Recapitalization for the ship has sailed

Lambodar Prasad Dash

Since Demonetisation, Modi government has undertaken series of reformative steps, which the government termed as “Structural change” in the Indian Economy, however, remain (until now) evasive on the wound it caused to the economy.

On 24^th October, Finance Minister Arun Jaitley’s announced to infuse 2.11lakh crore into Public Sector Banks (PSBs) through Recapitalization and 7lakh crore investments on Mega Infrastructure projects. During this announcement, he said this move is unprecedented.  The announcement is indicating two issues; First, Modi Government finally though not in words but in action agreed that there exist a serious financial crisis, which needs huge and urgent financial liquidity push amounting to around 10lakh crore and secondly, Government’s reservation on the disclosure of Issuance and type of bonds implies, it is still unconfident whether this move gives positive result.

By the by, our discussion is neither on how the recapitalization works nor to re-present the statements which were equivocally hyped by the government. Before elaborating my point, as a citizen of India I only can expect that Modi Government’s another “unprecedented” move might bring a positive consequence, unlike previous restructurings. The fiscal infusion into the PSBs and investment on infrastructure is recommended step for countering economic slowdown, but under certain circumstances and for a certain objective.

Before thrash out where Modi Government has done its estimation wrong or say more precisely, shifted its priorities for political image building, I would like to quote C. Rangarajan who worked shoulder to shoulder with Dr. Manmohan Singh as RBI chief, “structural reforms could not be introduced unless a degree of stabilization was achieved. On the other hand, stabilization by itself would not be adequate to prevent the recurrence of a similar crisis in the future. (Reforms 2020, Last 20 Years, Next 20 Years)

In the year 2014-15 when Narendra Modi took oath as Prime Minister of India, the economy was not vibrant like 2004-2010, nevertheless a mixed situation. Industrial growth was 4.8% (reviving since 2011-12), service sector growth was 1.8% lowest in the last decade (except 2012-13, 2013-14), and Agriculture growth was also lowest (4.6%) inflation and CPI was lowest in the last 5 years, export was high (323.4 billion USD), capital formation was moderate (36%). The gross fiscal deficit was 4.09% and revenue deficit was 2.89% of the total Gross Domestic Product (GDP). Public consumption was high (7% of the GDP) than the private consumption (4.5% of GDP), mean manufacturing sector had depended more on government. One deciding factor was, people had lots of liquid cash on hand to invest, but lion's share was invested on Real Estate and Bullions.

It would be a mature step for the Modi Government to choose and address technically some of the key issues from a number of concerns like unemployment, fiscal deficit, trade deficit, reviving sick PSBs, boost to manufacturing and agriculture sector. Instead of doing this government undertook several measures simultaneously. Modi government had preferred the revival of sick PSBs and sticking to fiscal consolidation. In the process, it had called for minimum government, maximum governance. To compensate the spending on manufacture and infrastructure it supportively allowed FDI through “Make in India” scheme. But till 2016 end, government for some mysterious reason failed to take a time-bound appropriate step to resolve the issues. Subsequently, this worsened the situation of the ailing sectors. The exasperated Modi Government had chosen a shortcut way i.e. “Demonetisation”. The aftermath situation can be rightly described by a quote of Gary Busey, “If you take shortcuts, you get cut short.”

In the year 2014-15, the total notes in circulation were 14483.12INR Billion and the notes held in banks was 621.31INR Billion and the Statutory Liquidity Ratio (SLR) was 22.50%. Just before the Demonetisation the total money in circulation “unprecedentedly” increased to 16634.63 INR Billion and notes held in banking department was 662.09INR Billion as per the Statutory Liquidity Ratio adjusted to 20.75%. Repo Rate (6.25%) and reverse Repo (5.75%) Rate was also an all-time low. It seems that Government itself allowed people to take more credit from the Banks. In such situation, It seems highly suspicious that why Modi Government all of sudden increased the Notes in Circulation and overnight demonetised them. By the by demonetisation only did one thing it increased the currency availability in the banks considerably.

On 26^th October 2017, Arundhati Bhattacharya, the former head of State Bank of India (SBI) India’s largest PSB said in a media event that If they prepare extra for anything, then its fruit or result was better. Obviously, if there was more preparation (for demonetisation), then definitely it would have been less strenuous on us.

When the whole Economy was yet to heal from the onslaught of demonetisation, Modi government has pushed another ambitious reformation, Goods and Service Tax (GST) with a mid-night celebration in Parliament house. GST, which Narendra Modi, PM of India termed as Good and Simple Tax made such a mess that GST council made more than 7 amendments including tax structures within four months since its implementation on 1^st July 2017. The government, as usual practice, hide the weaknesses but puffed that the first quarter since the roll out the Indirect tax collection rose than the previous years. However, in reality, it deliberately concealed the amount to be returned as input credit. An Independent estimation revealed that there are more than 20million job loss and more than 20 thousand small and medium industries closed down after the twin blow of demonetisation and GST.

Let’s have a look at the data provided by the RBI in his Handbook-2017, in 2016-17 financial years, Gross bank credit outstanding with Agriculture and allied sector is 9923.87INR Billion, MSME (26800INR Billion), Retail trade (2346.87INR Billion). Many sectors (except manufacturing 2014-15 3800INR Billion, 2015-16 3714 INR Billion and 3697 INR Billion) has taken new credit to start or boost their business before the GST rollout. Similarly, except Chemicals and Chemical products, Basic Metal and metal products, Rubber, Plastic & their products, and Leather and leather products, credit inflow to all other industry sectors have been decreasing since 2013-14. A government should be more cautious while bringing out any painstaking financial reforms when only a few sectors are optimistic in their business. Instead of widening the positive outlook it allowed to do more economic as well as policy blunders. For example, the BJP and its rightwing Hindutva ideologues went after Cow protection, which almost devastated the Leather and leather-based industry, which had been on the considerable growth track.

When most of the industries not optimistic and don’t find useful to turn the face towards Banks for their business, Modi government infused a lump sum amount in the PSBs. As SBI’s new chairman Rajnish Kumar in an interview pointed out that after the recapitalisation Bank might give more priority to manufacturing industries like steel and cement and less interest rate for certain baskets. This presumption came forward because of government, on the other hand, investing around 7 lakh crore in the mega infrastructure Projects like Bharatmala in the next 5 years. It mean both government and Banks shifted their priorities to certain areas of interests. This will be another blunder, as the Investment on infrastructure gives fiscal gain at a distant future also increase the fiscal deficit, as per the report India’s fiscal deficit during April-August touched 96.1% of the budget estimate for the full fiscal year that ends on March 2018. The deficit was 76.4% of the full year target during the same period a year ago.   

