FM should focus on poverty, unemployment & inflation, and refrain from politicking
Fiinance Minister Nirmala Sitharaman is right in her assertion that India could have become the fifth biggest economy much earlier itself, but the philosophy of socialism with its reliance on centralised planning hurt the country. Speaking at an event on Thursday, she was also critical of the way liberalisation began in 1991 under the Congress government, calling it as ‘aadhe-adhure reforms’ (half-baked reforms). This, she said, was in accordance with the strictures imposed on the country by the International Monetary Fund. But no economic progress happened till the National Democratic Alliance government under Atal Bihari Vajpayee came to power in 1998, she said. But after him, Sitharaman said, a decade was lost when the Congress-led UPA ran the government. Evidently, this sad state of affairs ended with Narendra Modi assuming office in 2014 and initiating fundamental path-breaking reforms, including the direct benefit transfer scheme. While she is not wrong on many points, her assertions smack of political prejudice: this is the propaganda of the BJP rather than sound economic analysis. To begin with the beginning, the 1991 reforms were done under duress, but nobody—except Leftists loitering in Jurassic Park—can today call liberalisation bad. Further, taking the right call during an acute crisis—which the then prime minister PV Narasimha Rao and finance minister Manmohan Singh—should be lauded, not denounced. Portraying the periods as glorious when the BJP is in power and other periods as dark when its rivals were, convinces only BJP supporters.
The NDA governments, under Vajpayee and now under Modi, have taken some good decisions. For instance, these governments have performed much better than the UPA government in reining in the fiscal deficit (For this, some credit also goes to Sitharaman). The NDA regimes are also credited with undertaking privatization, beginning with Vajpayee and furthered by Modi. Ditto with infrastructure development. It was Vajpayee who began the ambitious highways project; this, along with other aspects of infrastructure, is being carried forward with considerable zeal. But all is not hunky-dory about the economy. The recently released Human Development Report 2021-22 showed that India’s rank fell from 130 in 2020 to 132 in 2021. As per the United Nations Development Programme (UNDP) report, India’s HDI value at 0.633 was lower than the world average of 0.732. The World Inequality Report 2022, released in December last year, said that India was among the most unequal countries in the world, with rising poverty and an affluent elite. The Centre for Monitoring Indian Economy has estimated the unemployment rate in August at 8.3 per cent, the highest in the past 12 months. Inflation is also not coming under control despite rate cuts. Sitharaman should focus on these trouble spots instead of indulging in politicking.