Children Offer Prayers On Eid ul-Fitr
Muslim children offer prayers (Namaz) on the occasion of Eid ul-Fitr in Gorakhpur, Uttar Pradesh on Wednesday.
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Month: June 2019
Major Reshuffle In BJP On The Cards
Moves are afoot to initiate changes in the BJP organisation after its massive victory in the Lok Sabha elections and its President Amit Shah becoming a crucial member of the Union Cabinet.
The changes that could come in a week’s time may include that of the BJP President in keeping with the principle of ‘one-man, one-post’ under which Shah may have to give up the party chief’s post.
Now a search may be on to look for a replacement for Shah, whose term which ended in December last year and extended for six months, would come to an end this month. The extension was given keeping in mind the ensuing general elections.
Former Union Minister J P Nadda is being considered a strong candidate for the post due to his perceived organisational skills and clean image, sources said.
However, the process to choose the Presidentcould take at least two months to complete. A working President can be chosen to oversee the election process of the new President in case Shah resigns.
Some reports suggest that Nadda could first be appointed the working President before he is elected to the top post.
Nadda, who hails from Himachal Pradesh, is also a member of the BJP’s parliamentary board which makes him one of the strong contenders. Apart from him, the name of BJP General Secretary Bhupendra Yadav is also doing the rounds for the post. (ANI)
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2 Cabinet Panels To Spur Economy
With the spectre of slowdown haunting the economy and rising unemployment, Prime Minister Narendra Modi on Wednesday constituted two new Cabinet committees under his chairmanship to spur economic growth and investment and employment.
The five-member Cabinet Committee on Investment and Growth includes Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Road Transport and Highways and of MSME Minister Nitin Gadkari and Railway Minister Piyush Goyal.
Another 10-member Cabinet Committee on Employment and Skill Development has been formed which includes Shah, Sitharaman, Goyal, Minister of Agriculture and Farmers Welfare, Rural Development and Panchayat Raj Narendra Singh Tomar, Human Resource Development Minister Ramesh Pokhriyal ‘Nishank’, Petroleum and Natural Gas Minister Dharmendra Pradhan, Minister Skill and Entrepreneurship Mahendra Nath Pandey and Ministers of State Santosh Kumar Gangwar (Labour) and Hardeep Singh Puri (Housing and Urban Affairs).
Economy has become a major cause of concern for the new government with GDP dropping to 5.8 per cent in the last quarter of the 2018-19, according to NSSO figures. Overall GDP for last financial year has been estimated at 6.8 per cent against a target of 7.2 per cent.
On the employment front, just after the elections were over the government released the Periodic Labour Force Survey (PLFS) – Annual Report (july 2017 – July 2018) which put the umemployment rate at 6.1 per cent, the highest in 45 years. (ANI)
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Punjab Disappeared – ‘A Lost Childhood’
Tejbir Kaur was only a few months old when her parents were “picked up” by the Punjab Police. Some called them militants, others martyrs and yet others victims of police highhandedness during 1990s. Her story:
No one can tell me for sure what my date of birth is. However, people know the day when my life was spared — October 2, 1992. This was also the day my parents were killed in a ‘police encounter’. My parent’s killers were “generous” enough to spare my life. After all, what harm could an infant do?
I grew up in a village called Nagoke in Khadur Sahib Tehsil, district Amritsar. Till the age of 12, I was made to believe that my chacha-chachi (paternal uncle and aunt) were my parents. There was a picture of my father which they had hung on the house wall. “That’s your tau ji (uncle),” they would tell me. I had no reason to suspect them.
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At 12, I was sent to Guraasra — a hostel in Mohali. “Wahan padhai achhi hogi (you will have access to good education there),” I was told. I later discovered that it was an orphanage for the children who had lost their parents to extrajudicial killings during the Khalistan movement. Their parents were often referred to as ‘martyrs’. It was there that I was told that I too was one of them. I did not know how to react to the revelation. Then I burst into tears.
Who was my father? Who was my mother? Why were they killed? Why were they called martyrs? A flurry of questions crossed my mind. I had nightmares. I would often wake up in the middle of nights soaked in sweat. I needed answers. I needed the truth to come out.