Since the Recapitalisation initiative for Modi government is not new as I have pointed out earlier in this article. In 2014-15, it launched one of the ambitious Indradhanush scheme to rescue the PSBs which are burdened by the Bad loans and NPAs. It planned to infuse 70,000crore over the four years. Consequently, the Recapitalization scheme of Modi government is not at all unprecedented, but the amount which Finance Ministry put forth. Recapitalization scheme is not new and also at hand fiscal activity to bail out the banking sector, but it is very crucial how to bailout without further burden on the state exchequer.

While giving clarification to this Finance Minister Jaitley said, the Rs 2.11 lakh crore capital infusions into the banking sector will come over the next two years. It will come in three parts. The government itself will directly pay banks Rs 18,000 crore by buying their shares. It will also encourage banks to raise Rs 58,000 crore from the market. But the bulk of the amount – Rs 1.35 lakh crore – is expected to come from recapitalisation bonds.

According to Reserve Bank of India estimates, the total excess deposits accrued to the banking system due to demonetisation was in the range of Rs 2.8 lakh crores to Rs 4.3 lakh crore. It is these excess deposits that the banks are expected to use to buy the recapitalisation bonds.

Many economists and financial advisors had exhorted Modi Government to increase liquidity ratio to make economy float safely in the crisis. Conversely, Modi government allowed a moderate 10k crore capital infusion for the PSBs in the 2017 budget and push for consolidation of the banking sector. But all of the sudden walling the process of consolidation of PSBs, not bringing out an evolutionary mechanism for debt recovery in a haste government is going to infuse huge money in the banks, even though it is not sufficient. According to the Fitch ratings on September 2017, by 31 March 2019, Indian PSBs need 65USD billion (around 4lakh 23 thousand crores) to meet Basel III capital standards.

In 18^th November 2016 when asked in Loka Sabha to provide details of the Loan defaulters and give data state-wise  The Union government in his answer remained evasive to provide the names and state-wise data. According to the information given by Ministry of finance, in 2013-14 the wilful defaulters were 6336 with an amount of 45,731INR Crore which grew considerably in 2015-16 to 8,167 with an amount of 76,685INR Crore. The recovery and conviction rate were also not satisfactory.

According to the information given by Care Ratings on the Non-Performing Assets (NPAs) of PSBs, within 1 and quarter years the NPA ratio has grown from 7.69% to 10.21% in June 2017. Data shows soon after the GST roll out the NPAs increased manifold. There is an understandable reason behind it, as government delayed the repayment of input credit, Business needs more credit to run its business forward. Although RBI, not changed its interest rate, it is not easy to lend money to all the sectors.

Secondly, the difficulty of distribution of the recapitalisation fund to the banks. Since, till June 2017, the 11 PSBs account for a share of 67% of the total NPAs 829,338INR Crore. SBI, PNB, BOI, IDBI, BoB account for a share of 47.4% totalling to 3,93,154 INR crore.  If the government will focus on NPAs of PSBs only the state-owned banks and other cooperative banks will suffer collaterally as most state governments are not in a condition to bail out their own banks.  

I’m going to conclude by quoting Johan O’ Donohue, “Our trust in the future has lost its innocence. We know now that anything can happen from one minute to the next. Politics, Religion, economics, and the institutions of family and community all have become abruptly unsure.” 

FDI In India: Mouth filling but a Vaulting Horse

Lambodar Prasad Dash

For the first time on August 17 this year, Astro-Physicists, Scientist for the first time detected the collision of two neutron stars, which happened at a distance of 130million light years from the earth. They also found that the collision also produced gravitational waves, light with an abundance of precious metal like Gold, platinum. The most astounding galactic activity divulged on 16^th October, after much research and analysis. Where the precious metals went? Have we received the dust of those precious metals? If received, how much? These questions may seem to be much weird and irrelevant to our discussion

Let’s assume that the collision of those neutron stars is like allowing Foreign Direct Investment (FDI) and its impact on a prevailing economy. Which has some immediate effect and some might be detected in the remote past. After the acceptance of Globalisation and subsequent Economic Liberalisation, Every developing country believed that FDI is like “a cosmic scale atom Smasher of energies for beyond humans ever will be capable to build”( what scientist described the Neutron stars collision) which can bring loads of fortunes to their economy. Yes, of course, since its implementation the FDIs proving as boosters to the economy of the developing and third world countries. All are much pleased with its short-term gains, but like the neutron stars collision many of the issues yet to be experienced. Some of them experienced but remain without explanation. 

Now, come precisely to our topic. I have studied many researched articles and papers on FDI, 80% of them equivocal on certain pros and cons. For the last two decades, since the implementation of FDI in India, the protests and criticisms on FDI remain almost limited to the Political debates. There are research works, but most of them lack inductive reasoning or authentic micro-level case studies on the FDI and its impact on the economy.

Indian Government in 1966 and 1985 tried to allow FDI but it failed.  In the late 1990s, during PV Narshima Rao(PMO)-Dr. Manmohan Singh(FM) severely debt-ridden India allowed FDI under the structural economic reform process. In 2006, under Dr Manmohan Singh(PMO) and P. Chidambaram(FM) further liberalised the FDI inflow through an automatic process, which doesn't need Government Permission but a compliance to Reserve Bank of India (RBI).  In 2013, India government made almost all the sectors open to the FDIs. In the Last two years, Under the Modi Government, it gets much enhancement with high voltage publicity on the name of “Make in India”. The Economic doldrums which arise after the Demonetisation and GST, Modi Government jumped quickly with a data sheet to prove that these reformations increased the FDI inflows. But In 2015, the India overtook China and US as the top destination for FDI.

The Organisation for Economic Cooperation and Development (OECD) defines FDI as to take control of owning 10% or more of the business. Businesses that make foreign direct investment are often called as Multi-National Corporations (MNCs) or Multinational Enterprises (MNEs). An MNE may make a direct investment by creating a new foreign enterprise, which called Greenfield investment or by the acquisition of a foreign firm, either called an acquisition of or Brownfield investment.

Since its implementation, Indian Government insisting on the Technological Transformation/up-gradation, Employment Generation, easing Demand-Supply chain, Revenue Generation besides there is a belief that FDI can be a tremendous source of External Capital which can lead economic development.

Now come to the statistical figures, Research works like Sirari and Bohra (2011) on FDI & growth of service sector in India pointed out the growth of service sector to GDP is directly proportional to FDI. I’m here to point out some casual relationship between gloomy economic issues directly linked to FDI. For it, I’m taking three sectors Innovation, Agriculture, and Micro and small Industries especially cottage industries in India.

