Active Stocks
Wed Sep 27 2023 15:59:55
  1. Tata Steel share price
  2. 128.15 -0.54%
  1. HDFC Bank share price
  2. 1,527.2 -0.68%
  1. Tata Motors share price
  2. 620.4 0.1%
  1. NTPC share price
  2. 239.35 -0.35%
  1. Infosys share price
  2. 1,467.55 0.51%
Business News/ Opinion / Online-views/  The summer of discontent

The summer of discontent

On the issue of policy paralysis, this government has not performed any better than the previous government

Photo: Hindustan TimesPremium
Photo: Hindustan Times

The blitzkrieg of media campaigns launched on the completion of two years of the National Democratic Alliance (NDA) government is strikingly similar to the NDA’s ‘India Shining’ campaign of 2004. The big difference is, of course, that ‘India Shining’ was an election campaign, while this one was a mid-term report card of the NDA government.

The ‘India Shining’ campaign was obviously a disaster not because it was not planned well but because it was ill-timed. Not only did a majority of the voters not agree with the claims of ‘India Shining’, what irritated them was that it happened immediately after the worst drought in that decade with rising farmer suicides.

The situation today is not very different—the economy is suffering from an agrarian crisis after back-to-back droughts, declining farm income due to a collapse of commodity prices and declining real wages of casual labour. This is also the time when employment creation has been among the lowest. Claims of success of new schemes and policies that the government has launched in the past two years are yet to be visible on the ground.

It is this disjuncture between what has been projected through this campaign and the reality on the ground that can make it counter-productive. While it is difficult to separate fact from fiction on many of the claims made by the government, it is certainly too early to claim a ‘nayi subah’ (new dawn) at the current juncture. But even on those where facts are clear, interpretations differ. This is certainly true for the big claim that India is the fastest growing economy.

Apart from serious doubts raised by most economic institutions including the finance ministry and the Reserve Bank of India, the fact remains that other indicators such as private investment, credit, demand, capacity utilization and export numbers do not support any such claim of economic revival.

But even on growth rates, the numbers are not much better than what was achieved in the past decade. Clearly, this claim is not as much a reflection of the superb performance of the Indian economy as it is of the deceleration of the Chinese economy, which was the fastest growing for the past three decades. Therefore, such international comparisons are of little relevance when most economic indicators are heading south.

This government inherited an economy which was in a mess and the economic governance was crippled by a sense of policy paralysis. The hope and aspirations of the millions who voted for this government was not just to restore the economy to a healthy state but also to provide a blueprint for further growth. The government was fortunate to have the cushion of declining petroleum prices, which allowed it to take care of the problem of fiscal deficit and the current account deficit. But where it failed was to take advantage of the opportunities it offered.

Unfortunately, on the issue of policy paralysis, this government has not performed any better than the previous government. The best example of this is the recent flip-flop on the provident fund issue with the government forced to reverse its decision thrice.

While there was certainly no economic logic for the steps taken by the government on the provident fund issue, its failure to communicate the logic of these decisions was obvious with the speed with which these decisions were overturned. Such flip-flops on the land acquisition bill and various taxation matters have not helped in building the credibility of this government. Surprisingly, even on issues such as the goods and services tax, the government has not been able to build consensus.

The real issue then is the lack of clarity on the economic agenda of governance. For a government that rode on the aspirations of the youth, employment creation should have been the primary agenda. The dissatisfaction on this count is now obvious with the government’s own members indulging in a blame game.

While dissatisfaction on the ground on this front is muted as of now, the failure of the government to deal with the agrarian crisis is becoming the biggest source of dissatisfaction. But once again, the failure of the government is the lack of clarity on what needs to be done.

This was obvious in the case of the Mahatma Gandhi National Rural Employment Guarantee Act, with the government realizing its worth only late in the day; even on implementation of essential social safety nets such as the National Food Security Act, it waited for the Supreme Court’s orders. The failure of timely disbursal of drought relief also meant that by the time government acted, the crisis had already worsened.

Basking in the glory of the NDA’s victory in Assam, this government has failed to read the message from the assembly elections last month. Two of the state governments that managed to beat incumbency in a historic manner are also the ones that were seen to respond to basic issues of governance much more firmly. Despite accusations of populism, both the ruling parties in Tamil Nadu and West Bengal managed to beat the opposition on the strength of their pro-poor policies.

While the All India Anna Dravida Munnetra Kazhagam government in Tamil Nadu has been known for its better governance on public distribution system, education and health, much of the success of the Trinamool Congress is due to the pro-poor schemes of the West Bengal government. This was not just various food schemes but also schemes for girl children and various other subsidies.

If there is one message that the government should learn after two years and the recent assembly elections, it is that governance is not about numbers and making tall claims in advertisements—it has to be seen on the ground to be believed.

While the NDA government may claim many things including the revival of the economy through its media campaigns, it should not ignore the discontent brewing in the rural hinterland. This is not just on account of joblessness and falling wages but also due to the failure of implementation of basic services in education, health and food.

Unfortunately, failure on these fronts is all too visible on the ground.

Himanshu is an associate professor at Jawaharlal Nehru University and visiting fellow at Centre de Sciences Humaines, New Delhi.

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 01 Jun 2016, 04:31 AM IST
Next Story
Recommended For You
Switch to the Mint app for fast and personalized news - Get App