governance and vision. In 2014, he promised: “I will make such a wonderful India that all Americans will stand in line to get a visa for India”. Unfortunately, things have moved in a different direction. Somewhat embarrassingly, the government Central Statistics Office’s (CSO) figures of national income refuse to tally with estimates of industrial production. In the quarter covering demonetisation of large notes last November, the index of industrial production was flat but national income grew at 7%, like in magic. With large malls lying near-empty, or being converted to office space, a shortfall in demand is self-evident.

Behind decline in demand is the stark reality of job opportunities shrinking. It is not merely due to Donald Trump’s visa policy, or problems in the IT sector due to shifts in technology (entry of robots in workplaces, for example). There are other reasons too, such as:

·      India has 10 million new workers to the workforce annually, but available non-agricultural jobs are less than 5 per cent;

·      Poor education system has rendered most Indians unemployable, including 90 % of the 10 lakh engineers passing out every year;

·      China became the world’s factory in the 1980’s. Now protectionism rules the roost, with global trade remaining subdued at 2.7% in volume terms. India may not be able to do the China act.

·      CRISIL estimates 12 million people will join agricultural workforce between 2011-12 and 2018-19. But agri workers’ number is declining very fast. So the country cannot move up the value chain to become a modern nation.

·      Agriculture, construction, manufacturing—sectors that employ people are lagging GDP growth. Though agriculture production has shown improvement. But its after two years’ of consecutive drought. What have outpaced GDP growth are financial services, real estate, public administration, and trade, hotels and restaurants. Except the last, all other growing sectors have little job potential. The country is indeed experiencing jobless growth. In the proposed GST regime, the last two have been hit hard.

From the rough and tumble of electoral politics, can Modi take a creative leap to make India a hub of innovation and growth? In the next two years, he must prove he can think big on governance. Or else the queues in India for American visa will continue to be longer than the other way round.