Present growth model of the country has benefited just a small population and caused deprivation for a larger number. The only solution for a better economic model is to alleviate farm distress. Our policy-makers must act fast
India feels happy as macro data suggests an economic turnaround. However, incidents like the farmers’ protest in Maharashtra, the imposition of congestion tax or for that matter slipping to the 133rd position in happiness index are signals that the country needs to do more than what has been done.
The global situation itself is not very happy. India, with its large population, and being home to more poor than anywhere in the world, is not in an unenviable situation — it is exacerbating with increasing protectionism and US President Donald Trump’s plan to make America Great again.
Indeed, it is an uneasy world. Steering the country through such a myriad situation is not a comfortable job, more so with a restive population that wants the Government to function like a genie. A small slip can lead to an uncomfortable election result, as was seen in the recent lok Sabha by-elections in Uttar Pradesh and Bihar.
After years of difficulties — growth-less jobs, problems in the farm sector, higher taxes and tolls, among others — people have higher aspirations. Uttar Pradesh by-poll results came as a surprise soon after the Uttar Pradesh Government signed 1,045 MoUs, amounting to proposed investments worth Rs 4.28 lakh crore at the Investors Summit. It is a fact that Indian economics or politics cannot sustain on statistics. It needs much more than that. While in search of happiness, it is slipping. Disparity is increasing.
Despite the recent slowdown in the Indian market, the overall situation is a cause for concern. Economists have failed in suggesting effective ways to curb the continuous inflationary situation since 2010. Consumer price indices have risen by over 60 per cent. Pay hikes are not enough to curb discontent. People have been wondering why, despite crude prices stagnating around $60-64 per barrel, half of what was during the UPA regime, there is a daily revision of diesel, petrol prices.
Economists have created a fear psychosis among planners to rake in more revenue, forgetting that it hurts basic economics. The Government has now better understanding of the people. It needs to realise that all Government and semi-Government organisations, like municipal corporations, panchayats, oil companies, banks, water boards and other utility services are perceived as extortive, as they indulge in profiteering and greed. Every paisa they earn adds to inflation.
India has the most unstable price regime. While boasting of ease of doing business, it needs to keep the prices — not through artificial means — affordable. Wages must rise, as now banks are demanding, but economists have to devise a long-term solution. Prices must remain stable and Government organisations must be put on a leash.
Bureaucrats, who suggest congestion tax on its model, forget the level of affluence and the fact that the highest number of poor live in the Capital.
They are unaware that the Delhi metro is unaffordable for slum dwellers. Is there any logic to charge a toll of Rs 100 per entry for a taxi (used by people under compulsion) and higher rates for goods vehicleIJ Economists do not realise that toll charge is paid by poor consumers and increases price of every commodity.
While taxing all sales under GST, they forget that most Indian small businesses’ profit is limited to whatever tax they can save. The so-called ‘tax evasion’ is a compulsion in a country with a complex multi-tax regime.
Despite GST, States continue with excise and other levies that were supposed to have been subsumed. The GST Council has to look into it. Piecemeal solutions have led to political quagmire. The country forgets that in October 2012, thousands of poor farmers from Kerala to West Bengal to the North-East gathered in Gwalior to march to Delhi. A similar, smaller march had an insufficient impact in 2007.
There are many who may argue that such views are naive and that India’s development — and thus the eradication of poverty — depends on urbanisation, massive investment in infrastructure and the development of a manufacturing base capable of providing employment to a large number of people, especially the young. But six years later, in March 2018, 35,000 farmers marched from Nashik to Maharashtra secretariat in Mumbai after a 180 km-weeklong-trek with the same demands and protection of their livelihood.
Since the CPM-led All India Kisan Sabha (AIKS) was behind this move, it is being perceived that the left still possibly is not irrelevant in Indian politics despite their decimation in the lok Sabha. The reality is that most farmers, 70 per cent of them, debt-ridden, are not AIKS members but they hold the key to change the political direction. The farmers needed someone to organise and help vent their grievance.
If the Bharatiya Kisan Sangh had taken lead, they could have gone with them too.
The march, however, raised a fundamental question on the country’s economic model. There has been a clamour to change that model within the Congress in 2012. The echoes could be heard today in all other parties. Yes, India has to plan for happiness, not just growth.
The Narendra Modi Government has the opportunity to reshape the country’s economy on Gandhian principles or Deendayal Upadhyay’s integral humanism — ekatma manavavad.
The present growth model has benefited a small population and caused deprivation for a larger number. If Trump has to be defeated in his global trade war, it can be done by uplifting India’s poor farmers who have the capacity to be the pivot of the economy, a factor the liberalised-globalised world ignored.
let the country debate but act fast to reorient the economic model. The farm distress is a socio-politico-economic reality. It calls for a change in the price-tax regime and a real equitable society, where the food grower is given respect, better livelihood and not doles in the name of waivers.
(The writer is a senior journalist)