NYAY – ‘Create Jobs, Avoid Freebies'

Arup Chatterjee, 34, a business development consultant from Bhopal, who worked in the UK for four years, believes India can learn from the British social security schemes. He warns that handing out freebies like NYAY will only make them dependent on the state; the solution lies in creating more jobs.

I lived and worked for almost four years in the United Kingdom and came back in 2015. In these few years, I have been able to observe how both the countries help their poor. Unlike the UK, India took a long time to cope with the after-effects of colonization. As a result, both socially and financially, India remains backwards. However, now it is time to put an end to this, and that can be brought about only through a change in mindset.  

In case of populist schemes like Congress’ Nyuntam Aay (NYAY), I feel they are a way of giving handouts to people, which in turn, makes them lazy. India has a huge population of beggars, who would remain beggars and will have no motivation to work if they get money from the government. Thus, I don’t have high hopes from the as of now.

ALSO READ: Easy Money Makes People Lazy

The people who could benefit from such a scheme are the ones who work in India’s unorganised sector. Demonetization dealt a severe blow to these people and rendered them jobless. But I guess they won’t be covered under the NYAY scheme as they don’t belong to the poorest 20% of the population. Rahul Gandhi should look at addressing the problem of the unorganised sector as a whole. I have heard that he has talked about filling up 22 lakh government job vacancies within a year, if voted to power. 

Social security schemes for all sections of society in the UK are well-structured and India can learn a lot from it. However, I have seen many people turn lazy in the UK because the government supports them so well. We Indians generally don’t follow discipline, for e.g. standing in lines, but when it comes to freebies, ‘mamla air bigad jata hai aur log uspe toot padte hain’ (things get worse and people will go up to any extent to avail them). We need a social change where people understand that the government is there to help you only after you have tried to help yourself — himmat-e-mard madadan khuda (God helps those who help themselves).  

Whichever government comes to power, it must think about job creation and addressing unemployment. Women are more financially astute and they should more involved in such policy that would require large sums of money to be taken out from the exchequer.

The BJP government had also launched the PM-KISAN Samman Nidhi Scheme, which gives ₹2,000 every quarter to farmers owning agricultural land of less than two hectares. This is quite low in comparison to ₹6,000 per month, but BJP knows how to advertise its schemes better, while Congress/Opposition doesn’t. 

I also read that NYAY is expected to cost the exchequer ₹3.6 trillion or around 1.7% of the forecasted gross domestic product (GDP) for 2019-20. However, former Finance Minister P. Chidambaram has said that the cost will never cross 2% of the GDP. 

To put less burden on taxpayers, Congress is thinking about doing away with some subsidies as well as sharing the cost with state governments. Let’s see if it works, though I don’t have high hopes. 

Last time if I had got the chance to vote (because I was in the UK then) I would have voted for the BJP. However, this time despite seeing the tremendous infrastructural development around me, I am still to make up my mind whether to vote for it or not.

I am doing a lot of research before casting my precious vote and taking note of all facts and figures related to socio-economic development. Our city, Bhopal is known for communal harmony, but BJP is known for its divisive tactics and that is disturbing. I have seen people from all cultures coexisting peacefully during my stint in the UK and we need to bring back the thought of ‘unity in diversity’ in the mainstream to be happy as a country.

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Woman Holds Narendra Modi Cutout

Is It Advantage Modi Before The Elections Begin?

Even before the first vote is cast, and campaigning reaches its crescendo, Modi is probably entering the fray with an advantage.

A few days ago, one of India’s most respected and well-known senior TV journalists posted a tweet that was telling. She was reporting from the field in Baghpat in Uttar Pradesh and her tweet said: “A commonly described refrain about @narendramodi–not Pulwama, Balakot, or PM Kisan–is “he works really hard and he isn’t gaining anything for himself” – talking to voters in Baghpat. #OnTheRoad2019”. India’s national elections are less than a fortnight away and, increasingly, the views gleaned from the ground seem to point to a public mood that favours re-electing Mr Narendra Modi, his party, the Bharatiya Janata Party, and its several allies.

