The results of the Lok Sabha elections gave another resounding mandate for the Modi-led BJP Govt. The citizenry, despite a much weakened economy, a far more adversarial relationship with Govt, lower wages, a jobless market, rising prices, falling exports and a slide to the bottom in important indices of human well-being, appeared bent upon a mandate for a communally polar nation. It was as if communal polarity was a more laudable goal to achieve, than personal well-being, or that of the family. And in this decision, lies the fate of India, for the next half decade.
Over the time that humans have pursued the intellect as a means to better their future, the notion of consequences has been honed to a fine art. We can, armed with the knowledge of outcomes, with very fine granularity in most cases, predict the consequences of our actions, whether in economics, geopolitics, foreign or trade relations, as well as in many other fields.
A short sifting of outcomes and consequences should be in order, at least for those who wish to sink with their eyes open. And which better point to begin from, than demonetisation?
Those in precarious financial straits, sank on Nov 9, 2016, with no money to even a meal and not enough financial standing to attract a loan. Those just above that line, sank sometime in mid December 2016, when large denomination demonetised notes were no longer accepted for exchange by banks. But those were apparently inconsequential people. The citizens who have never counted in the scheme of things, since 2014, people who moved on bicycles as the only means of transport they could afford, suddenly brought down to walking to work; those who could afford a powered two-wheeler, reduced to walking to work.
In the beginning, it mattered little to the burgeoning corporate bourgeoisie, that the small man had lost everything. It mattered little, because she was still the recipient of a corporate salary.
Till the corporates started getting hit, in a relentless depression that took the bottom out of a robust and growing economy, and began dispensing with their minions. The sudden surprise with which corporate India was hit, with the vanishing bottom of the economic pyramid that had sustained their earlier profligacy, brought about delusionary stories about how automation and artificial intelligence had taken a toll of Indian jobs! Those however, with a light touch on the pulse of the economy, were reminded of the adage about artificial intelligence being no match for natural stupidity.
After taking out the bottom of the economic pyramid, came the BJP’s GST, a taxation regime so cumbersome and stupid, that it blew a hole into a few million more small businesses that had managed to survive the downturn imposed in November 2019. For a Govt to think, that with the miniscule percentage of Indian businesses with access to computers, a taxation regime completely dependent on such machines would come out a winner, has been belied by the outcomes of the GST regime.
Far less businesses than those registered under the Sales Tax and VAT regime, are now registered within the GST regime. A predicted monthly GST collection of Rs 1,35,000 crores, began with a collection of less than Rs 80,000 crores and is today still just over Rs 1,00,000 crores; resulting in a Govt that has been bleeding over Rs35,000 crores every month.
No wonder then, from BHEL to ONGC, HAL to the RBI, every public sector company, every public sector institution, has been recruited into funding Govt miscalculation and sophistry, thereby denuding all of them of their reserves and the ability to negotiate a rough business patch.
Such economic profligacy comes with a nasty price-tag. With social sector spending at an all time low, education, health care, vaccination, poverty alleviation, in all of human development, India has sunk to the bottom handful of the poorest of poor nations. For a nation fed with delusions of grandeur and vishwa gurudom, children dying of starvation must come as a rude wake-up splash of cold water.
The big stories of collapse started trickling in, in late 2017, when luxury and old respected brands began to fold up, incapable of attracting the custom of those at the bottom of the economic pyramid. This was dismissed as usual, with pithy blurbs about the Indian character and the ways of earlier governments.
We are now standing on a precarious financial precipice, incapable of providing any succour to the poor, or an assurance of revival to the middle class.
With more than $30,000-millionaires having left India with their wealth, in the past three years and motor car companies having pulled back on manufacturing, with Rs 35,000 crores worth of unbought stock piled up in stores and parking yards, it cannot be long before we begin counting the wealth required to put together our next meal.
It is perhaps a lemming like mental state that makes us all want to see the worst face of an already frightening reality. If that be so, we will achieve our aim in the not too distant future. Specially if community and not economics, remains our focus.
In the humble opinion of this home economist, it is already time to exchange paper for metal, to at least get to the other side of a looming catastrophe. Those $30,000 millionnaires who left our shores, saw it coming a long time before us.
(Rajiv Tyagi is an erstwhile MiG-21 fighter pilot).
