Mohammad Jamil
INDIA is facing separatist movements in a dozen states, and after revoking Article 370 in Jammu and Kashmir there is concern in general public that India is likely to give them a rough deal. The plight of Indian minorities especially with Modi at the helm has surpassed all previous records. His policies are dictated by RSS who have unleashed reign of terror on Indian minorities and still showcase India to be a secular state. Anyhow, India today stands exposed, as the threat to religious minorities by fanatic and aggressive Hindu fundamentalism is enough to raise serious doubts among the international community regarding the secular outlook and democratic claims of India. In fact, India is pushing the minorities against the wall through state policies as well as by hardliner Hindu politicians. The terms like Hindu Raj, Ethnic Democracy and Deep State reveal the true face of India.
On the other hand, the economy is undergoing stagnation on account of fall in consumption demand due to decrease in the income of the masses. Several global financial institutions have also slashed India’s growth projections, owing to uncertain economy, poor monsoons and global disruptions. Fears of an economic slowdown in India are mounting after figures published recently showed that growth dwindled to its slowest pace in six years. India’s economy grew only five percent year over year from April to June, marking the fifth consecutive quarter of deceleration, according to data released by the country’s Central Statistics Office. Overcoming anemic economic activity is a major hurdle for the Modi’s government, as it aims to transform India into a $5 trillion economy by 2024, which will require average annual growth of at least eight percent, which appears to be a tall order.
Multiple indicators suggest trouble is brewing in India’s economy. The auto industry, seen as a bellwether for activity, has reportedly laid-off 350,000 workers since April, while renowned biscuits manufacturer Parle has also complained of slowing demand for purchases among low-income consumers. Indian Finance Minister Nirmala Sitharaman announced a host of policy measures last month to stimulate the economy. These included a government spending spree on cars to help the ailing automobile sector, a promise to speed up tax refunds to small businesses and a rollback on taxes for the superrich. Many of the measures were U-turns on Sitharaman’s July budget announcement, which was criticized by some for being detrimental to business. “The first step in tackling a downturn is the acknowledgment of it, which we finally received from the government,” Saurabh Mukherjea, founder and chief investment officer of Marcellus Investment Managers, told Al Jazeera.
Today, many analysts say that there is only one root cause for the economic crisis India is facing and that is the poor leadership of PM Narendra Modi and his reckless policies. It was only in late 2015, with then Reserve Bank of India Governor Raghuram Rajan’s push that the banks started cleaning up their balance sheets, ridden by hidden non-performing assets. According to them, Modi govt should have seen this risk, to begin with, and addressed the problem. The bank recapitalisation that began later should have begun much earlier too. Rajan had also sent the PMO a list of top defaulters, but no action was taken. Stressed with NPAs, banks reduced giving out credit to industry, which resulted in liquidity crunch. Secondly, a number of infrastructure and industry projects were stalled; land acquisition and environmental clearances were major hurdles.
Last month, in an article written by contributing editor Shivam Vij at ‘The Print’ wrote: “Narendra Modi launched one big plan after another, and each one was launched almost as if it was the beginning of a revolution. But nothing has come out of most of them. Make in India, Skill India, Digital India, Startup India, Stand Up India, this India, that India… none of them has brought about the revolution they promised. Instead of doing what was needed, Modi enforced economic quackery over 1.3 billion people. This plan to finish the black economy overnight was supposed to mop up Rs 4-5 lakh crores, but brought loose change. Demonetisation killed the informal economy, disrupted age-old economic systems and caused job losses. The move also scared investors about policy uncertainty in India: no one knows when Modi could come on TV and change everything, just like that. Rumours of the demonetisation of even the Rs. 2,000 note keep circulating in the market”.
Flush with funds from demonetisation, banks were reluctant to lend to corporates, and at the same time corporates were reluctant to borrow because of regulatory uncertainty. Banks stepped up their exposure to NBFCs. Former BJP Finance Minister Yashwant Sinha’s article published in 2017 had encapsulated what economists had been pointing out earlier. He wrote, “Private investment has shrunk as never before in two decades; industrial production has all but collapsed; agriculture is in distress; construction industry – a big employer of the work force – is in the doldrums; exports have dwindled; sector after sector of the economy is in distress.…” Admittedly, there are deep structure problems in the economy which have resulted in the economic mess. But what is also undeniable is that Modi’s capricious economic policies, such as the pointless demonetisation exercise, coupled with his govt’s inability to implement the long planned GST have taken toll.
—The writer is a senior journalist based in Lahore.