ALSO WATCH: Digging Out The Dead In Punjab
There were various stories surrounding the death of my parents. Some of our close relatives said my parents were arrested when they were travelling on their scooter while some said they were picked up from a bus. Some villagers told me the police gunned them down and showed it as an encounter while others said my parents killed themselves. My family was stoical. For them, my parents simply “disappeared”.
Gradually, some of my questions were answered. My father, Gurmukh Singh Nagoke, was an electrician with a small shop in Nagoke. He dealt with many clients and business partners. Those days one could settle scores with a rival by labelling him as a “Khalistani”. Police, with unbridled powers, were more than willing to fix the person thereafter.
Someone maliciously complained that my father had links with the Khalistan movement. That brought a series of harassment and physical torture for the family. It went up to such an extent that my father decided to leave home and actually join the movement. Throughout the 1980s he kept dodging the police and was branded a militant.
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Our family bore the brunt for his actions. In his absence, the police, with an eerie regularity, would raid our home and torment my grandparents, uncles and other relatives. They would hit them, tie them behind vehicles and drag them around or beat them up in the lock-up.
My father married Jatinder Kaur in exile in 1990. My mother had cleared her examinations for securing a job with the state electricity board, but was forced to live a nomad’s life with my father. A few months after I was born, the two were picked up a police team allegedly from Chakmafi village in Ludhiana and taken to the house of Khanna SSP Raj Kishan Bedi, Police was tipped off by one Gurmeet Singh alias “Pinky Cat”.
No one knows what transpired but a few days later an advertisement was published in the newspapers asking people to come and claim Gurmukh Singh Nagoke’s daughter from Khanna district. My uncle along with our village sarpanch (village headman) went to Khanna to bring me home.
Three years ago, I saw the man responsible for my parent’s death. In interviews with news channels, Gurmeet Singh ‘Pinky Cat’— an ‘encounter specialist’ with Punjab Police – talked about the fake encounters in Punjab. He disclosed that CAT is an acronym for ‘concealed apprehension techniques’ that became popular in the militancy era in Punjab. He said people were randomly arrested, tortured in lock-ups, shot down or force fed potassium cyanide capsules to show the death as suicide.
Even after my parents died, the police continued to persecute our family for another two years. My relatives, who had nothing to do with the Khalistan movement were questioned, harassed and even tortured. Our home was raided incessantly. It is a miracle how our family withstood it all.
I am married now. I have a new home and a loving family. I do not need a compensation. I do not need a state job. All I want is truth about my parents’ disappearance to come out. If there were criminal charges against my father, he should have been tried in court, not killed in police custody. And what was my mother’s fault? Why was I forced to spend my childhood yearning for my parents? And so I continue to live and seek answers from the government.
(Tejbir’s case is one of the 8,000-plus cases of disappearances that have been documented by Punjab Documentation and Advocacy Project (PDAP). She featured in a documentary film, Punjab Disappeared, which was screened on April 26 in New Delhi.)
Modi Must Tackle These Real Issues
In his second term, Mr Modi will have much more to deal with than have his party gloat and boast about how many seats it can win in 2024
The second lead story in an Indian national daily newspaper recently quoted a Bharatiya Janata Party (BJP) leader proudly proclaiming that in the 2024 parliamentary elections, the party wants to win 333 of the 543 Lok Sabha seats. That is the kind of braggadocio that the BJP needs to avoid. The BJP recently won 303 seats in the recent elections, topping its 2014 tally of 282. Now, it wants more. Greedy proclamations of that sort are exactly the things that the BJP should avoid. Its performance in the past two elections have been spectacular with its prime mover, Prime Minister Narendra Modi, emerging as the strongest political leader that India has seen in a long time.
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Yet, the BJP and its leaders must shun all urges to gloat over its recent victory. True, it has decimated the Opposition parties, chiefly the Congress, which is in shambles. It has humbled well-entrenched regional parties, particularly in Uttar Pradesh and West Bengal, both places where it has wrested seats against big odds. But now, as Mr Modi embarks on his second innings, there are more important things for him and his party to focus on. In his second term, Mr Modi and his government’s performance will face greater scrutiny than it did in the first. The people have spoken with their ballots and given him a renewed lease on the government but now he will have to deliver. Here are some of what the new government must put on top of its agenda. They are about economics and politics, but they have little to do with setting targets now to get more seats in 2024.
