Monday , 16 September 2019
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Political Ascent And Economic Distress

Rajdeep Sardesai

Dear Prime Minister, 

Since this is the season for open letters, I thought I would pen one too.  At the very outset, let me congratulate you on the remarkable win in the 2019 elections. It is a truly staggering victory, one which should be largely credited to the strength of your personality-driven politics and Amit Shah’s relentless organisational push. We have already seen the impact of  the scale of  your victory on a bedraggled  opposition. Every day, in some part of  the country, we hear of  opposition leaders switching to the BJP. I don’t think this can be solely attributed to the misuse of  the enforcement agencies as the opposition alleges. We are a country of  the ‘ugtasuraj’ (rising sun) syndrome where opportunistic politicians move rapidly in the direction of  power. Its happened before in the Indira era when the Congress was the dominant party, its happening now when the BJP is the new political hegemon.  We’ve already seen how this hegemonical politics has virtually rendered parliament infructuous: with an overwhelming  majority in the LokSabha and a ‘manufactured’ majority in the RajyaSabha, you can now pass every contentious bill without parliamentary oversight.

But I shall not delve too deeply on the issue of  political immorality and the ‘Aya Ram Gaya Ram’ culture that reveals a complete breakdown of  the party system. Nor shall I spend this column venting on the creeping majoritarianism around us. You surely know of several instances of  lynching and mob violence linked to religious extremism. When a BJP Jharkhand minister is caught on video insisting that a local Congress MLA chant Jai Shri Ram, then you know just why a simple religious invocation has so rapidly become a provocative war-cry to intimidate fearful minorities. But again, I do not wish to focus on this despairingly polarizing  issue since I know what the response will be: law and order is a state subject and the central government can do little to stop the violence beyond the occasional advisory. Moreover, I do not wish to be labelled an ‘urban Maoist’, ‘Khan Market tukdetukdegang-ster’ ‘anti-national’,  and worse for speaking up for faceless fellow Indian citizens: in any case, the predictable narrative of  ‘what-aboutery’ (what about Partition/1984/Kashmiri Pandits etc) has left me mentally exhausted.

No sir, I will neither lament on politics becoming a one party, one man show nor agonise on the not so silent fracturing of  communal relations. Instead, I wish to draw your attention to the ‘real’ issue of  our times: the health of  our economy. It perhaps reflects the moral and intellectual bankruptcy of  the media, and the TV media in particular, that we have expended so little mind-space discussing just why, nearly a month after the budget, the mood has turned so grim in the business community. I do not claim to be an economic expert but have been listening to credible voices warning of the deepening fiscal crisis and the impact this could have on government spending. Or on the long-simmering banking crisis that has engulfed more and more financial institutions, NBFCs in particular. Or on the failure to incentivize private investment and boost consumer demand. Or indeed reports of  the steady flight in foreign capital.

Many of  these concerns have been privately whispered pre-budget too, its only now that some of  our industrial elite are beginning to slowly find their voice. After all, there is nothing like falling stock markets and a high tax regime on the ‘not more than 5,000 people in the super-rich category’ to make Indian industry suddenly discover their vocal chords. Their concerns are perhaps self-serving but they also do reflect a growing disquiet at the manner in which bureaucrats and policy makers in North Block are seemingly oblivious to the challenges being posed by onerous global headwinds and faltering domestic indices. It is almost as if  the constant  drumbeat of  having won such a big electoral victory means that the ‘professional pessimists’ (your words sir, not mine) are to be kept away at arms length, fearing that they could gate-crash the continuing celebrations. The feel-food factor, after all, is addictive, why do you need the nay-sayers to even mildly suggest that the Emperor for once may be losing his well-tailored clothes?

It is true that so far Sir your government has been remarkably successful in separating the economy from politics, a situation where economic health has little or no bearing on electoral success. Critics argue that this has been done by either fudging or suppressing crucial data or by shifting the blame all too easily on the inherited 70 years of flawedNehruvian economics. My own view is that your own relentless emphasis on pro-poor ‘welfarism’ has created a large political constituency of  potential beneficiaries of  government programmes who don’t really care if  the GDP is six or eight per cent so long as they get, or at least can aspire for a pucca house, an LPG cylinder or a toilet. But someone must pay for vote bank welfarism, and sooner or later, the numbers do begin to catch up. The discrepancy is already reflected in the mystery over the Rs 1.7 lakh crore missing in the budget documents: clearly, tax collections in the last financial year have been much less than expected and with a slowing economy, the fear is the numbers could only get worse. 

Which is why the government needs to come clean on the fiscal crisis. Making the finance secretary the fall guy for the politically contentious decision to raise monies abroad isn’t a solution. Nor can the answer lie in forcing (or should one say ‘robbing’) the Reserve Bank of  India to part with its well-protected funds (will LIC be next?). Nor can it lie in so-called disinvestment where one public sector giant is encouraged to buy out another. Or indeed in hiking fuel prices to a point where the middle class starts to really hurt. Or by imposing a multitude of direct and indirect taxes which eventually become a disincentive to investment and growth.  Nor can it lie in astute headline management where emotive issues like Article 35 A or mandir-masjid hijack the news agenda. No Sir, the first step to addressing the crisis is to snap out of  denial and accept that the ‘achche din’ are over. Then, get down to the ‘real’ business of  getting business back on track.

Post-script: This open letter should ideally be written by 50 top industrialists who should call for a structured dialogue with the government on the economy. Sadly, with one or two notable exceptions, I rather doubt that the cheerleaders from  Indian industry who almost reflexively give every budget 10 marks on 10 would dare show the mirror to government.

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