My View Today
31-8-2019
Present Economic Crisis in India
Chanchal Chauhan
Three years back I had written a small article on
Indian economy, ‘Greek Tragedy knocking at India’s door’. I had my logic to
forecast that by the year 2018 India would face a severe economic crisis as
Greece had faced during that period. I am not an astrologer, but a rationalist
and that is why what I had forecast has come to be true now. I had sent that article to Mr. Manas Chakravarty
of Mint paper, he humbly directed me to send it to the editor. I sent it
to the editor, Mint who did not have courtesy to respond. (I can show
the emails)
Then
I sent it to some other newspapers too but no media person responded. In fact,
at that time all these journalists were under the spell of Modinomics. Most of
them still believe that by the magic wand of Modinomics ‘the
country is poised to become US$ 5 trillion economy by 2025 as envisioned by
Indian Prime Minister Narendra Modi ’Again a big lie! The lie is
exposed by Niti Aayog vice-chairman Rajiv Kumar who says
‘nobody had faced this sort of situation in the last 70 years wherein entire
financial system was under threat’.
The lie is exposed by the corporate houses themselves that insert advertisements
in national newspapers for a bail out. If God’s in his heaven and all’s right
with the world, then why the cry, ‘SAVE PAPA’? The former economic advisor to
PMO has shown his disgust to this cry.
I
could not get my article published in any newspaper, as I am not a celebrity, perhaps
they just laughed at me, and did not see ‘method in madness’ of an ordinary
citizen who does not take seriously any ‘Jumla’ of the RSS-BJP’s illiterate
Pracharaks and believes in the rational behaviour and scientific temper.
Then
ultimately on 20 July 2016, I uploaded my article on my own website
http://www.chanchalchauhan.in/Greek-tragedy-knocking.html My article is
still there listed in the ‘Archive’ section.
The
reasons given for this crisis in my article cited above are still valid and a
number of guest panelists on TV debates now give the same reasons. But the
solutions to this crisis that are generally suggested do not convince me. Some
suggest more investment in the industry as Vice Chairman of NITI AYOG does,
some suggest ‘infusion of capital into Banking sector’, As a solution to the
crisis, the RBI is reducing the repo rate on a regular basis, the banks lower
the interest rate on loan and also on fixed deposits. The Government has taken
a big chunk of the Reserved fund from the RBI. This move was resisted by
earlier governors of the RBI as they knew that it was not a wise move to boost
the ailing economy. This money will again reach the coffers of the big
corporate houses that cry ‘save PAPA’ or through recapitalising the banks that will transform the capital again into
more NPAs and thus the crisis will
further escalate. The FM has declared concession for more FDI in retail as a
piecemeal remedy to the crisis. She does not tell the people that a big chunk
of foreign investment in India has left the country recently after earning
profits from the stock market that resulted in the steep fall of value of rupee
that is already in the ICU
Asking
for more investment as a solution to the crisis is quite illogical. There is no
shortage of finance capital in the globalised world today. The IMF, World Bank,
ADB and various arms of the international finance capital are ready to provide
more loans. The foregn debt on India is already as high as US$ 543.8 billion, on June 2019. Under UPA regime it was only US$
474.675 billion. The fresh inflow of
finance capital will again be converted into goods and services, commodities
for sale. But where are the buyers? Cars and other vehicles are not slices of
bread or a pouch of milk that can be consumed on daily basis. Those who have
means to buy a car have already done so. If vast population is deprived of
income, how can people buy a car or a bike? So the automobile industry is in
trouble. The problem is that people without any income cannot buy even clothes,
that is why even textile industry is in crisis.
If no new jobs or means of income are
provided, and present work force is retrenched, how can one expect new buyers of the stock and inventories waiting
to be cleared? Thus the capital invested is dumped in the stores in the form of
commodities. Even HUL that produces commodities of daily use is facing a crisis
and it has lowered the prices of some of its items to boost the demand. The
jobless growth played havoc with the work force and thousands of workers in
various sectors retrenched or fired every day.. This factor along with some more
causes is totally ignored by the conformist economists.