Economics. Through NDA-I’s five years, Mr Modi himself, his ministers and other officials in his administration have always maintained that the economy has been in fine fettle. Much of that claim is hot air. India’s GDP growth rate, often mentioned as being the highest in the world in recent years, is based on a revised methodology on a new base figure that many believe has artificially enhanced the official rate to higher than it actually is. India, the sixth largest economy in the world with a nominal GDP of $2.62 trillion, does not have a proper system to measure employment rates. True, large a swathe of Indian enterprise is informal and undocumented but in 2019 not being able to precisely tell how many people are employed is ridiculous.
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Employment generation is without doubt the main task that any Indian government must focus on. According to some estimates, India’s unemployment rates have touched the highest in 45 years during the Modi 1.0 regime. Sixty-five percent of India’s 1.3 billion people are below the age of 35. A large proportion of them is youth of working age. Estimates of how many people are added annually to the numbers of those seeking jobs varies between 5 and 12 million. In contrast, the number of jobs generated annually is a small fraction of those numbers—doesn’t matter if you take the lower or the higher one as the base. In many instances, Mr Modi and his colleagues in the government have been in denial about their track record in employment generation. It is a time bomb that is ticking away and, eventually, it could have electoral consequences.
A lasting solution to India’s agricultural economy is another task that needs urgent attention. Well into the 21st century, nearly three-quarters of India’s population depends on agriculture but the sector’s share in GDP is just 17% and declining. The fact is India’s rural youth have to live on farms toil away at unremunerative and unproductive tasks because there are no other jobs available for them.
Mr Modi, in his first term, launched several catchy-sounding schemes—some were to create universal banking; others to hone the skills of young Indians so that they were employable; and yet others with the objective of increasing investments (and, hence, hopefully, employment) in the manufacturing sector. None of these has achieved results that are anywhere close to the targets that were promised. In his second term, tackling and solving these economic problems have to be Mr Modi’s topmost priority. Otherwise, India will be sitting on a tinder box ready to explode.
Politics. Political pundits in India are a dime a dozen. Indian editors and journalists who scoured the length and breadth of the country to ostensibly gauge the mood of the electorate horribly mis-predicted the outcome of the election with none (except for a few exit polls done by psephologists) getting anywhere close to the numbers that the BJP won. But the BJP’s politics, as the often-vicious electoral campaign this year bore out, is one of divisiveness. Its majoritarian tack has made India’s minorities (of its population of 1.3 billion, 14.2% are Muslims, and in absolute terms that is a huge number) insecure and anxious. A second term could strengthen those in the right-wing nationalist organisations (read: BJP, RSS and the Sangh Parivar’s other constituents) that are inclined towards hard-handed treatment to minority communities. This cannot be allowed to happen. In his second term Mr Modi ought not to keep silent (as he has largely been) when there are instances of violence, discrimination, and worse perpetrated by cohorts that swear allegiance to him and his party. The hard-handed treatment should be reserved for those cohorts and not their targets.
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If Mr Modi, as he and his colleagues often proclaim, want the BJP’s footprints to spread—in the east, the north-east, and the south, he would also have to get a buy-in in terms of regional interests. That would mean assessing, appraising, and understanding the special needs of different regions of India—not just the northern Hindi-dominated states. There have been little signs of that during Modi 1.0. In his second term, he will have to carry those regions with him by more empathetic strategies and policies.
International relations. Just before the elections this year, India sparred with its neighbour and arch enemy, Pakistan, and used the airborne sorties, surgical strikes aimed at alleged terrorist centres, all combined with high doses of jingoism, to try and score electoral points. That does not help India’s relations with Pakistan. Nor does it solve the dispute between the two countries over the northern state of Kashmir. Mr Modi will have to think out of the box when it comes to dealing with Pakistan, which is by itself a troubled state where the army, militant terrorist groups and others hold the government to ransom. India, as the much larger state, has to devise diplomatic strategies that go beyond the chest-thumping rhetoric that hawks on either side of the border favour.
