By Shivaji Sarkar
The economic situation is complex. So is its understanding. India feels happy as macro data indicates an economic turnaround but signals from Maharashtra farmers or steps to impose congestion tax or 133rd position in the World Happiness Index are clear pointers to the massive effort the country needs to undertake.
The global situation itself is not happy. India with its large population and having the largest number of poverty stricken is not in unenviable situation. It is exacerbating with increasing protectionism and US President Donald Trump’s plan to make America great again. Indeed, it’s an uneasy world.
Steering the country through such myriad situation is not a comfortable job with a restive population, who wants the Government to function like the genie. A small slip or not, leads to uncomfortable election results as seen in Gorakhpur, Phulpur (Allahabad) and Araria (Bihar) Lok Sabha elections.
After years of difficulties, less job growth, problems in the farm sector, high tolls and taxes, the people do have higher aspirations. The results in Uttar Pradesh are a surprise after the massive investors’ summit that saw Rs 4 lakh-crore commitment from 1045 MoUs. UP Chief Minister Yogi Adityanath was proud to announce: “We are heading towards a new UP. We are gradually shedding the Bimaru tag”.
Indian economics or politics cannot sustain on statistics. It needs much more. It is in search of happiness and is slipping on that score. Disparity is increasing. Despite some recent slowdown in inflation, overall situation needs concern.
Economists have failed in suggesting effective ways to curb the growing inflationary situation since 2010. Consumer price indices have risen over 60 per cent. Pay hikes are not enough to curb the discontent. People wonder why despite crude prices stagnating around $ 60-64 a barrel, half of what was during the UPA regime, petrol prices continue to rise every day. The economists have created a fear psychosis among planners to rake in more revenue forgetting it hurts the basic economics.
The Government has now better connectivity with the people. It needs to realise that all government and semi-government organisations such as municipal corporations, panchayats, oil companies, NHAI, banks, electricity, water boards and other utility services are perceived as extortive, indulging in profiteering and greedy. Every paisa they earn adds to inflation.
India has the most unstable price regime. While boasting of ease of doing business, the country needs to keep the prices, not through artificial means, affordable. Wages must rise, as now bankmen are demanding, but economists have to devise a long-term solution as to remove the basic reason for that. Prices must remain stable and greedy government organisations must be put on leash.
India is not Singapore — a 700 square kilometer of land area. Bureaucrats who suggest congestion tax on its model forget the level of affluence there and the highest number of poor living in the national capital of Delhi. They are unaware that Delhi metro is unaffordable for slum dwellers. Is there logic of charging toll of Rs 100 per entry for a taxi (used by people under compulsion) and higher rates for goods vehicle? The economists do not realise that ultimately toll charge is paid by poor consumers and increases price of every commodity.
While taxing all sales under GST, they forget that most Indian small businesses’ profit is limited to whatever tax they can save. The so-called “tax evasion” is a compulsion in a country with a complex multi-tax regime. Despite the GST, States are continuing with excise and so many other levies that are supposed to have been subsumed by GST. The GST Council has to look into it.
Piecemeal solutions have led to political quagmire. The country forgets that in October 2012, thousands of poorest of Indian farmers from Kerala to West Bengal to the North-East gathered in Gwalior for marching to Delhi. Veteran activist PV Rajagopal, who organised the yatra, and made his name negotiating the surrender of bandits in MP in 1970s, then had said that the participants’ aim was not just to win a ‘right to land’ but to fundamentally alter the direction of India’s development.
“There is conflict at every level with the model we have now. Gandhi’s vision in this country is being rejected every day. Now we have a capitalist, consumerist model. If India does not change this, the writing is on the wall,” he said. However, a similar but smaller march in 2007 had had an insufficient impact.
There are many who may argue that such views are naive and that India’s development – and therefore the eradication of poverty — depends on urbanisation, massive investment in infrastructure and the development of a manufacturing base capable of providing employment for huge numbers of people, especially the young. But six years later, in March 2018, again 35,000 farmers marched from Nashik to Maharashtra secretariat in Mumbai after a 180 km-weeklong-trek for the same demands and protection of their livelihood.
Since the CPM-led All India Kisan Sabha (AIKS) was behind this move, it is being perceived as that the Left still possibly is not irrelevant in Indian politics despite their decimation in Lok Sabha. The reality is most farmers, 70 per cent of them debt-ridden, are not AIKS members but they hold the key to change the political direction. The farmers needed someone to organise and help vent their grievance. If Bharatiya Kisan Sangh had taken the lead they could have gone with them too.
This raises the fundamental question on country’s economic model. There has been a clamour for changing that model within the Congress in 2012. The echoes could be heard today in all other parties. Yes, India has to plan for happiness and not just growth. The Narendra Modi Government has the opportunity to reshape the country’s economy on Gandhian principles or Deendayal Upadhyay’s integral humanism – ekatma manavavad.
The present growth model has benefited a small population and caused deprivation for a larger number. If Donald Trump has to be defeated in his global trade war, it can be done by uplifting India’s poor farmers, who have the capacity to be the pivot of the economy, a factor the liberalised-globalised world ignored.
Let the country debate but act fast to reorient the economic model. Farm distress is a socio-politico-economic reality. It calls for change in the price-tax regime and a real equitable society, where the food grower is given respect, better livelihood and not doles in the name of waivers. —INFA