BRP Bhaskar
Gulf Today
Prime Minister Narendra Modi has lifted the Indian economy up, making it more competitive than it has ever been, the World Economic Forum said in a report last week. Ironically, the testimonial came as he was coping with the adverse effects of demonetisation of high-value currency notes and introduction of goods and service tax (GST).
Cheer leaders at home, aided by the quiescent media, were working overtime to create the impression that all was hunky-dory. A senior leader of Modi’s Bharatiya Janata Party, Yashwant Sinha, pricked the bubble. “The economy is on the downward spiral, is poised for a hard landing,” he said. “Many in the BJP know it but do not say it out of fear.”
In a long, clumsy sentence, Sinha gave a worrisome picture of the economy: “Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction, a big employer of the work force, is in the doldrums, the rest of the service is also in the slow lane, exports have dwindled, sector after sector is in distress, demonetisation has proved to be an unmitigated disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market.”
Sinha, who had resigned from the Indian Administrative Service and entered politics in 1984, was Finance Minister in Janata Dal leader Chandra Shekhar’s government. Later he joined the BJP and served in AB Vajpayee’s government first as Finance Minister and then as External Affairs Minister.
Modi did not respond to Sinha’s criticism. He assigned the task to Sinha’s son and Minister of State for Civil Aviation, Jayant Sinha, who claimed the government had created a robust new economy which would power long-term growth and job creation.
Sensing that the son’s defence was weak, three senior members of the government, Finance Minister Arun Jaitley, Home Minister Rajnath Singh and Railway Minister Piyush Goyal joined the fray. Jaitley insinuated that Yashwant Sinha, who is 80, was wangling for his job.
Before Sinha, two other BJP leaders, Subramanian Swamy and Arun Shourie, had criticised the government’s handling of the economy but few took them seriously as they are disgruntled elements.
More often than not, an economic decline is the result of factors beyond the government’s control like a bad monsoon which ruins agriculture or external developments which push up oil prices. There has been no such development in the recent past.
What has brought about the present situation is Modi’s attempt to replicate the reforms with which he had supposedly transformed Gujarat’s economy as its chief minister. Within three months of assumption of office he wound up the Planning Commission and brought into being a think tank named National Institution for Transforming India (NITI) Ayog, modelled after China’s National Development and Reforms Commission. He also abolished the Prime Minister’s Economic Advisory Council, a body of experts which had helped his predecessors by providing independent advice.
Under the new dispensation, sectors like education and health suffered. Much of the money allocated for these sectors went into institution building, resulting in a shortfall in the funds available for improving the lot of the people, especially the poor.
In an insightful analysis, Professor Maitresh Ghatak of the London School of Economics said Modi did not have on Gujarat’s economy the transformative effect he was touted to have. His centralised style of governance might have worked in Gujarat but was unsuited for running the economy of a country as large and diverse as India.
Ghatak welcomed the revival of the Prime Minister’s Economic Advisory Council. “We do need experts,” he said, adding: “We also need a government that listens to them.”
Making a pointed reference to the exit of Raghuram Rajan, who was Governor of the Reserve Bank of India, and Arvind Panagariya, who was Vice-Chairman of NITI Ayog, he wished the new group of experts would have a long tenure and freedom to pursue policies that would lead to course correction.
The immediate challenge before Modi, who has to face the electorate in 2019, is to create jobs to absorb the one million people entering the workforce each month. According to government figures, currently job creation stands at just over 10,000 a month. -Gulf Today, October 3, 2017
Gulf Today
Prime Minister Narendra Modi has lifted the Indian economy up, making it more competitive than it has ever been, the World Economic Forum said in a report last week. Ironically, the testimonial came as he was coping with the adverse effects of demonetisation of high-value currency notes and introduction of goods and service tax (GST).
Cheer leaders at home, aided by the quiescent media, were working overtime to create the impression that all was hunky-dory. A senior leader of Modi’s Bharatiya Janata Party, Yashwant Sinha, pricked the bubble. “The economy is on the downward spiral, is poised for a hard landing,” he said. “Many in the BJP know it but do not say it out of fear.”
In a long, clumsy sentence, Sinha gave a worrisome picture of the economy: “Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction, a big employer of the work force, is in the doldrums, the rest of the service is also in the slow lane, exports have dwindled, sector after sector is in distress, demonetisation has proved to be an unmitigated disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market.”
Sinha, who had resigned from the Indian Administrative Service and entered politics in 1984, was Finance Minister in Janata Dal leader Chandra Shekhar’s government. Later he joined the BJP and served in AB Vajpayee’s government first as Finance Minister and then as External Affairs Minister.
Modi did not respond to Sinha’s criticism. He assigned the task to Sinha’s son and Minister of State for Civil Aviation, Jayant Sinha, who claimed the government had created a robust new economy which would power long-term growth and job creation.
Sensing that the son’s defence was weak, three senior members of the government, Finance Minister Arun Jaitley, Home Minister Rajnath Singh and Railway Minister Piyush Goyal joined the fray. Jaitley insinuated that Yashwant Sinha, who is 80, was wangling for his job.
Before Sinha, two other BJP leaders, Subramanian Swamy and Arun Shourie, had criticised the government’s handling of the economy but few took them seriously as they are disgruntled elements.
More often than not, an economic decline is the result of factors beyond the government’s control like a bad monsoon which ruins agriculture or external developments which push up oil prices. There has been no such development in the recent past.
What has brought about the present situation is Modi’s attempt to replicate the reforms with which he had supposedly transformed Gujarat’s economy as its chief minister. Within three months of assumption of office he wound up the Planning Commission and brought into being a think tank named National Institution for Transforming India (NITI) Ayog, modelled after China’s National Development and Reforms Commission. He also abolished the Prime Minister’s Economic Advisory Council, a body of experts which had helped his predecessors by providing independent advice.
Under the new dispensation, sectors like education and health suffered. Much of the money allocated for these sectors went into institution building, resulting in a shortfall in the funds available for improving the lot of the people, especially the poor.
In an insightful analysis, Professor Maitresh Ghatak of the London School of Economics said Modi did not have on Gujarat’s economy the transformative effect he was touted to have. His centralised style of governance might have worked in Gujarat but was unsuited for running the economy of a country as large and diverse as India.
Ghatak welcomed the revival of the Prime Minister’s Economic Advisory Council. “We do need experts,” he said, adding: “We also need a government that listens to them.”
Making a pointed reference to the exit of Raghuram Rajan, who was Governor of the Reserve Bank of India, and Arvind Panagariya, who was Vice-Chairman of NITI Ayog, he wished the new group of experts would have a long tenure and freedom to pursue policies that would lead to course correction.
The immediate challenge before Modi, who has to face the electorate in 2019, is to create jobs to absorb the one million people entering the workforce each month. According to government figures, currently job creation stands at just over 10,000 a month. -Gulf Today, October 3, 2017
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