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Change course, India will become a massive economy

 

India has the capacity to be a $ 5 trillion economy from today’s $ 2 trillion. Finance Minister Arun Jaitley is right in his assertion. But we need to change the course. Economic reform is a confusing word. It now means increasing disparity and moving the government away from the problem of the people.

Various epithets that describe it may speak of the reality but does not suggest a cohesive path. This is reflected in not so good farm growth though the GDP hovers between 7.6 and 7.9 percent. It also does not state that jobs are growing else firms hiring IIT and IIM graduates would either not “bench” them or cancel their appointments or renegotiate (reduce) the offered wages. Farmers are yet not happy, though, of late, NDA government focus is on them.

Disparity and despondency is growing. It is growing at every level – between the super rich and the rich, they and the upper middle class. The gap widens between the upper middle and lower middle and those below that level or on the fringe of poverty.

The complexity of the problem is increasing. The governments and policy planners are looking for ways. Many short-cuts like odd-even road rationing are just not administrative problem but it reflects the psyche of the deprived. There is an envy between those are “little” haves and those do not have that “little” also. The Jat or Patel clamour for government jobs’ reservation and consequent violence are signs of the restlessness. The earlier “haves” and now slipping to be have-nots are in severe social and economic stress. Why those who had earlier refused reservation are now demanding it? It reflects that there is a difference between statistical growth and happiness.

The state is unable to address these issues. These are not mere law and order problems.

The nation has to go deeper, sink political differences and should keep the society in a cohesive state. That is the first step towards real progress. It has to come out of the mere “growth” syndrome. It is only helping may be one section of the populace. They are becoming monopolists. They are trying to be owners of all aspects of the society.

It looks good to have a few powerful rich people. It does not solve the problems of the countryside, of deprived, semi-clad, hungry teeming millions though they are contributing to the progress of these people and possibly losing more.

If an economy improves, one does not understand, why the 80 crore farmers and related people, about 54 percent of the population, live in abysmal conditions. The latest National Sample Survey (NSSO) data on farm debt should be an eye opener. It says that of 9.02 crore families of farmers 52 percent were in debt in 2013, while ten years earlier, in 2003 it was 48.6 percent. Despite Rs 52,000 crore farm loan waiver before 2009 polls nothing has improved.

The farm families have an average debt of Rs 47,000. It is a testimony of not only failures of waivers but also for how small sums farmers have to look for loans.

The British rulers were stunned to find that multi-crop Indian agriculture was the foundation for a happy prospering country. Decades of neglect, some started by the British themselves, is causing havoc with the farm sector. Consequently, it hits all others and increases discontent in the society. It is no coincidence that be it Jats or Patels or others  in Maharashtra, Andhra, Telangana and Karnataka are from the farming communities.

This calls for a paradigm shift. The leadership of  Narendra Modi has ignited aspirations. As the regime is open to discussion, more suggestions are also coming. The massive mandate to him is the mandate to engineer that necessary change. With years of misguided rule, the path has become too complex. The government cannot abandon the path selected for decades all of a sudden. It also has to look for a new path and method. That is the challenge.

The economic pattern in this country has been that of cooperation from all social groups offering different skills. Still such social group or caste-based skills are not passé. Integrating such skills with the new Skill India is not easy. But the government has to look for avenues for integrating them. It has to go beyond the bureaucratic registration process to make most of Modi’s make in India to stand-up India a success. Many such people do not want to register. They want the benefit but they do not want to be socially seen as seekers of favour. It is a difficult social process. If they do not come forward, they lose and in the process the entire nation its society, economy and even political set-up become losers.

There should also be a policy discussion how the social groups which were strong pillars of India’s socio-economic structure can be rejuvenated without creating new problems or divisions. In short, the government has to include the existing skills with the new approach something that was trying to be attempted through the set-ups like master craftsmen.

The 35 percent rise in KVIC is an indicator that village workers can contribute. The village industries segment as a whole registered sale of Rs 36,425 crore during 2015-16 against Rs 31,965 crore during 2014-15. This marks a jump of 14 per cent. The growth in 2014-15 was just 6.29 per cent. The sales in 2013-14 were Rs 30,073 crore. This phenomenon has to be widened to include most of the country which remains out of its ambit.

The country also has to look ways to bring down prices and strengthen the rupee. Stronger rupee is a must for a growth that has to be all encompassing. High prices and taxes are bane of the economy. The new economy in the long run cannot be inflationary, discriminatory and exploitative. It should give support to the needy but avoid proffering doles.

It must be an open economy with few rules, paper work and virtually setting up path to fast decision making. It is not necessary to expand to $ 5 trillion economy or more but include all in that process. That is what an Indian pines for.

 

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