Elsewhere in the world, Mr Modi will have to deal with powerful China, which is building roads and sea routes in India’s part of the world that could hem in India—both economically as well as in terms of security. IN Modi 1.0 we saw media-friendly visits, gestures, and other cosmetic (and mainly ineffectual) in the name of diplomacy with China. India is puny in terms of defence and economic capabilities compared to China. It has to think on its toes when it comes to dealing with that nation and keep its own interests rather than photo ops in mind. Ditto for the US and Russia, two other powerful global powers whose foreign policies have changed quite radically. If India is to make a mark on the global arena and get its due in terms of recognition and of economic benefits, it has to have far more effective plans of dealing with such powers.
In his second term, Mr Modi will have much more to tackle than have his party gloat and boast about how many seats it can win in 2024. There’s a lot to do in the five years till then.
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Is Dynastic Politics Dead? BJP Is Nursing Aplenty
Dynasts in both national and regional parties are flourishing and the NDA is no exception
Over the past five years, the ruling Bharatiya Janata Party ran a sustained campaign against dynastic politics to discredit Congress president Rahul Gandhi. In the 2014 Lok Sabha poll campaign, Prime Minister Narendra Modi would refer to him with derision as shehzaada (royal scion) while this election was pitched as a battle between “naamdars and kaamdars” to drive home the point that the Congress leader’s only claim to fame was that he belonged to the Nehru-Gandhi family.
And when Rahul Gandhi was defeated in his family stronghold Amethi, a gleeful BJP lost no time in declaring that the verdict proved that the electorate had rejected political dynasties. Former finance minister Arun Jaitley posted a blog on Facebook, saying that the “dynastic character” of the Congress was responsible for the party’s decline while pointing out that the BJP is one of the three “prominent non-dynastic parties in India”. One proverb that immediately comes to one’s mind is: those who live in glass houses…
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There is no doubt that the Congress has, over the years, has become synonymous with dynastic politics but the other political parties are far from free from this phenomenon, the BJP included. A study by Gilles Vernier and Christophe Jaffrelot shows that 30 percent of the new parliamentarians are from political families. The Congress has topped this list but the BJP is not far behind while regional parties have evolved into family enterprises.
As the country’s oldest political party, which has been helmed by four generations of the Nehru- Gandhi family over several decades, the Congress comes in for greater notice and is, therefore, singled out for criticism. And when the dynast fails to deliver, as in the case of Rahul Gandhi, the attack is even sharper as is evident from the tone of Jaitley’s blog post.
The BJP’s dynasts have escaped public attention primarily because they are not in top leadership positions. But this is explained by the fact that the BJP is a relatively younger party and, it started climbing the growth charts in the nineties. The party’s dynasts are still younger and will take time to climb to the top.
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In this Lok Sabha, the BJP’s benches will be occupied by long-term MP Maneka Gandhi who won the Sultanpur seat in Uttar Pradesh and her son Varun Gandhi who now represents the Pilibhit constituency earlier held by his mother.
Railway minister Piyush Goyal, whose father was once the BJP treasurer and mother a three-time state legislator, also belongs to the club of political inheritors. Anurag Thakur, the new sports minister, and four-time MP from Hamirpur is the son of former Himachal Pradesh chief minister Prem Kumar Dhumal. Then there is Poonam Mahajan, the daughter of the late BJP leader Pramod Mahajan, who returns to the Lok Sabha for the second time. She is joined by Pritam Munde, daughter of the late Gopinath Munde, who is also into her second term in Parliament.
Dushyant Singh, son of former Rajasthan chief minister Vasundhara Raje, is back in the Lok Sabha, having won the Jhalawar-Baran seat in the desert state. Rita Bahuguna Joshi, daughter of the late veteran Congress leader H.N.Bahuguna is the new dynast in the BJP. She joined the party only a few years ago.