Dipstick surveys of the sort that journalists often resort to—talking to local cab drivers or roadside tea stall owners is one of the commonest tactics they use—are neither rigorous nor scientific ways of gauging the pre-election mood of an electorate, at least not of one that is as diverse, complex, and confounding as that of India’s. Yet, as we head for this year’s national elections (they begin on April 11 and go on for seven phases), what people outside the high-decibel chatter on social media platforms are saying bears consideration. Mr Modi and his government appear to elicit greater levels of faith among large swathes of India’s population. So, are they headed towards an election with a definite edge over their opponents such as the Congress party or the motley crew of other parties that have been trying to forge a grand alliance to oust the BJP-led government?

When it comes to campaigning for votes Mr Modi has a clear edge over his rivals. Whatever critics say, he’s probably the best orator in Indian politics today. His speeches may be peppered with “politically incorrect” statements (recently, while speaking to students at an IIT, he appeared to be mocking Congress president Rahul Gandhi as someone suffering from dyslexia), or repetitive homilies about how his government had delivered on what it had promised, or even inaccurate accounts of things such as India’s growth, employment generation, and poverty alleviation during his regime, but his oratorical skills are clearly a huge draw among ordinary Indians who usually come out in strength to listen to him at his numerous rallies. The average Indian sees Mr Modi as a strong, hardworking leader who is honest and selfless.

A gifted speaker, Mr Modi’s rally speeches are designed to touch the heart of his audiences. He speaks to them in simple language, although he has a penchant for coining acronyms, and is usually able to create a feeling of respect, admiration and trust among them. Through his tenure, he has leveraged this talent. His monthly radio talk, Mann ki Baat, which partly crowd sources its themes, and has a potential to reach 90% of Indians, is a huge hit. He has nearly 47 million followers on Twitter and has posted more than 22,800 tweets (Donald Trump has 59.5 million and 41,000 tweets) and even though he’s faced flak for not holding a single press conference since he became Prime Minister in 2014, his alternative way of keeping in contact with people seems to have borne fruit. No one except the media complains about the PM not holding pressers.

In several polls, confidence trackers and other devices of that ilk, Mr Modi continues to be head and shoulders ahead of his rival politicians when it comes to who most people would prefer to see as the leader of their nation. In contrast, the Congress president and Mr Modi’s main rival, Mr Gandhi, is still seen as a work in progress. That may seem amusing because at 48, Mr Gandhi may be a generation younger than Mr Modi, 68, but he’s already a middle-aged man.  Mr Gandhi’s election speeches are also not remarkable. He’s not as good a public speaker. But more importantly, his speeches lack the conviction that Modi’s speeches invariably seem to have. Also, during this election season, other than the announcement of a form of universal basic income for the poorest in India, in his public utterances, there has been little of his vision for a better India.

Mr Gandhi’s party just released its manifesto for the elections, spelling out what it would do if it came to power. It was no surprise that it promised a thorough investigation into the Modi government’s deal to buy Rafale fighter jets from France—a deal that the Congress and others believe smacks of corruption. But its main focus was on creating jobs; alleviating distress among India’s farmers; and, naturally, the minimum income scheme that Mr Gandhi had announced earlier, and in which Rs 72,000 a year would be paid to the poorest 20% of households.

The BJP is yet to release its manifesto—before the last election in 2014, it had done so only very late into the campaigning period. But it would be a real surprise if that document didn’t prioritise the exact same things that the Congress’s one has. The Modi government has been perceived to be tardy on issues such as employment generation and well-being of farmers. Political prudence would dictate that these issues would feature high up on the BJP’s manifesto as well. India’s problems—particularly on the economic development front are complex and so large that no aspirant for New Delhi’s seat of power can ignore them, least of all an aspirant wanting to be re-elected.