Mr. Mukharjee In his research paper quoting  Coughlin, Terza and Aromdee (1989, United States) said that the number of potential sites, state per capita income, manufacturing density within a state, better transportation infrastructure, higher unemployment rates and higher expenditures to attract FDI were positively linked to FDI flows. On the other hand, higher wages and higher tax rates had a negative impact on FDI flows.

However, In the Chinese context, based on panel data covering 98 hinterland cities of China for the years 1999 to 2005, Luo et al (2008) found that well-established factors such as natural resources and low labour costs were not important in determining FDI flows to China’s hinterland. Instead, policy incentives and industrial agglomerates were the most important determining factors for FDI flows.

There is no fixed rule which can attract FDI. It depends upon the variety of economic and Political situation of the invested countries. However, two things are noticeable from the above observations, firstly, the Investors have more decisive role than the government of the invested countries, and secondly, the major attraction for the FDI is low input cost both of Material and Human resources for production and Market. It can be explicitly concluded that the Invested country is always at the receiving end.

When we come to our own country, the FDI inflows to it dominated by the Automatic Route and followed by the Reinvested Earnings and acquisition of shares. FDI through Government approval route is gradually declining year on year basis (RBI, Atri Mukherjee).

Fig-1

In the initial years, the FDI was dominated by the retail sector, but later it is shifted to the Service sector. In 2014-15 the FDI inflows to service sector were INR27,369 Cr, in 2015-16 it increased to INR 45,415 Cr and during 2016-17 (March 31) it is INR58, 214 Cr. Between 2000 and 2017 total FDI inflows is INR316,568 Cr, which is highest among any other investment. This is followed by Computer Software & Hardware, Construction Development and Built-up Infrastructure, telecommunication, Automobile Industry and Drugs & Pharmaceuticals. 

But the India’s International Trade (Export and Import) largely dominated by Mineral fuels, Mineral oils (35% of the total imported Goods and 20% of Exported goods) followed by pearls, precious and semi-precious stones (11% & 12% ) and the top destination for export is USA and UAE, which is around 27% of the total exports. While the top two Importers to India are China and UAE, both contributed 22% of the total imports. It shows that in India, the sectors which attract highest FDI are not helping much in the international trade rather targeting domestic market. Now I place an example how the government is totally zilch on the Innovation and technological up-gradation of Indigenous products. The Lather and Lather products accounted almost 21% of the total exports but the FDI inflow to it is negligible i.e. .02%.

As said by the FDI fact sheet (till 2017, March 31), Government of India, since 2000 the Maharashtra (with some varies) was the topmost destination of FDI inflows with 31% of total inflows to India, followed by Punjab/Haryana (New Delhi 20%) , Tamil Nadu(7%), Karnataka(7%), Gujarat(5%) and Andhra Pradesh(4%). It is conspicuous that the economically advanced states receive Lion’s Share of FDI inflows.

Nunnenkamp and Stracke (2007) found a significant positive correlation of FDI with per capita income, population density, per capita bank deposits, telephone density, level of education and per capita net value added in manufacturing in India.

Fig-2

When we are talking about the employment and income growth, the Per capita FDI inflows has no direct link or an overlapping link to the per capita NSDP or Annual wages per worker. Andaman & Nicobar Island has 0% per capita FDI inflow during 2010-11 but the Per capita NSDP 76,883INR and annual wages per worker is 65,831INR, but during the same period Andhra Pradesh received 679INR per capita FDI inflow but the per capita NSDP is much below than A&N i.e. 62, 912INR and annual wages per worker is 61,007INR. Similarly, Goa Received highest per capita FDI inflows and its per capita NSDP is 1, 68,572 INR and annual wages per worker is 1, 26,788 INR. Although Jharkhand got 0% per capita FDI inflow and its annual wages per worker is much higher than that of Goa i.e. 1, 49,847 INR.

Fig-3

Now come to the Agriculture and Allied sector. The FDI inflows to it are below .58%. The total foreign investment is on fertilizers are .17%, Agriculture machinery (.11%), Food processing industries 2.27% (but most of the food processing industries dominated by meat and seafood). There are a thousand varieties of indigenous seeds and farm animals breeds but very few got patented. Now the foreign investment on Genetic Modified seeds is being encouraged by the Government. Some research works on Madhya Pradesh accused the forceful implementation of GM farming to the growing Farmers' suicide incident (Fig-2). At some point, the most developed States, which also attracts a major portion of FDI is unavoidably linked with Farmer deaths. (Fig-3)

Fig-4

The incoherent government policy on the Agriculture already weakened the Farmer's economy. Now to make FDI more attractive to Foreign Investor's government putting unreasonable pressure on the land to create a conducive environment. 

The investment procedures and double taxation avoidance treaties are the major cause of tax heavens. But the government has paid little interest to eradicate the menace. Even Last year, at several occasions Modi Government reiterated to bring reformations in the Mauritius Route (Fig-4) in FDI but no authentic steps have been taken so far. Rather the FDI has found a new route i.e. Singapore to avoid taxation in India. In the next article, we will discuss on the dark side of this international investment routes. 

Indian Perestroika: From this point to future

Lambodar Prasad Dash

After 70 years, India going through a new phase. Government under Narendra Modi has tried to bring a structural change of the entire economic, social and governmental setup mostly influenced by the right-wing ideologies. Since 2014, India has also experienced many reformations some of which are government induced and some independently through legal and international aspects. Can all these reformations bring a better future? There is no simple answer to it, but a section is Hopeful and another section is skeptical to it.

After 3 years, we are in the middle of the evolution of Economical, Social, legal and political policies. However, the situation is such that we neither rewind the process nor has same enthusiasm to embrace all of them. Now be specific to the question, can this Perestroika of Indian Economy move forward with the same spirit? International Monetary Fund (IMF) in its recent world economic outlook and the World Bank both are positive but with an asterisk mark, which clearly stated: “if government thrust for the change remains unchanged”. Will the Government resolution remain same? It is a big question and also a game changer. Many International and national financial and governmental policy watchers including IMF and WB positive towards Modi Government for a single most powerful reason that it has a strength of democratic numbers, unlike previous government. In the contrary the forecast based on the mechanical analysis of statistical data only which has complete blind towards several relative issues like, the commitment of government machinery, implementation strategy,  and people’s emotional response to the pros and cons of the policies.

Policies are the binding force between centre and state, more precisely it determined the quality of the relationship between Government and its people, which in turn establish a collective effort for the nation’s development. Besides this, most of the economic policies are designed to solve particular problems at a particular time. Not all policies are a panacea to the plethora of problems for all the times. So, for the sustainability of the economic development, we have only two options, allow the policies for continuous evolution or formulate it with a collective approach. But, the fundamental predicament of the policies which brought disasters and severe criticism is Modi government’s plan to build watertight and congruent policy order with an aim for universal application throughout time (!) in a simple sentence, Modi Government unlikely to accept India as a unity of diversified interests and economic life.  