If it is anyone’s argument that this election rejected dynastic politics, they could not be further from the truth. Though it is true that many political heirs like Rahul Gandhi, Jyotiraditya Scindia, Jitin Prasada and Sushmita Dev, have lost, dynasts in both national and regional parties are flourishing. In the Congress Madhya Pradesh chief minister Kamal Nath’s son Nakul Nath was the sole winner from the state, former finance minister P.Chidambaram’s son Karthi Chidambaram’s son has also made it to the Lok Sabha as has Gaurav Gogoi, son of former Assam chief minister Tarun Gogoi. Congress ally Nationalist Congress Party chief Sharad Pawar’s daughter Supriya Sule retained the family fiefdom Baramati, which was first won by her father in 1967. Pawar now sits in the Rajya Sabha.
The big regional winners – Odisha chief minister Naveen Patnaik, DMK’s M.K.Stalin and Jaganmohan Reddy of YSR Congress Party, are all products of political families. Patnaik, who returned as chief minister for a record fifth term, is the son of the late Odisha’s political giant Biju Patnaik, Stalin took over the party after the death of his father, the legendary M.Karunanidhi, and S. Jaganmohan Reddy is the son of former Andhra Pradesh chief minister S.Rajasekhara Reddy.
While Reddy has ousted the Chandrababu Naidu government in Andhra Pradesh, Stalin has swept the Lok Sabha poll in his home state Tamil Nadu while his sister Kanimozhi will be among the party’s representatives in the Lok Sabha.
Then there is the father-son duo, Mulayam Singh Yadav and Akhilesh Yadav of the Samajwadi Party, who will be among the five MPs from their party in this Lok Sabha. The Shiromani Akali Dal will be represented by party president Sukhbir Singh Badal and his wife Harsimrat Kaur, also known as the power couple.
BJP alliance partner Lok Janshakti Party is yet another family-owned shop. While its senior leader Ram Vilas Paswan has moved to the Rajya Sabha, his son Chirag Paswan is back in the Lok Sabha for the second time.
Dynasts argue that it is unfair to criticize them as they have been democratically elected by the people. They also argue that they have earned their spurs, having worked hard to get where they are today.
However, there is no denying that they all have a head start over other political newcomers. With elections becoming an increasingly expensive affair, they have the advantage of having access to their family wealth, which immediately pushes them in a different league. Belonging to a known political family also means their name has an instant recall value. All this inputs into building a political dynasty.
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Doval To Remain NSA With Cabinet Rank
National Security Advisor (NSA) Ajit Doval, a close confidant of Prime Minister Narendra Modi, was on Monday reappointed to the post for next five years with a Cabinet rank in the second term of the NDA government.
The Government of India on Monday reappointed Doval as NSA and upgraded his position from Minister of State (MoS) rank to a Cabinet in recognition of his contribution over the last five years in the security of the country.
The order issued by Appointments Committee of Cabinet dated June 2 said, “The Appointments Committee of Cabinet has approved the appointment of Ajit Doval IPS (Retd) as National Security Advisor with effect from 31.05.219. His appointment will co-terminus with the term of the Prime Minister or until further orders, whichever is earlier. During the term of his office, he will be assigned the rank of Cabinet Minister in the Table of Precedence.”
Doval’s appointment will be for five years, they added.
In 2014, Doval, who was appointed as India’s fifth NSA, played a crucial role in ensuring the secure return of 46 Indian nurses who were trapped in a hospital in Iraq.
Doval was widely credited along with the then Foreign Secretary S. Jaishankar and Indian Ambassador to China Vijay Keshav Gokhale, for resolving Doklam Standoff through diplomatic channels and negotiations.
In October 2018, he was appointed as the Chairman of the Strategic Policy Group (SPG), which is the first tier of a three-tier structure at the National Security Council and forms the nucleus of its decision-making apparatus.
It is being said that Doval also played a crucial role during Balakot airstrikes and release of Wing Commander Abhinandan Varthaman held in Pakistani custody. (ANI)
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BSP-SP Grand Alliance On Shaky Ground
At a meeting of the BSP on Sunday to review its performances in last Lok Sabha elections on Monday, no decision concerning the future of its Grand Alliance with Samajwadi Party was taken, party sources said.
