With the recent loss in Jharkhand, the BJP has consecutively lost five States, which includes Madhya Pradesh, Rajasthan, Chhattisgarh and Maharashtra in the past one year. When the BJP came to power at the Centre in 2014, it had a presence in just seven States but riding on the Modi charisma, the party won as many as 21 States by 2018. People hoped on ‘desh badlega’ (nation will change).
In December 2018, the BJP-led governments faced defeats in Madhya Pradesh, Chhattisgarh and Rajasthan, weakening the party’s grip over the Hindi heartland. The recent loss at Maharashtra was a major blow as the BJP lost both the State as well as a protracted political battle. In fact, BJP’s call to have simultaneous elections at the Centre and the State has now taken a backseat.
As BJP faced a staggering defeat in Jharkhand, and primarily due to infighting, the party is now left with 16 States. The footprint of the party covers at present 35 per cent of the country’s landmass in comparison to over 71 per cent in 2017 when it hit its peak. BJP’s defeat in five States within a year, despite fulfiling some of the key promises it made in its 2019 Lok Sabha manifesto – abrogation of Article 370, Citizenship (Amendment) Act, end of Triple Talaq and Ram Mandir – indicates, once again, that it is local issues and the state of the economy that decide the fate of an election.
While the social issues have been addressed by the present Central government, it is time that it needs to look into the economy and job creation. The pre-budget meetings with various stakeholders with the Union Finance Minister have already started and the hope is that the government keeps its ears to the ground. Elections are due in Bihar (Nov 2020), Pondicherry (June 2020), West Bengal, Tamil Nadu, Kerala and Assam (all in May 2021) and these will be very crucial for BJP.
Almost all Indian economic sectors, including that of auto, manufacturing, agriculture, FMCG, real estate and construction have seen a nose-dive, and official data released by the National Statistics Office (NSO) confirms that. Weaker consumer demand and slowing private investments are key factors behind the ordeal of core Indian sectors. Meanwhile, eight core economic sectors have registered a negative growth of 2.1 per cent in July 2019, compared to 7.3 per cent in the corresponding month a year ago. All these indicators explain the reason behind the recent jump in job losses. According to the Centre for Monitoring Indian Economy (CMIE), overall unemployment in India has now touched 8.2 per cent, with the urban figure as high as 9.4 per cent.
During the course of the GST Council meeting, Union Finance Minister Nirmala Sitharaman had announced in Goa in September the reduction in the country’s effective corporate tax rate from around 35 per cent to 25 per cent. For companies that do not avail of any other incentive or commission, the effective tax rate would be 22 per cent. However, several economists raised a simple issue that for a good economy, there should always be a perfect balance between demand and supply. With reduction of corporate tax only the supply side concerns were addressed and in all likelihood this benefit has not been passed on to consumers. Price rise on simple things like onions still pinches the common people.
The middle class income taxpayers have a very feeble voice before the government and they are feeling left out as no benefits or schemes have been tailor-made for them. Are they milching cows? It is time that the Union government should re-think its strategy?