Of Late, the intellect of the Modi Government accepted the truth. On 11^th of this month, in the 1^st meeting of Economic Advisory Council (EAC) to Prime Minister emphasised the government to stay firm on the reformation but recommended to evaluate the policies and ready to take suggestions from beyond the rightwing contours. However, when the government has a congenital right-wing instinct and within a few months going to face series of assembly elections and general election, will this suggestion be implemented with its true spirit? The voters of 2019 will not be like 2014’s, the Image of the BJP is diminishing, Voters trust much strained due to promiscuous promises. In such condition, these democratic exercises have largely determined the future of the policies and the ability of the government.

Even if we presumed that the Modi Government will pass through unscathed in the next 2 years, the IMF figures are not so high-flying for India in comparison to the other nations with a similar economic scenario.

India's forecast in IMF's World Economic Outlook, 2017

In 2009, the year when the whole world was under the grip of severe economic recession, India’s total investment was 36.480 percentage of the GDP. In the current year, it further declined to 29.936 and as per the IMF forecast in 2022 it will be 30.936. It will be wrong to give a reason that with an increase of the government investment in infrastructure and productivity of the human resources the forecast will be altered. Without proper utilisation of the human resources and private investment, the government spending will be more than the revenue and subsequent decrease in savings.

This situation further pointed out by IMF, in 2009, the Gross National Savings (GNS) was 33.665 percentage of GDP. In 2017, it is 28.558 and in 2022 it will be 27.939 (% GDP). This implies government is spending is more its income than it produces.

The government revenue in the current year is 21.130 percentage of GDP while it was 18.518 in 2009. In 2022 it will be 21.326. Mean, the subsequent years the revenue generation is not increasing but will remain static. In contrary to the static revenue generation, the government expenditure is decreasing around 10% year-on-year basis. In 2009, the expenditure was 28,052, in 2017 it is 27,488 and in 2022 it will be 26,683. But recently, more WB supported SANKALP and STRIVE scheme and increase of salaries by implementing 7^th pay commission recommendations, the government showed its keenness for the more government spending to counter GDP growth. This is also somehow against to the suggestions of the IMF and detrimental to the future sustainable and inclusive growth of India.

Further, the declining government savings implies two issues, one, in future manufacturing industry will be more dependent on the government purchases and second, and people will spend more on consumption. If we take the 2^nd issue, it implies the growing CPI inflation in coming years.

Although IMF is hopeful for the Increase of GDP, it will reach 300,223,330 Billion INR (at current price) than the current 167,184,181 billion INR. Meanwhile, the data also indicates that the GDP deflator index also increasing. In 2009, it was 87.183 and current year it is 128.518 and in 2022 it is forecasted to 158.002. This implies two major things, the loopholes of the government planning to subdue the declining GDP and increasing the cost of living. Increasing cost of living is a clear sign of an increase of Poor-Rich gap and expansion of population under chronic poverty.

While, Modi government tries to blend its Right-wing economic model to the neoliberalism, but to tackle the economic problem it follows the Keynes model. If the government went further without any amendment to the present economic model, in near future government will be more blamed. If in order to gain mass popularity, the government would reduce or avoid taxation (Land, Gold, Oil not under the GST purview) and then meet the revenue shortfall by the creation of more artificial money, eventually it will lead more corruption like previous government coupled with a maladroit economic situation.

Modi Government in Reality-Shock

Lambodar Prasad Dash

How much Modi Government trying to stifle the growing piques on the Jay shah's alleged financial gain issue, it is another incident which further exposed the Modi Government to the Reality-Shock Syndrome. Recently, the RBI’s Quarterly Policy Report and Earlier to this the Centre’s financial report on GDP and Economic Survey already made the Government incarcerated to the situation.

Prime Minister Narendra DB Modi and BJP National President Amit Shah (File Photo)

Jay AmitBhai Shah, the only son of most powerful Bharatiya Janata Party (BJP) national president Amit Shah. The Wire, an online media house uncovered the alleged financial misappropriation which gives Jay a whopping 16,000 times monetary gain within 2 years. The amount of truth behind the accusation is yet to be proved (if Modi Government or a judicial proceeding wants). It has put an incorrigible question mark on the submission of the Modi Government and its precision on corruption. Although the issue is not related to any members of the treasury bench for which the government to take the blame, yet it is the subject directly impinge on the party’s very sensitive part, its image.

Before going to the details, it is relevant to quote Tom peters and Nancy Austin from their book “A passion for excellence: The leadership difference”. 

• People have ego and developmental needs ...and they will commit themselves only to the extent that they can see ways of satisfying these needs.
• People cannot be truly motivated by anyone else...That door is locked from inside.
• When people are in an atmosphere of Trust, they will put themselves at risk, only through risk is there growth....reward...self-confidence...leadership.

Now, come straight to the 3rd point, since 2014 Election Campaign Narendra DB Modi time again has reiterated that the “corruption” is the biggest enemy of the country and it is the only hurdle to India’s development. He promised that his mission as Prime Minister is not to enjoy power but to uproot it. He also cautioned that the fight against corruption is not so easy and called the people’s support to be ready to bear the difficulties patiently during these fighting.  People unquestionably believed his Magniloquence. Extended support not only during demonetisation but also in his every disastrous reformation.

Contrary to the situation, during the same time, in recession stuck Brazil People came out to the streets and forced the government to rollback demonetisation. In Brazil, there was widespread resentment, spontaneous Protest sparked overnight. In many Western Countries, it is evident that if the government failed in any economic administration, the people’s remonstration is intense. But, in India the situation is different. People are more forbearing and indulgent towards such situations.