The sources also claimed that BSP supremo Maywati also hinted her party men to prepare for contesting Assembly by-polls in the state. Even though Mayawati praised SP chief Akhilesh Yadav and patriarch Mulayam Singh Yadav for their efforts, it looked doubtful if the by-polls would be fought in alliance with socialist party.
The meeting was chaired by party head Mayawati to accesses party’s poor performance in Uttar Pradesh in the recently held Lok Sabha elections.
Riding high on Modi-wave, BJP bagged 62 seats in Uttar Pradesh, while BSP and SP managed to bag only 10, 5 seats respectively. RLD drew a blank.
“It was a closed door review meeting, election results were discussed. It was analyzed why we lost, how we lost. Several issues including EVMs were discussed. No decision or discussion took place on the future of Gathbandhan,” said a party source.
Newly-elected BSP parliamentarians, Lok Sabha elections candidates, zone in-charges and district presidents took part in the meeting at the party’s office in the national capita.
(ANI)
Dragon Dance In Kolkata
Chinese traditional Dragon dance performances held on the occasion of Dragon Boat Festival 2019 in Kolkata on Sunday.
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Economy Could Be Worse Than What Statistics Show
The biggest challenge for NDA-II will be to fix the faltering economy
The opposition though could never unite against the incumbent Narendra Modi government had a fairly good chance to put up a decent fight in the general elections had it been able to pin down the Hindu nationalist Bharatiya Janata Party-led National Democratic Alliance into debating the sputtering economy and never-ending rural distress during the long campaign.
But the Modi-Amit Shah duo was smart enough to steer clear of all that and focussed on the government’s success in fighting local terrorism and that originating from across the border. The damage that Pulwama terrorist attack could have done to the electoral prospects of BJP was more than compensated by way of a daring airstrike at a Pakistani terrorist base at Balakot.
Proving all psephologists wrong as the NDA was inching towards a decisive victory with BJP alone winning 303 seats in the 542-member Lok Sabha, some opposition leaders didn’t give up their claim to the prime minister’s office till counting of votes began. Congress president Rahul Gandhi’s not unjustified tirade that cronyism as evidenced in an Anil Ambani company securing a meaty contract in New Delhi’s Rafale jet deal with Dassault of France remained in practice during NDA I regime and his slogan relating to chowkidar (watchman) was turned on its head by Modi himself.
Naveen Patnaik, leader of Biju Janata Dal who has now won a fifth term as chief minister of Orissa, was an exception who could see what was awaiting an ambitious opposition but without any bearing. A gentleman politician that Patnaik is, he kept his distance from the “non-cohesive opposition” not necessarily because his “interaction with the PM has always been cordial and he proved to be helpful.”
If the economy does not function well, then the worst affected is the common man. The ones in the job market will be angry if employment opportunities are not there. That the opposition was not able to convert the disillusionment with the NDA’s indifferent economic performance into votes shows how cleverly Modi-Shah turned the discourse to the emotive national security issue and the Prime Minister’s success in raising the country’s profile abroad resulting in many leading companies from the US, the European Union and China making significant investments here.
But first, in what shape the economy was found when the electoral battle was fought. India’s gross domestic product growth at 6.6 per cent in the 2018-19 third quarter ended December was the slowest in five quarters. If anything, things had worsened since. There are reasons to believe that GDP growth in the year’s final quarter could be down to 6.4 per cent. The Central Statistics Office has recently further lowered GDP growth forecast for 2018-19 to 7 per cent from 7.2 per cent in January. NDA will in any case be boastful that India still remains the fastest growing economy among major nations.
For a nation with ambition of urbanisation and modernisation, it is important that industrial production should be recording significant rates of growth. But in the case of India with a population of 1.3 billion, industrial production fell steadily in the three months since December to finally contract by 0.1 per cent in March. What is particularly worrying is that manufacturing sector with a weight of 77.63 per cent in the index of industrial production shrank by 0.4 per cent in the final month of 2018-19 on top of a 0.3 per cent fall the month before.
