Economic Survey the Mismanagement of Modi Sarkar!
Economic Survey attempts to portray the Indian economy as one of glowing
promise and rosy heath. Unfortunately, the true story that emerges is of an
underperforming economy, mismanaged by the BJPled NDA government, but bailed
out profiteering from falling crude oil prices.
Economic Survey points out that the government is relieved that it has met its
Fiscal Deficit target of 3.9%. But the Economic Survey reveals that the
government has missed its disinvestment targets by a mile. Then the questions
arise: Is the fiscal deficit target met because of the constructive actions of
the Modi government or is it a result of the oil price bonanza amounting to Rs
2,20,000 Crores? At whose cost has this deficit target been met? Isn’t it
fleecing the ordinary Indian?
revenue figures in the Economic Survey point out that indirect taxes grew by
34.8%. This is because of multiple hikes in excise duties imposed by the
government as oil prices fell from around $120/bbl in May 2014 to below
$30/bbl. Indirect taxes are fundamentally regressive and hurt the poor more.
This government has worked to meet its fiscal deficit targets by
squeezing the poor. Instead, it could have cut taxes, reduced inflation and
provided a boost to real incomes of the poor.
India is paying a heavy price for the government’s mismanagement. Instead of
addressing the concerns of the Rural Economy in distress, the Economic Survey
seeks to tax the already burdened and debt ridden poor Indian farmer. Having
failed in its attempt to usurp farmer’s land
through the amended Land Acquisition ordinance, it seems that Shri Modi is
seeking revenge against the farmers by taxing them. The Economic Survey
highlights the need to reform agriculture. Infact, this is window dressing for
this government’s aggressive neglect of the farm sector that shows up in the
steep fall in numerous indicators from the Economic Survey below:
government feels safe hiding behind deceptive figures such as WPIbased food
inflation at 2.2%. Yet it completely ignores the spurt in the prices of pulses
and other essential commodities that have hugely impacted the poor. In November
2015, because the government failed to bring in effective policy measures and provide
higher MSP for producers, it was forced to import 10 million tonnes of pulses.
The Survey shows how the price of pulses have been high and beyond
the reach of the common man. Nutrition and health of the poor consequently
Economic Survey focuses on subsidy reform, it explicitly targets those that
benefit the lower middle class and the poor. Yet, in contrast, the government continues
to forego revenue
for the benefit of crony capitalists, assuring us that it continues to be a
Suit Boot ki Sarkar.
Non Performing Assets of the Public Sector Banks are not being addressed, with
Finance Minister Shri Arun Jaitley unable to work out a plan to rescue
distressed banks. This huge NPA burden has triggered low credit offtake in core
sectors resulting in a vicious cycle of economic deacceleration.
credit flow to the industrial sector, including mining and manufacturing, has
slowed down in 2015-16 as compared to 2014-15. Strikingly, the growth of credit
flow to the manufacturing sector was only 2.5% in 2015-16 (up to December) as
compared 13.2% in 2014-15 (up to December). These numbers from the Economic
Survey clearly indicate that Make in India remains an empty slogan.
Economic Survey devotes chapters to the plight of the Mother and Child, Social Infrastructure,
Employment and Human Development. These chapters delineate how the education and
health sectors have taken a hit thanks to the cuts in Centrally Sponsored
Schemes initiated by the Modi government. India’s states have not been able to
make up the shortfall and mother and child and human development suffer as a
Economic Survey has said that there is a severe quality gap and lack of available
training in skill development. It has exposed the reality of the implementation
of Skill India which will impact the possibilities for Make in India.
trade front, the Economic Survey shows a dramatic fall in both exports and
imports. It blames external factors and a sluggish world economy. But other
countries, e.g., Vietnam and Bangladesh,
are doing fine. The fact of the matter is that the global economy has been bad
since 2008, but India’s exports and imports have never been affected the way
they have been now.
contracted for 2 years consecutively. Cumulative exports in 2014 (till Dec)
were $239 billion, cumulative exports in 2015 (till Dec) were only $196 billion
— an overall 18% decrease! Non-oil, non-gold imports also fell 20% in November.
Engineering goods (21.9% of the total exports), saw a drop of 11% in the
April-October period. Gems and jewelry (13% of total exports) also saw a
decline of 7% in the same period.
Government gave great momentum to the free trade agreements which the Economic Survey
points out have ‘increased trade with FTA countries more than would have
happened otherwise’. But clearly, this government has missed the bus on the
Trans Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment
Partnership (TTIP). TTP will cover 40 per cent of global GDP and 33 per cent of
world trade. This will benefit other nations like Vietnam at the cost of India.’
A lot of
India’s economic health rests on low oil prices (and the monsoon). If global
oil prices turn around next year, India will find meeting its fiscal deficit target
of 3.5% very difficult. It is our worry that the government will then try to
meet its targets by putting off some portion of the Pay Commission hike or of
OROP. Worrying days ahead!