The outcome of India’s elections—they are complex and involve various permutations and factors that influence voters’ choices—are never predictable. The size and scale of itself is massive: 820 million voters; 930,000 polling stations; 1.4 million electronic voting machines; 11 million security personnel overseeing polling over seven phases. But so is the unpredictability of the voting trends. How a party fares in populous states such as Uttar Pradesh, Andhra Pradesh (now bifurcated into two separate states), and Maharashtra could be the determinant of whether it gets a shy at forming the government. Moreover, votes are cast on the basis of many other factors that go beyond economics and the personalities of leaders. Caste and religion create blocs of voters; and India’s population of 172 million Muslims who are its largest minority have not exactly been happy in the past five years under a government led by a party whose policies have always had Hindu nationalism at its core. Recently, at one of his rallies, while upbraiding the Congress for creating the term “Hindu terror”, Mr Modi implied Mr Gandhi was contesting from an additional Muslim-dominated constituency because he was afraid of losing from his regular constituency, UP’s Amethi. In 2014, when the BJP and its allies won 336 seats out of 543 in India’s lower house of Parliament, few psephologists had been able to predict that it would be such an overwhelming win. One reason why India’s pre-poll surveys often go horribly wrong is because of the diversity and sheer size of the electorate—huge numbers of voters; and a vastly diverse population, both in terms of demographics and psychographics. In a country of 1.3 billion, sometimes the biggest sample size you can manage to poll is quite often just not big enough. Yet, even before the first vote is cast, and election campaigning reaches its crescendo, it may not be wrong to say that Mr Modi is probably entering the fray with an advantage.

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#WhereAreTheJobs – ‘Job Market Is Pathetic’

I work as a journalist with Radio Dwarka (www.radiodwarka.com), India’s first online Community Radio, an initiative by a group of old media hands in Delhi. According to Wikipedia, community radio stations are operated, owned, and influenced by the communities they serve.  They provide a mechanism for enabling individuals, groups, and communities to tell their own stories, to share experiences and, in a media-rich world, to become creators and contributors of media. In short, it is a mini democracy in action, a media service of the people, for the people and by the people.

As a reporter I try to get an in-depth understanding of issues. I have been able to look at people’s confusions, aspirations and fears from close quarters. And in my opinion, our country is in urgent need of a Universal Basic Income. The employment situation doesn’t look that bright to me.

There are various schemes that have been introduced by the current government to skill people and generate employment. The government’s social media machinery has done a good job publicising these schemes. Youngsters from privileged backgrounds, who probably do not need to avail benefits of government schemes want to participate as volunteers wherever possible. However, the schemes should reach the people from the back of beyond, who really need them the most.  

Perhaps the most talked about business loan scheme is the ‘MSME Business Loans in 59 Minutes’.  Financial assistance of upto Rs 1 crore is given to micro, small and medium enterprises that form the backbone of any economy. MSMEs contribute to around 40 percent of the GDP. A time frame of 8-12 days is taken to verify the credentials of the business, but the actual approval or disapproval is given in 59 minutes flat. It saves one from so much stress.

Some day, I would like to start my own initiative –a community radio for my hometown, Gaya. Gaya has numerous stories in its bag apart from the Mahabodhi temple. The world needs to know about us. I keep updating myself about the various ways in which the government is aiding people, who want to work towards their own businesses.

As about voting in the last elections, yes I had voted for the BJP and my vote will again go to the same party.

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High GDP Growth May Mean Nothing For Most Indians

India’s favourite bugbear is China. So when India fares a little better on growth statistics or other metrics than China does, the jubilation is exuberant. Sometimes it is also misplaced. Such as when some Indian politicians exult over things that they certainly should not. A few years back when it was declared that by 2022 India’s population (now more than 1.32 billion) could surpass China’s (now 1.37 billion), quite a few totally uncalled-for cheers were heard as if having the world’s largest cohort of people was a good thing for a nation that is already heaving under the burden of a massive population.

At other times, the jubilation is over-exuberant. The most recent rousing cheers were heard when the International Monetary Fund (IMF) estimated that India’s Gross Domestic Product (GDP) would grow this year at 7.3% and next year at 7.4%, making India the fastest growing big economy in the world once again. The fact that IMF’s estimates for China for this year is 6.6% and for next year, a lower 6.2% quite likely cranked up the decibel levels for those cheers among political leaders. But percentages matter only in the context of the base levels that they relate to. China’s GDP in 2016 was USD 11.2 trillion; and India’s only USD 2.26 trillion. Do the math to see which country adds what to its GDP if those growth estimates are correct. The answer is a no-brainer; and it is about time India stopped comparing itself to an economic superpower.

