DISCONCERTING

Source: The Hitavada      Date: 02 Sep 2017 08:43:39

THERE are disturbing signs visible on the economic front. For the first time in three years of the Narendra Modi regime, the growth of India’s Gross Domestic Product (GDP) has sunk to a point as low as 5.7%. Though Union Finance Minister Mr. Arun Jaitley has blamed this slower growth on the behaviour of market and business around rolling out of the Goods and Services Tax (GST) and has hoped that the curve would turn up soon, there are quite many issues in the economy waiting to be tackled on an urgent basis. And to be able to do that effectively, the nation will have to take a dispassionate and non-political look at the recent happenings and policy decisions including demonetisation.

There is no doubt that most such policy-decisions have been taken with the best national interests in mind. Yet, it is also true that the post-decision management of issues had much to be desired. If that happened in the case of demonetisation, it is now happening in the case of GST implementation as well. No matter projected benefits of GST, the market and the people are yet to see them in actuality, something that happened in the case of demonetisation also. Despite the strong justification of the policy-decisions from the leaders of the Government, the market does not seem convinced about many of the points offered as support. In fact, doubts have sprung up even in the agencies as critical as the Reserve Bank of India (RBI) about the management of decisions like demonetisation.

An even as these twists were being noticed by the nation, the people also did not see much practical evidence that corruption has been brought down effectively. That goal might have been achieved at higher levels, no doubt, but things do not appear to have changed as dramatically at the ground level as is being claimed. The concept of ‘Ease of Doing Business’, too, has not flourished in the past three years to expected levels. Business and industry are still trying to make sense out of many policies that were launched with a stated purpose of promoting ‘Ease of Doing Business’.

Another area in which India is failing is manufacturing. In the past twenty-odd years, Indian manufacturing has met with a near-criminal indifference almost at all levels, including industry. This is one area where China forged ahead of India in leaps and bounds. Of course, a few years ago, India started waking up to this harsh reality and started talking of manufacturing as a national thrust area. Despite that, not much could be achieved because the thrust was more in words and less in action. Then came Prime Minister Mr. Narendra Modi’s fresh thrust in the form of ‘Make In India’. Unfortunately, that slogan got used more to attract foreign manufacturers to open facilities in India, and the Indian component in manufacturing got ignored vastly.

No matter the political claims in the past twelve years by the Government, agriculture, too, continued to be yet another area where nothing concrete was being achieved. The reason was simple: The nation’s planners failed to treat agriculture as the most critical thrust area. What was being lost in agriculture was not the lesser production of food-grains. In fact, exactly the reverse was happening, almost blinding the people from a silently lurking reality of loss of culture of Indian farming.

Cumulatively, all these kept affecting Indian economy in a big way though the advent of negative developments was not consciously noticed by the nation’s economic watchdogs and alarm-criers. Despite the fact that Dr. Manmohan Singh was an economist, he could not assess the starkness of the negative reality. Now, a lot of corrective measures are being taken, but they will take quite some time to start bolstering the national economy. Until that happens, there is an uneasy wait.