Now, come to the 2nd point, It seems that soon after 4 months of the implementation of demonetisation people de-motivated slowly but surely. As most of the economic reforms could not substantiate the Modi Government’s claim on corruption, Black-Money, Terrorism, Parallel economy, digital transaction, except the government forced surroundings. Rather the economic reforms posed as a stumbling block to the big ticket schemes like “Startup India”, “Make in India”, “Smart City Mission”, and “Skill Development”. Besides this, Modi-Government unable to boost the Export of indigenous products except for software

The Spice of India, most demanding products faced severe hardship during all these years. In the year, 2016-17 (Apr-June) the export reduced to 621.78US$ from 2432.85US $ (2014-15). Agriculture and Processed Food Products Export Development Authority (APEDA) Export performance abridged. In the year 2015-16, total export of Agri and Allied products was 43,369.62INR Cr which is reduced to 6,398INR Cr in 2016-17. PEC, a Government company, primarily engaged in export of projects, engineering equipment and manufactured goods, defense equipment & stores and import of industrial raw materials, bullion and agro commodities also faced financial constraints. Sales turnover reduced from 9780INR Cr (2013-14) to 3746 INR Cr (2016-17). Similarly, the sectors which declined are Processed meat (-77%), Leather and leather manufactures (-6.08%), Chemical and Related Products (-73%). Plastic & Rubber Articles (-2.68%), Base metals (like Iron, Aluminium, Copper) (-6.25%), except machine and Telecom instruments the export of other electronic items reduced. In the IT sector, Software service export growth dropped off (5.6% in 2012-13 to -.7% in 2016-17), IT-BPM export growth reduced from 11.1% (2012) to 7.8% (2017).  All these sectors accounted 40% of the total exported goods and services.

Last but foremost, In the above mentioned psychological traits of people in relation to an organization or a nation, the first assertion is on the people’s ego and development needs, which now are dwindling. As now, when people see that the Modi Government is noiseless on the perpetrators of corruption, Black Money rather their own men has been accused of the series of corruption charges. Employment is not generated as per the Election Manifesto but to a certain extent adding numbers to the unemployment.

It seems that the chest thumping on development and projecting himself “Vikash Purush” (Messiah of development) won’t produce development. The statistical figures of the government itself negate the claim of the Modi Government.  It shows that either Government is suffering from Hemispatial neglect Syndrome (a person who could not see or recognise the other half of the things) or it is a deliberated attempt of manipulation of facts, doctored data and managed publicity to hide its weakness.

For example, the Modi government’s one of the most hyped programs is the rural electrification scheme. The government maintained that even after 70years of Independence many villages having without electricity and they are doing a tremendous job to make all of them electrified. But in reality, before 2014, except Jharkhanda, Bihar, Odisha, UP, WB and Assam all the states achieved electrification between 90-98%.

In the Human development index (HDI) India already gained 4 positions before 4 and within last 3 years the condition not improved well even after the increase of budgetary allocation on social welfare schemes. According to the economic survey report (2016-17) part-2, Indonesia, Brazil, Sri Lanka and Malaysia are far better-performed nations than India. 

T S Venketaraman (Management Crises and Strategies for Growth, The Hindu Speaks on Management) rightly quotes, "... the financial difficulty is a result of several managerial mistakes made months or sometimes years ago. If a manager has misused funds once, he will do the same next time if he is given more money." 

How much optimistic is Modinomics?

Lambodar Prasad Dash

On 5^th October, almost one year after the implementation of Demonetisation, addressing the company secretaries Narendra DB Modi, The Prime Minister of India said, some get a sound sleep at night only after proliferate Pessimistic notion about the Government and on the Economy. According to the Human behavioral psychology, it is a sign of self-soothing expression, but his remark to the critics really mean?

Before digging into the Prime Minister Narendra DB Modi’s Economic policy and how optimistically it is taking the Country’s Economy growth forward, it is amusingly relevant to point out the possible inspiration which shaped his understanding.

Rashtriya Swayamsevak Samgha (RSS) which is the topmost advisory council to the present day BJP government on Statecraft and External affairs mostly influenced by Kautilya @Chanakya. There is no wrong to get inspiration from the great man, who laid the foundation stone of the Democratic Monarchical system and developed a pan Indian Spirit. But it is something abnormal with the brain that thinks which were relevant some 1500yrs ago can be implemented nowadays with exact significance.

Mr. Modi’s sudden announcement of Demonetisation, surprising announcement of various schemes, his Religio-Political gimmicks all are understandable from a chapter of Artha Shastra; the sloka (5.2.39-45) narrates how to exploit the gullibility of the people.(Kautilya- The Artha Shastra, L N Rangarajan, penguin)These include:

-Building overnight, as if it happened by a miracle, a temple or a sanctuary and promote the holding of fairs and festivals in honour of the miraculous deity;

- Exploiting an unnatural happening, such as an unseasonal flower or fruit, by making it into a divine phenomenon;

- Using secret agents to frighten people into making offerings to drive away an evil spirit;

- Playing tricks on people by showing a cobra apparently with many heads, or a stone cobra coming alive;

- selling remedies against evil occult manifestations.

If people are not taken in so easily, they should be frightened into doing so.

The next chapter also elaborates (5.2. 46-51) other methods of cheating to collect revenue. 

The Artha Shastra is not purely like modern day Economics. It is a treatise on statecraft and affairs of government and governed. Narendra Modi led government at the centre lacks this basic understanding about the economics. Why and How?

Firstly, the entire economic edifice and the administrative setup both good and bad are inherited from the previous government. But the Modi government has been evasive on this theory. Except for one or two instances, for some unavoidable circumstances, Modi government accepted the truth.

Secondly, which is, of course, the most perilous part that they always apprehensive to prove their stand right.

There may be a strong reason behind such approach; Firstly, BJP came to power by tarnishing every activity, schemes of the Congress-led UPA government, even though most of them were quite good and noble.  So it will backfire if they recognise it publicly. Secondly, if they recognise the legacy of the previous government, there leaves little room for them to prove they are doing the best.

This is the fundamental mistake of the Modi government which makes them further secretive in making economic and administrative affairs.

Since my focus is on the economic situation, with an apology I am taking out the administrative and Political issues and reserve it for another article.

Economics is Primary cogwheel of a person’s life. Throughout one’s life, economics will play a major role in determining what one do and how happy he is doing it. Not only individual’s life Economics equally vital for a country. It influences the affairs of the government and determines the wellbeing of the nation as a whole.

The “Laissez-faire” philosophy which since the beginning of the 19^th century has been the driving force to determine the course of democracy and the role of the government is now becoming more complex. The advancement of new technologies basically Digitisation there is a growing demand for the de-materialization, de-monetisation, and democratisation of information, currency, and resources. The contours of Economics are also expanding and overlapping other areas. As the Income is largely depending on how effectively the nation or the individual participating in the economic process. Every step towards a more intricate economy brings new problems and economic interrelationships.

However, it seems that Modi government has learned the importance of the above facts. Hence with more enthusiasm, it is trying to implement the digital transactions. It demonetised, Simplified the Tax regime, wants to store the electronic database of every individual’s. But the Truth is, all these noble economic steps inherited from the previous government. Since Modi Government inherited the idea only not the understanding, it is facing a setback in every implementation.