India hardly had any export growth in the last five years. Economist Kaushik Basu, a former government of India chief economic adviser and now professor at Cornell University believes: “For a low wage economy like India, a little policy professionalism – a combination of monetary policy and micro incentives is all that is needed to grow this sector.” Unfortunately, all the government rhetoric of manufactured products, commodities and services should find their way into the world market in growing quantities has not been backed up by policy design. Economist Rathin Roy, member of the prime minister’s economic advisory council, is worried that the Indian consumption story is trailing off. He argues that India’s consumption is driven by its “top 100 million citizens” who could afford things like cars and air-conditioners.
But the NDA II will have to contend with the challenge of providing “nutritious food, affordable clothing and housing, health and education – the leading indicators of economic growth – for the whole population,” says Roy. But it is beyond the capacity of the government to arrange subsidies and income support to ensure consumption on this massive scale. Roy says: “At least half the country’s population should earn incomes enabling them to buy things at affordable prices so that a maximum of 500 million people can be subsidised for their welfare.” Roy gives the warning that unless India is able to achieve this in the next decade, it will be headed for a “middle income trap” when it will be face to face with the reality of not being able to achieve rapid growth easily and compete with developed economies.
The country’s economic situation may be worse than the information available from government agencies. This is because official data about growth and job situation are under cloud. The institutions associated with collection, analysis and dissemination of data have been for sometime subject to political interferences. Indian data like the Chinese are now seen with suspicion by institutions and economists here and abroad. The question is asked if the official GDP data faithfully reflect the multi-year lows in growth in power generation, air traffic and passenger vehicle sales.
Moreover, according to the Centre for Monitoring Indian Economy, the unemployment rate at 8.1 per cent in April 2019 was the highest in the last two and a half years. This is in spite of Modi, an autodidact, making the promise in 2014 that his government would create 10 million jobs a year. Notwithstanding Modi’s promise to double the income of farmers by 2022, rural distress, going by their indebtedness and inability to secure officially announced minimum prices for crops, except for wheat and rice, is on the rise.
The biggest challenge for NDA II will be to fix the faltering economy. As has been seen earlier in Gujarat when Modi was chief minister (2001-14) and thereafter in NDA I rule, he is inclined to be the final arbiter in economic decision making. But a problem is there as has been pointed out by Financial Times editor Lionel Barber and Morgan Stanley head of emerging markets Ruchir Sharma. Barber writes in FT: “But it is uncertain whether he (Modi) grasps the economy’s complex challenges, or the financial system’s woes. Nor is it clear that his few advisers have the technical expertise – or courage – to explain it, to help him calibrate his kinetic policymaking.” Sharma is equally emphatic that the prime minister needs “new voices in his brain trust… more expertise in his inner circle might have helped prevent an experiment like demonetisation.” Sharma has warned that the voters will not be found forgiving if Modi makes another big mistake like demonetisation.
When private sector investment is disappointingly low, a redeeming feature is the sustained interest of multinationals, which are already here to do more. The others are arriving in India at regular intervals. All emerging markets, including India want FDI as besides capital, it brings technology and create jobs. The Indian automobile industry is the best example of none of the major global brands wants to miss out on the promise that this market holds. Demand fall for vehicles is seen as a phenomenon that will go away in a few quarters. The latest to get into the Indian auto band wagon is Morris Garages owned by China’s largest automaker SAIC. At its Halol plant in Gujarat, MG will be making cars with 75 per cent localisation. That creates a lot of jobs. Similarly, Scandinavian furniture maker Ikea which made its debut in India in August 2018 is committed to procure at least 35 per cent of what is kept in its stores. Wal-Mart of the US completed a $16bn acquisition of India’s largest e-commerce firm Flipkart in August in the hope that the two would achieve a lot more together than each could separately.
Unfortunately FDI is still not significant in metals and mining in spite of the sector’s pressing need for foreign capital and technology. This is because at every stage leading to mining from exploration to prospecting to finally getting mining leases, investors will encounter frustratingly long bureaucratic delays. India will be a major gainer if the world’s largest producer of steel ArcelorMittal is not made to wait any longer to acquire the insolvent Essar Steel for which it has trumped all the other bidders. Insolvency & Bankruptcy Code says all resolutions must happen in nine months. But even after more than two years, ArcelorMittal has not got the ownership of the insolvent Essar Steel. Simpler rules and absence of red tape will make India an even more compelling destination for FDI.
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