The Big Story: Own up
On Wednesday, former Union finance minister and Bharatiya Janata Party member Yashwant Sinha’s published a scathing indictment of the Central government’s economic policy. While Sinha might have been motivated in part by pique for having been sidelined by Prime Minister Narendra Modi, there is little doubt that the argument he made and the data he presented was sound. Curiously, there was little enthusiasm from the BJP to respond to Sinha’s points. Union home minister Rajnath Singh countered simply by saying, “The whole world admits that India is the fastest growing economy in the world. No one should forget this fact”. This “fact” was in fact denied by none other than the International Monetary Fund, which in January of this year announced that – thanks to demonetisation – India was not the world’s fastest growing economy any more.
This is not the first time the BJP has simply denied that the country is undergoing an economic crisis. Union finance minister Arun Jaitley explained away the slow down in growth during the first quarter of 2017-’18 as due to the pre-Goods and Services Tax destocking of goods. BJP President Amit Shah in turn fobbed off the slowdown by saying it was due to “technical reasons”.
However, the slowdown is quite real. Growth has been falling continually since the quarter ending March 2016. In fact, as per the old method of calculating Gross Domestic Product, the growth in the first quarter of 2017-’18 was a paltry 3.7% – a far cry from the 7-8% India had got used to under Prime Minister Manmohan Singh. Private investment and exports have fallen precipitously. Defying Prime Minister Modi’s “Make in India” mantra, manufacturing has ground to a halt. It grew by 1.2% in the first quarter of 2017-’18. Agriculture is in distress across nearly every state in the Union – leading to multiple farmer agitations. The crises in employment is acute. Alarming for a country of India’s size and youth bulge – 12 million people enter the workforce each year – the nation is actually losing jobs on a net basis.
So bad is the slowdown that Indian industry – which rarely makes statements that could be construed as political – has spoken up to complain. Fast moving consumer goods behemoth Hindustan Unilever’s Chief Executive Sanjiv Mehta said that rural India is yet to recover from the blow of demonetisation while Larson and Toubro’s chief was clear that there would be no recovery for at least the next two years.
What makes the Modi government look even worse is that this downturn is occurring against the backdrop of low crude oil prices globally. Yet, rather than build on this stroke of good luck, the Union government shot itself in the foot with first demonetisation and then the Goods and Services Tax.
However, even as the Modi government denies the crisis publicly, it seems it is slowly waking up to it privately. The Union government reconstituted the Economic Advisory Council, a United Progressive Alliance body that was abolished by Modi in 2014. There is also talk of a stimulus package to prop up the economy. However, given the scale of the crises, a disjointed response will not be enough. The Modi government must acknowledged the hole the country is in now and clearly tell the peoples of India how he plans to help it get out of it.
The Big Scroll
- Fact Check: India’s growth did slump to 5.7%, but not due to “technical reasons” as Amit Shah claims, writes Mayank Jain.
- Dismiss Yashwant Sinha as a case of sour grapes, but you can’t ignore industry and data, argues Rohan Venkataramakrishnan.
- Does the government have the resources to frame an effective stimulus package for India’s economy, asks Mayank Jain.
- Nitin Sethi interviews JNU professor Himanshu: ‘This is a kind of economic collapse. The first step to tackle it is to acknowledge it’
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- There is much work to be done if the Goods and Services Tax is not to become a tryst with disaster, write Arvind P Datar and K Vaitheeswaran in the Indian Express.
- Why does Chhatisgarh use Hindi and not its native Chhatisgarhi? In teaching children, the default medium of instruction should be the state language, argues Anurag Behar in the Mint.
- Kolkata’s Durga Pujas are keeping urban folk culture alive, writes Jawhar Sarkar in the Wire.
- America’s new world order is officially dead, argues Hal Brands in Bloomberg.
At BHU, the silence of teachers reflects an environment of fear, absence of democratic forums, reports Shreya Roy Chowdhury.
Paranjape was the only serving faculty member Scroll.in spoke with who allowed her name to be published, even though many teachers were deeply critical of what they called the university’s restrictive environment and autocratic administration. They attributed the silence of their colleagues to the absence of a union, rules forbidding collective action and a fear of retributive action, such as the denial of promotions, by the administration. Paranjape said that on Tuesday, around 15 teachers from various social science departments met to draft a letter to President Ram Nath Kovind, who is the Visitor of the university, “asking for democratic space” – unions for teachers and students.