In my previous article, “countering the economic crisis, Modi govt is on the horns of dilemma” I have analysed how India had made the standstill economy vibrant and successfully countered the 2008- 2010 global financial crisis and put the country’s GDP all-time high at +9%. Modi Government inherited a hale and hearty economy with some revolutionary schemes to implement further. The concept of the healthy economic scenario is neither a big leap nor total shifting of the track, but a sustainable and equitable development.

Between 2004 and 2012 most states did well in poverty alleviation. The Reduction of the poverty was 10 to 15 percent. Although the poverty in some states like Nagaland, Mizoram, Arunachal Pradesh, Gujarat increased but the well known poor states like Bihar, MP, UP, Odisha, Rajasthan improved their “poverty reduction rank.” Other government data indicates that the increase in the urban poverty and large-scale migration to urban areas.

An economic life of a rural person is quite different from an urbanite. Even though they earn less than their urban counterparts they are somehow protected from the immediate impact of the unstable economic situation. Since, they highly relied on the simple life, dependence on home/local produced foods/goods, their monotonous diet, etc. Most of the Village folks live out his years never going more than 25miles (a rough estimation) from his home village.

Most of the Demonetisation sufferers are the urban poor and lower income groups, who left the village and earned their livelihood from the unorganised sector. There is no authentic data to show how much the unorganised sector affected by the demonetisation disaster. What the figures government are disseminating, likely to hoodwink the faults.

Many ministers including Finance minister, High rank officers narrated it was to give bolt to “Parallel Economy” run by “Black Money.” But there is no applied term in economics to describe Black Money; it is unaccounted money or untaxed money laundered in Tax heavens. The Parallel economy in its general usage refers to Black market. But in economics it has no negative sense, but a definition to bring more effective monitoring techniques. Economists like Feige defined it as, “hidden economy as including those economic activities which go unreported or are unmeasured by the prevailing techniques for monitoring economic activities.”

However, it is sure that the role of Hard currency for most of the activities in Black Market is highly implausible. On the other side there is an innocent world, where a Parallel economy has prevailed since time immemorial. It is the rural area which suffered most (though the impact varies from state to state depending upon the economic activities). How scanty the earning, it is hard earned from the unorganised sector. It never deposited in Banks, maneuvered by the unregistered local money lenders.

My firsthand experience says the demonetisation triggered the reverse migration. Many returned to the village. Ironically, before demonetisation, Modi Government contracted the budget allocation for many social welfare schemes. Due to contraction of the revenue allocation State governments were reluctant to spend on Infrastructure. The mining sector was under regression. The Market was highly susceptible because of the possible implementation of new tax order. Agriculture was under stress. Those who returned to villages found no employment immediately. For them, two optioned opened either they borrow money or sell and mortgage what they have. Modi Government totally closed its eye to all these factors.

Good Economy produces two things one is “Constant” another is “Equilibrium”. In Constant, like a cogwheel, it pulsates other things to run. Secondly, when a new economic composition brought forth it must give rise to a state of equilibrium. If the new economic order brings any capricious result it never termed as good economy.

In contrary, Modi Government arguably unwavering by debating that it is quite common to protest any novel Idea. However, this is rhetoric filled with a fallacy of Logic and reason.

Without rectification, the economic order, either in deliberation to implement its political agenda or to satiate its inferiority complex Modi Government has unabated in committing series of economic mistakes. It is a general sense of understanding that when the economic condition is highly volatile, one should not go for external aggression or become a perpetrator to the warlike situation. But Modi Government increased Defense budget, Undergone two warlike situations – Pathankot and Doklam Standoff, did surgical strikes. Conversely, in a fully employed economy, we must choose between guns and butter, If we use a big chunk of our productive resource for national defense our standard of living in civilian good is going to be correspondingly lower.

It is quite amazing that in one hand Modi government is talking to take India to a new height and showing dreams to make it Master of the World (Viswa Guru), on the other hand, it is tightening the noose around a healthy economy.

Before concluding my analysis, it is relevant to point out a major issue which may bring disaster to the Indian economy in the near future. As a close watcher of the world especially Indian Economy, I felt that the consumer behaviour of the Indians highly manipulated not by the market but by the Ruling Party (!). The demand for the variant goods now squeezed (may be due to various economic reasons) but there is a selective dissemination of demands, orientation for what to choose and what not to be chosen, imposed preference for a particular variety of goods. When we are competing with the world especially a neighboring country (China) which is very strong in the retail chain, such practice may bring the catastrophic result to many MSME sector and Innovations. It is imperative from the fact world market is skeptical to the “Make in India” products; Even The country’s own defense sector is not willing to absorb it.

Last though not the least, Now Modi Government planning for another blunder. It proposed to hold simultaneous elections. The argument for it is to reduce the burden of expenditure. But Modi Government should not forget that the Economy is a perennial process. The reformation only can be fruitful when you work persistently by remaining on the track. The early election may in distance future give some relaxation to the economy but the state exchequer which is already under the stress could be more brittle with this step.

By general agreement, it is the job of government to establish and enforce the basic rules to enable men to deal effectively together. Without understanding this, the slogan “collective effort, inclusive growth” will be an epithet of the abysmal dismay of Indian Economy. 

Refugee, the Burden of Humanity

Lambodar Prasad Dash

We, Hindu’s believe Transmigration of soul. It is a belief that the Death and Birth are perpetual actions and no animate, even The GOD can defy the birth-death cycle. When GOD takes birth, as we say it reincarnation, it also follows the same law. Difference between ordinary man and GOD is; GOD reincarnate according to its will, but ordinary person has no control on it. He has to take numerous births (approximately 84 lakh) in anticipation of the salvation or realisation of self. During this long journey, the life at a particular body is like an asylum. He takes the shelter of a body according to its past karma (deed). It indicated that the action determines the place of asylum, where you are authorised to certain tasks.

It is a general conviction that when a person took the shelter (asylum) of GOD, all his deeds forgiven and he is given a chance to realise or to atone for his mistakes or allowed to do pious deeds to alleviate his sins. From the time immemorial, the Holy places have been regarded as asylum of GOD. In India, many sacred places Kasi (Varanasi), Ujjain, Puri (SriKhetra), Kedarnath, Badrinath falls in that category. A man who takes shelter there, he is free from any prosecution, can escape from the legal consequences.

Many great Saints opined that India, (Bharat Barsa in Jambhu Dwipa) is a place where a man get an opportunity to realise the self, can wash his sins. Therefore without caste, religious belief, gender discrimination a person allowed here to lead such life where he can get salvation by washing his sins.

A person who takes shelter of GOD usually renounces all worldly desires & pleasures which are inimical to the self-realisation or atonement. As his belongings what he has been accumulated unable to help to escape from the consequences of his misdeeds. His past world and life is quite different from the life under the GOD’s mercy. He must free from indulgence to become a disciplined, humble and loyal to the path of self-realisation.  

