Why is Narendra Modi and his A-team led by the Finance Minister, Arun Jaitley getting rattled by the persistent criticism of their handling of the Indian economy post-demonetisation and with the problems faced in implementing of the GST that they stoop to whatever comes their way in terms of talking good about India’s economic scene.
Like being listed at 100 on the World Bank’s ranking of countries for ease of doing business. A rank of 100 and you call it good and make such an amount of noise about it. There is a sense in being part of a Top 10 but Top 100 and that too merely scraping through. Are we not thus promoting mediocrity? This shows the mindset that we have in our political leadership that runs this government today. Not only does Narendra Modi make a big show of this at a press conference, timed for 7.30 pm, which would coincide with the World Bank making the report public in Washington.
If you heard him then you would be constrained to believe that he thinks he is talking to a bunch of dummies from the rural areas who will get impressed with the Modi brand of histrionics. In another sense, we are toeing the line set by foreign institutions and persisting with the colonial regime that is embedded in our minds.
Let us examine now who is releasing this report and its real relevance to India. The World Bank, with the entire world, is in a sorry mess for one reason or other and economic growth across all nations has some numbers to talk of and only when it comes to India it shows 5-6 per cent growth. This by developed nation standards is pretty good but pretty bad by our own standards, as we all know since it is jobless growth and is a sign of stagflation. China had been doing pretty badly recently but then things are picking up with their economy. Until then India is holding the stage at the World Bank and in a marketing perspective makes good sense for this ‘august’ institution to show that they are doing their job.
There is another issue here and that is – Why is Modi and his A-team accepting the Washington-based World Bank report? Just about a couple of weeks back the Washington-based International Food Policy Research Institute put India at 100th position in the World Hunger Index falling 45 places between 2014 to 2017. The reaction of our government was to go after the institution and the report with hammer and tongs attacking the credibility, methodology etc. until it literally tore this report to shreds. But now you are accepting another Washington-based institution’s report! Is this because it is the government’s opinion the report is talking good about.
Now let us look at World Bank’s report for Ease of Doing Business that places India at ‘100’. On indices where India has improved are those related to resolving insolvency, protecting shareholder’s interests, paying taxes and getting credit (?). The last is a question mark since banks are funds flush and though they are offering credit, no one is willing to take it. In any case all these parameters are applicable to existing businesses in the country which is like a quid pro quo, that is whether you like it or not, you have to live with the prevailing conditions that are related to the four parameters. The four other criteria in contrast where India has slipped relates to starting a business, getting electricity, registering property and trading across barriers. Thus, if you have to have the Ease of Doing Business, don’t you have to Start A Business in which India has slipped along with the other three criteria that are also linked to getting a business started like getting property registered, getting electricity etc. The report does not encourage anyone wanting to come in on the Make in India program to start a business in India. If so, then what was Modi and Jaitley gloating about in the report. Was it that they believed that their cheerleaders would start clapping on the basis of the summary results of the report and that nobody would read the fine print?
We have to realise that based on such reports no one makes an investment plan. The other thing that is completely not understandable in this matter was up until the Indo-US nuclear deal the US was not in the good books of the BJP. But post-2014 their US relationship has rapidly changed through these various stages. India seems to be permanently in the orbit of the US these days, dancing to their tunes.
But the point is why are we accepting a foreign report as God’s own truth. At times we do not accept foreign reports but when it suits the PM and his establishment, it is embraced with alacrity. The question is why should Modi & his team take the crutch of these reports to prop up their India economic story. Are they not able to assess the mess that they have created in the country themselves? In the evangelical zeal and misplaced exuberance of the present government to ostensibly eliminate black money and tax every economic activity in sight by the twin measures of demonetisation and GST they have made the Indian people forsake economic activity. This is the only explanation since though the GDP figures showed a moderate improvement in the last quarter, the PMI figures released recently show stagnation. Now will Modi & his team go after the PMI report because it is not playing ball! Instead of that what this government should do is improve the credibility of its own figures and prove that they are legit on a sustained basis.
Modi and his A-team should realise that no amount of flag waving and claims will help revive the economy. But now that the two irresponsibly stupid measures have been launched what we need is to put our heads together and repair the damage. Of paramount importance at this time is to generate jobs for youth since otherwise we will have more anarchy as we go ahead.