Instead, it should look at more compelling issues. Such as whether GDP growth rate should be the appropriate measure of the well being of majority of Indians. The IMF’s growth survey lauds India’s government for implementing the contentious Goods and Services Tax, which in theory is supposed to have removed multiple layers of taxation and replaced it with a national tax. And it praises it for a new Insolvency and Bankruptcy Code, which ostensibly would make it easier to do business in India and enable quicker recovery of loans. Both these are still ‘works in progress’ and their efficacy would have to be tested by time. But those structural reforms (welcome, as they may be) apart, it is time to assess whether a higher GDP growth rate alone is enough for improving the economic well-being of Indians, more than 300 million of whom live on less than USD 1.25 a day.

GDP is an aggregate that when simply divided by the number of Indians to arrive at a per capita figure does not take into account the inequality and wide disparities in socio-economic levels among the population. Wide inequalities usually mean that when it comes to GDP growth, the benefits accrue in a highly skewed manner. Only a very small minority at the upper reaches of the income pyramid end up receiving most of the increases. Sample this: according to the Barclays Hurun India Rich List for 2018, in one city, Delhi, just 163 super rich people are estimated to have cumulative wealth of Rs 6,78,400 crore. That list is a compilation of Indians with a net worth of Rs 1000 crore or more. For the record, besides Delhi’s 163 super rich, there are 233 in Mumbai and 69 in Bangalore.

Even as those statistics boggle the mind, let’s shift the focus to jobs and job creation and the Indian economy’s record on that. In the first two years after the Modi government took charge in 2014, a research report, which was backed by India’s central bank, Reserve Bank of India, found that employment in at least 27 sectors fell by 0.2% (in the first year) and 0.1% (in the second year). That means it wasn’t that jobs were not created but actually the number of jobs shrank. These were years when GDP actually grew at an impressive pace: in 2014-15, it grew at 7.4%, and in 2015-16 it grew at 8.2%.

Government officials, including Prime Minister Narendra Modi, often harp on about how jobs are actually being created and employment is on the rise and how official figures are unable to capture that because much of it is in the informal sector. They tout the rise in employee provident fund accounts as evidence but this has been variously contested as not being an authentic method of counting jobs. More recently, there have been media reports of moves to stymie the government’s own labour ministry’s exercise of compiling data on job creation, ostensibly because the findings could be embarrassing.

Several surveys, including one summed up by the RBI’s consumer confidence index, show that the majority of Indians are not elated with their current economic well being, nor of what they expect in the near future. The rupee’s value has slid perilously, and fuel prices have shot up. Add to that continuing distress on India’s farms and frustration among its jobless youth.

But more important, India’s rankings on several other measures and indices are a cause for concern. On the Human Development Index, a statistic composite index of  life expectancy, education and per capita income, India ranks 130 among 189 countries. On the World Bank’s Human Capital Index, which attempts to measure the human capital (stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labour so as to produce economic value) that a child born today can hope to achieve by the age of 18, India is at 115 out of 157 countries. On the World Hunger Index, India languishes at 103 among 119 countries; and on the inequality index, it is ranked at 147 our of 157 countries.

India’s official response to these measures has been to question the methodology and find flaws with the surveys and data that are used to compile them. But instead of splitting such hairs, it may be time for those in charge of policies and governance to address other issues—such as the runaway growth in population; the widening inequality in income; and other skewed socio-economic indicators. As for the IMF’s optimistic estimates for GDP growth, it would be best not to exult over them or gloat about how we’re growing faster than a superpower neighbour.