Many Hindu scriptures uphold the act of asylum to the people in distress and need. All prescribe that the ultimate duty of a person is the protection of the life and dignity of the asylum seeker. Many from the Sriram’s sena objected the idea of asylum to Vibhishan, the younger brother of Ravan*.

When Vibhishan came to Sriram with his four loyal followers, the Monkey chieftain Sugreeb in a skeptical ordered his army to prepare for possible attack. At this The words of Vibhishan to their concern were striking. He said, “In vain, I strove to turn him (Ravana) from his wicked designs and counseled him to restore seta and seek Raama’s forgiveness. All the response i got was disdain and public insult. Hence I am standing here before you. Renouncing Kingdom, Wife, Children, I seek service and sanctuary at Raama’s feet. I pray you, convey this information to Raama.”

Sugreeba Mistrusted the good faith of the Monster King’s brother and reported thus to Sriram, “Vibheeshana, the brother of Raavana, has come here with his four friends seeking sanctuary at your feet. They are standing there in the sky. ...These monsters are adepts in duplicity. They can make themselves invisible and do many other tricks. They have all the skill and courage of the wicked. One cannot trust them. ...They have come here to mix with us for subversive purposes or else they intend seeking an opportunity to assassinate the leaders in our camp. Whatever Vibheeshana may say, we cannot forget that he is the brother of our foe. By birth he belongs to the wicked Raakshasa Race.”

Everyone in the Srirama’s camp including the chief advisor Jambhaban declined to give shelter to Vibhishana. But Hanumana, the mighty warrior, most wise and loyal follower of srirama said, “...Vibheeshana has not approached us stealthily. He has come to us with frank openness and a clear object. What is there for scouts to discover about him? It has been said by some that his sudden advent is suspicious. But why? What wonder is there if Vibheeshana became disgusted with Raavana and foresaw his certain disgrace and defeat? What wonder is there if he recognised your heroic virtues and nobility and the certainty of your victory? “

When Sugreeba, the chieftain not satisfied with the suggestions of Hanuman, Srirama exhorted Sugreeba with gentle voice, “I see what you mean. But listen. It is natural for kings to suspect brothers and neighbour kings. Good kings who entertain no such suspicion are exceptions....I conclude therefore that, he has no sinister motive against us in coming here for refuge. Letus go further and grant that he has eyes on the kingdom, expecting Raavana’s defeat at our hands. Even in this ambition there is nothing wrong....I would accept him without hesitation. How then can i reject his (raavana) brother who has done me no wrong?”

In Mahabharat, When Baka, the heron who is supposed to be incarnation of Dharma, the God Righteousness put questions to Yudhisthira, the elder brother of Pandavas and promised to return the lives of his brothers if only the answer is correct. The first question is; what is Happiness? Yudhisthira answered*, “A person who cooks vegetables in his own home, who has no debts and who is not in exile, is truly happy.” And the Last question is; what is Highest Dharma in the world? Yudhisthira replies: “Compassion is the highest Dharma.” It is certainly that un-cruelty and non-injury is not compassion, it is feeling the pain and sorrow alike and sharing one’s own happiness with the distressed.

In this context, I remember the answer of J Krishnamurthy to why people quarrel? – Do you know why small children quarrel? They are quarreling for the toys, right. Older persons also quarrel/fight but not exactly for toys but for Reputation, Ego, Property, Power etc. These are like toys for them.

Animals also fight for territory. The belonging to their territory is more or less biological; the preservation of territory is one of the important issues for their survival. According to the territorial behaviour of animals, their territory is six types according to their need. They can compromise with the home range (which usually overlaps with) but can’t with their territories. They protect their territory with different acts from sent marking to defense. Very often they intimidate their intruders and defend their territory by Ritualised Aggression, without engaging in fights which are expensive in terms of energy and risk of injury.

Calhoun (1956, 1962) conducted an experiment in which a colony of Norway rats was made to live in an overcrowded pen. Although the rats were allowed to roam in various compartments, they ended up living together in one pen. Calhoun termed this phenomenon “pathological togetherness”. The rats’ fertility was lowered and their life span was shortened. Mann sums up by saying; “In mice, overcrowding in laboratory cages leads to abnormal sexual behavior, decreased reproductive and nursing capacities, and aborted pregnancies, deficient maternal care for the young and disrupted next building.” (Mann, 1969, P. 17)

We, Human beings are not exactly like animals, much civilised, intelligent and intellectually superior. The territorial behaviour of human beings often termed as “Hunger for Culture” William Langland rightly described – “For he has given you gifts for governing yourself freely; these are Wit and Free Will; each creature has its portion, Flying fowls and fish and Mammals, But man has the most, and is the most blameworthy.”

The human territory broadly is three kinds- Tribal, Family, and Personal. All the Social instincts are any way connected to National territory, Nationalism or patriotism. Territorial behaviour is at large related to a homogenous group consisting of a few members, who share common culture, behavioral pattern. According to Desmond Morris, “Today each nation flies its own flag, a symbolic embodiment of its territorial status. But patriotism is not enough. The ancient tribal hunter lurking inside each citizen finds himself unsatisfied by membership in such a vast conglomeration of individuals, most of whom are totally unknown to him personally. He does his best to feel that he shares a common territorial defense with them all, but the scale of the operation has become inhuman.”

History is evident that many indigenous tribes perished in the process of demarcation of the territorial unit of a nation. They became refugee in their own land where they lived for generations. For them their personal and family life is dearer than any other sociological issues like Religion, Culture.

According to the UNHCR, a refugee, generally speaking, is a displaced person who has been forced to cross national boundaries and who cannot return home safely. Such a person may be called an asylum seeker until granted refugee status by the contracting state or the UNHCR. According to the UN 1951 Refugee Convention adopted, “...owing to well founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is un willing to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it.”

Swami Vivekananda in his “on himself” said, “I believe in God, and i believe in man. I believe in helping the miserable. I believe in going even to hell to save others.” (I believe..., Chapter 10).

Those who displaced forcefully from his own land (country) usually choose a country which is secure, humane and tolerant to take asylum. It is apparent that the dislocation from the own land is more pathetic and painful.  According to Vivekanada’s words, “One wants to lose the individual in the universal, one renounces, flies off, and tries to cut himself off from all associations of the body, of the past, one works hard to forget even that he is a man; yet, in the heart of his heart, there is a soft sound, one string vibrating, one whisper, which tells him, East or West, home is best.”

