India is in a state of unprecedented crisis. The challenges include the COVID-19 pandemic, the Chinese aggression on our borders and most importantly, the poor state of the economy. It is pertinent to highlight Prime Minister Modi’s concern as the Chief Minister of Gujarat in November 2013 when he said, “the economy is in trouble, youth want jobs, devote more time to economics, not petty politics.” Ironically, under his leadership as the Prime Minister of India, the country has seen the steepest GDP fall of minus 23.4% in the last quarter.
No other nation in the world has witnessed such a failure in political leadership. India has witnessed the strictest lockdown, smallest fiscal stimulus, highest inflation rate and the steepest GDP crash. But the headlines continue to be diverted by lofty promises such as the 20,000 lakh crore package or the death of an actor.
It is important to take a closer look at the PM Modi’s economic package:
- Pradhan Mantri Garib Kalyan Yojana – Rs 2814 crore package for 2.81 crore beneficiaries – translating to Rs 1000 per person
- Jan Dhan Yojana – Rs 30,925 crore for 20.6 crore – translating to Rs 1500 for 3 months i.e. Rs 500 per month
- Migrant labourers – 2.67 lakh metric ton for 2.66 crore persons over 2 months –translating to 5kg of grains per month.
The benefits announced are so meagre that they will not even qualify as a relief package, much less be described as a stimulus. Disappointingly, the BJP Finance Minister has refused to take responsibility and instead put the blame on an Act of God. The BJP government is blind to the fact that the economy has been on a constant decline since demonetisation in 2016. The GDP has been slipping quarter by quarter, and the rising unemployment prior to the pandemic is a clear indicator of this government’s failure.
The latest CAG reports highlighting the Government’s effort to mask the despicable state of the economy reveal that the Government is not only mismanaging, but also lying. This is supplemented with the abdication of responsibility towards states. The Finance Minister had initially tried to push the burden of GST shortfall on the states, leaving financially weak state governments no real choice but to borrow. As suggested in my speech in the Parliament on September 18, 2020, the Central Government, instead of pushing burdens, should relax the norms under the FRBM Act and borrow from the global market and take international assistance from IMF, WB and ADB.
The bill for Supplementary Demands was introduced to withdraw from the Consolidated Fund of India without accounting for the needs of the states, especially the state of Assam. The people of Assam have categorically opposed privatisation and selling of the LokPriya Gopinath Bordoloi Airport and the oil fields, and the proposal sale of the Hindustan Paper Mills in Cachar and Nagaon. While the dedicated Ministry of Jal Shakti failed to visit the flooded state of Assam earlier this year, the establishment of the the second Sainik School in Golaghat and the preparation of DPR for the bridges over the Brahmaputra connecting Sivasagar-North Lakimpur and Jorhat with Majuli also remains ignored. Hospitals in Assam still face a shortage of beds, ventilators and emergency medical equipment.
Where India has adopted the unique strategy to bang thalis and light diyas, the Chancellor of Germany has flattened the COVID-19 curve in her country, Prime Minister of New Zealand has implemented one of the most successful lockdowns in the world and the UK Chancellor Rishi Sunak has introduced the furlough scheme transferring directly to companies to retain workers, mitigating the unemployment crisis. In the USA, President Trump blew up a minor trade dispute with China into an all-out trade war, resulting in China granting several concessions.
The definition of Nationalism perpetrated by the BJP Government is the protection of an individual’s image, not the nation’s well-being. While the nation suffers and the Parliament discussed the crises strangling the country, the Prime Minister’s absence from the Parliament was noteworthy. All the evidence suggests that the gospel of ‘One Man, One Saviour’ has completely failed the economy and the nation.
Therefore, in light of the ongoing crisis and utter failure of this Government, there is a need to constitute an Emergency Economy and Finance Recovery Council similar to the GST Council. Such a council will include state finance ministers, along with former Union Finance Ministers like Mr. Yashwant Singh and Mr. P Chidambaram. This council should be steered by the person who led India out of the 2008-09 global financial crisis, the former Prime Minister, Dr. Manmohan Singh. There is an urgent need to switch gears and allow for a collective effort through consensus and dialogue.