Sanjoy Narayan tweets @sanjoynarayan  ]]>

Modi speaks on jobs, GST & farm distress

In his most recent interview to the media, Prime Minister Narendra Modi spoke to Swarajya magazine on an ambitious growth trajectory for a “New India” where he asserted that his government was on course to fulfill the promises made in the run up to the 2014 General Elections. LokMarg presents an edited version of the salient features in the interview which covered a wide range of issues economic and political: LACK OF JOBS More than the lack of jobs, the issue is a lack of data on jobs. Our traditional matrix of measuring jobs is simply not good enough to measure new jobs in the new economy of New India. I don’t blame our opponents for blaming us on the issue of jobs, after all no one has an accurate data on jobs. If we look at numbers for employment, more than 41 lakh formal jobs were created from September 2017 to April 2018 based on EPFO payroll data. According to a study based on EPFO data, more than 70 lakh jobs were created in the formal sector last year. Now, you know that informal sector constitutes around 80 per cent of all jobs. We also know that job creation in the formal sector can have a spinoff effect on job creation in the informal sector too. If 41 lakh jobs were generated in the formal sector in eight months, how much would be the total formal plus informal sector jobs? There is a lack of consistency in the political debate around job creation. We have data put out by state governments on employment. For example, the previous Karnataka government claimed to have created 53 lakh jobs. The West Bengal government said it created 68 lakh jobs in the last term. Now, if states are all creating good numbers of jobs, is it possible that the country is not creating jobs? Is it possible that states are creating jobs but the Centre is creating joblessness? FARM DISTRESS AND RISING DISCONTENT We have a stated aim of doubling farmers’ income by 2022. To this end, we need to augment their sources of income and decrease the risks they face. We are following a four-pronged strategy to achieve the goal of doubling farmers’ income: 1) decrease the input costs; 2) ensure proper prices for the produce; 3) ensure minimal harvest and post-harvest losses; and 4) create more avenues for income generation. If you focus closely on our policy interventions, they are aimed at helping farmers at every step – beej se bazaar tak. If you want an idea of what changed under our government, just remember the condition of farmers during those years. They were forced to do farming which was unscientific, they faced lathis for obtaining urea, they did not have a proper crop insurance cover, nor did they get proper prices for their produce. To make farming scientific, farmers are now equipped with soil health cards. Shortage and scarcity of urea is a thing of past and neem-coated urea is improving productivity. Now the farmer has a holistic crop insurance cover with PM Fasal Bima Yojana. Not only will the farmers get minimum support price (MSP) of 1.5 times their cost, they also have more avenues to get the right price with the help of e-NAM (the electronic National Agricultural Market which provides price, production and market information to farmers). GOODS AND SERVICES TAX Let me start with some numbers. The number of enterprises registered from Independence until now was 66 lakh. In just one year after the introduction of GST, the number of new enterprises registered is 48 lakh. Around 350 crore invoices were processed and 11 crore returns were filed. Would we be looking at such numbers if GST were indeed very complex? On the multiplicity of slabs, it would have been very simple to have just one slab, but it would have (also) meant we could not have food items at zero per cent tax rates. Can we have milk and Mercedes at the same rates? Check-posts across the country have been abolished and there are no more queues at state borders. Not only are truck drivers saving precious time but also the logistics sector is getting a boost and thereby increasing the productivity of our country. Would this be happening if GST was complex? The reform merged 17 taxes, 23 cesses into one single tax. When it was finally introduced, it was our endeavour to make it simple and ensure sensitivity of the system. There are often teething troubles but GST is an evolving system and we calibrate it based on feedback from state governments, people, media, etc. PUBLIC SECTOR BANKS We had identified the problem with banks in 2014 itself. A retreat of bankers was held in Pune where topmost officials attended. I told them to go about their work with utmost professionalism and clean the sector. I assured them that the long-standing culture of phone calls from Delhi influencing their working is not the way our government works. This is what enabled the true state of affairs to come out. Earlier, if someone owed Rs 500 crore and when it was time to repay that loan, a phone call from Delhi would ensure another loan of Rs 500 crore is given so that the previous loan was repaid. This cycle persisted. We stopped this. This is why the old loans had to be shown as NPAs. Now (with the Insolvency and Bankruptcy Code), many businessmen have had to lose their companies for failing to pay bank dues. Bank mergers were merely being talked about before, but not implemented. We have moved ahead. Did you see the merger of five banks? (The complete interview can be read here)]]>