So
the real bottleneck is the ‘lack of demand’ created by the policies dictated by
the World Bank and IMF and implemented obsequiously by NDA government that
supported the richest and sucked all the cash from the pockets of the poor by
various measures, such as by increasing railway fares, then every day
increasing prices of petroleum products,
demonetisation,
GST and ignoring the rural distress. The NDA leadership cunningly raised the
slogan of nationalism and surgical strikes against Pakistan to win the election
this time. The economy is no priority of this Government. Let the academic economists
make a hue and cry, let the Vice Chairman of NITI Ayog shed tears on the condition
of Indian economy, let the corporate houses advertise their appeal, the market
economy will take care of itself. The NDA government is not going to mend its
ways.
Our honourable PM who once boasted in Lok Sabha that he was wiser
than “Harvard economists”, remained busy mostly in foreign tours seeking FDI or
purchasing war planes. At home, he always enjoyed to be a Sangh Pracharak and
not the PM of the country. All of his speeches inside or outside Parliament had
to be Election speeches, and after winning the General Elections, 2019, he
began to provide training to his cadres to win the next General Election in
2024. That is why, the country is still fed with emotive issues based on
Hindutva agenda and every day a step is taken to polarise the Indian citizens on the divisive lines. The issues
that directly or indirectly target Muslim community are given the top most
priority. For example, look at the moves
of creating the NRC in Assam, the Bill on ‘TripleTalaq’ and abrogation of
article 370 and 35 A. All these are glaring examples of the dangerous moves of the Hindutva forces to
tarnish the image of a whole community and treat it as the ‘other’.
These
steps will hardly benefit any community by any logic, but surely polarise
the citizens of India and will become a tool to win
any future election. No body will listen to the sensible voice, no body
will
care for the thousands of workers that are rendered jobless every day.
All of
them lose their purchasing power, so the goods and services now rot in
the stores
and markets. Those waiting for jobs will get nothing in this scenario
of
recession, so they too will not purchase a vehicle or buy a home.
Farmers are
hard hit by natural calamities such as droughts and floods and the
menace of
stray ‘mother cows’ destroying valuable crops of farmers. Moreover, the
agricultural produce does not fetch enough cash to purchase commodities
produced by the corporate houses that became richer by selling earlier
their
goods and services on high profit. Still the farmers have to purchase fertilisers, pesticides, seeds and other necessities by taking
loans from banks or local money lenders. While in distress they fail to repay
loans, they commit suicide. The official economists and even academics hardly
take into consideration the bitter fact that large number of suicides
too hit the economy as the bereaved
families can purchase nothing after the loss of that precious life, the
head of
the family. The same logic applies to war and communal violence when
thousands
of people and soldiers lose their lives and leave behind them a trail
of
poverty for the bereaved. Thus the economic growth is hit hard by such
foolish
acts too. All economic activities including tourism and
horticultre have been hit hard by Modi government and its steps
will hit further Indian economy
The
Modi government is hell-bent on privatisation
of a number of public sector undertakings. We all know that a number of private
companies and even banks turned bankrupt and left the country. Still the
government following the neo-liberal regime pushes privatisation that leads to retrenchment of workers and that is why
the workforce resists such moves. The workers of many PSUs are on war path
against the moves of privatisation of their companies
because they know the move will again add to their woes and thus add to the
illness of economy. The SC, ST and OBC aspirants of jobs are hit hard as there
is no reservation for them in the private sector. They have already been
alienated by the policy of outsourcing and contract labour.
But
alas! These foolish acts of spoiling Indian economy are pursued without caring
for any advice. That is why all economic advisors with self-respect left the
Modi government and India too. Modi-Shah duo does not care a fig for economy.
They are adopting measures to create an atmosphere of communal hatred, both
physical and mental, against Muslims. A war against Pakistan may also be on the
agenda of the BJP-RSS to win the next Elections and then converting the
secular democratic republic into a Hindu Fascist state, may be, in the form of a
military dictatorship for which a new post of the Chief of Defence Staff has been announced by the PM in his Red Fort
speech recently.
But
who will bell the cat?