So, everyone who renounces his land, home waits for the time to return to his land, own land where he born and brought up. So, it is the generous responsibility of a person to facilitate the displaced person to make arrangements to return to his own land safely and dignifiedly. It has been seen that United Nation and some other nations who give shelter to the refugees not making much effort on it. Consequently, the host nation faces some most frightening issues which are quite hard to address.

“In a way, to be indifferent to the suffering is what makes the human being inhuman. Indifference, after all, is more dangerous that anger and hatred...indifference is not a beginning, it is an end. And therefore indifference is always the friend of the enemy.” (The perils of Indifference, Elie Wiesel, Speeches that changed the world P-268).

At present context when most of the nations’ politics are driving by Right wing Nationalism, the Patriotism is now turned into chauvinism or jingoism. The Political set up which rules want to thwart the liberalism and secular traditions, which the whole world (!) in concept accepted after the horror of the World Wars. Even though Refugee is a complex socio-economical issue, but complete indifference to it warrants more complex problems endangering the very basic existence of humanity. The indifference to the Refugees including internally displaced persons will give rise to a permanent mass psychological degeneration like chronic terrorism and inhuman activities.

Kautilya, besides the great social, administrative reformer and statesman, he is also the forerunner of the Statecraft, Nationalism, Patriotism never banned the humanitarian support even to the enemy during calamity, crisis but urged to be cautious and judicious dealing with the asylum seekers. He left to the choice of the king of the host country to act according to the safety, capacity and resource of the nation. He further prescribed that the giving asylum of a different country should be decided according to the foreign policies; however, he didn’t set down rigid foreign policy.

He further emphasized that the foremost duty of the Ruler is to bring the confidence of the subject, whether they are from the foreign land or the subjects of the conquered territory.  Kautilya has not mentioned explicitly about the refugees but mentioned that people from the foreign land should be allowed to live in a village, which is distinctly controlled under certain restrictions and relaxation.

The instructions of Kautilya are somehow relevant to certain situations, but the world scenario is changed drastically since then. The pressure of land and resources are growing according to the growth of the population. We cannot drive them to a virgin land to settle or to extend humanitarian support for them for the unlimited period of time without giving them the right to live with dignity and freedom.  In such situation refugee issue certainly, calls immediate solution not for a single country but for the whole world. It is a burden of Humanity.  

*excerpts from C.Rajgopalachari’s Ramayan – The Vaanaras Doubt, The doctrine of surrender and grace

* Mahabharat’s Dharma, The difficulty of being good, by Gur Charan Das 

Countering the Economic Crisis, Modi Govt is on the horns of dilemma

Lambodar Prasad Dash

I’m neither a great economist like Dr Manmohan Singh, Ex-Prime Minister of India who can predict accurate figures on Economic Crisis nor a panel expert in live newsrooms who are full of biased and half-knowledge of the economic situation. I belong to a state where except 100 odd law makers, mining owners, industrialists, and High-rank officers all are lower middle class or poor. I usually travel extensively through rural Odisha and some part of eastern India. From my first hand experience of the economic situation I can say that the present Economic situation in India is like on the horns of dilemma.

Prime Minister Narendra Modi had Visualised a “New India”, in other words to make some of the Indian cities as “showcase” of development. He knew the situation of urban-centric development, as in 2011 among 100 fastest growing cities of the world India has 25.  He also well calculated the strength and their aspirations of the youth population of India, which stood almost 50% of the total 132 crore populations.  Another important aspect of the youth population is the percentage of married women in younger age groups (15-19) has declined drastically from 70% (1961) to only 20% (2011). Student enrolment in higher education if highest which is almost 80%. With these demographic figures this decade has seen a major shift of people’s expectation and political orientation.

Since the days of major economic reforms in 1990s, the Indian economy gradually started competing with world’s other nearly developed countries especially Brazil, South Africa, China. The per capita income also increased from 1130 US dollar in 2006 to 1646 US dollar in 2014. The economy of India at 2014 was almost strong and vibrant. Pockets of people were deep enough to invest in more education, Health, housing. The labour statistics also shifted from agriculture to infrastructure & mining. The internal migration from Rural India to Urban areas is also increased manifold during the decade. In 2001 census the total internal migration stands at around 31 crore, whereas in 2011 it is 43.36 crore. According to the recent Economic Survey of India-2016-17, the growth of migration for economic reasons is 4.5% annually (!)

The UPA government total spending on social welfare schemes stood 1.7% of the total GDP. The BJP led NDA government in the last fiscal (2016-17) increased the spending but the overall percentage remained almost at the previous figure. Worsening the situation further Narendra Modi Government squeezed the diversification of social welfare schemes.

Initially, the Narendra Modi’s development model seems to be correct when it was at planning level but latter, at implementation stage it developed many technical glitches. The major cause of these problems is the immaturity to the changing economic scenarios. For example, according to the Asian Development Bank estimation for 2014-15 the Extreme Poverty percentage of India stood at 21.9% , which means around 30 crore people are living under this category. But according to the World Poverty Clock real time data (on 9.45pm, 21/09/2017) the total poverty population in India stood at 14.1% of the total world population which is whooping 91 crore people are below extreme poverty line (per day income below 1.9 US Dollar). In such situation, Modi Government started a direct money transfer scheme under Ambitious Pradhan Mantri Ujjwala Yojana (PMUY) with free LPG connection to 5 crore families below poverty line. There are many instances where as a rural poor sold its LPG cylinder to another affluent person or many subscribing these benefits on their names. These instances are further increased after the fall of employment due to Demonetization. The poor families used this benefit as a source of income.

Similarly in the Smart City Mission the rate of Rural to Urban migration, the percentage of migration for economic reason not taken in to account. For example, according to an NGO working for slum areas in Odisha, within last three years the slum population of Bhubaneswar increased, 6-7 new unauthorised slums established having population more than 7 thousand. Government is striving between their resettlement and implementation of Smart City. In the September, 2017 monsoon session Odisha assembly passed the slum dwellers act which guarantees 160 square feet land for the construction of house.  This act further made the vision of smart city messy.

After criticisms from many quarters for growing unemployment, weakening GDP, Growing fiscal deficits,  fattening the NPA of Banks, GST impinged inflation on 20 September, 2017 an expert committing meeting was chaired by Finance Minister Arun Jaitley, where it was decided that Government soon to revive the investment plans to counter the ongoing economic crisis. The present economic crisis being felt at Macro level, the shifting of investment plans might create a ruckus in FDI investments. The investors will be more skeptical towards the government. This situation might create more ripples than pacifying the situation.  His stress for the Universal basic income scheme indicates the decreasing funding of public welfare schemes and increase schemes for Job creation. This is quite difficult to manage. If Government is mulling for more shifting of tax slabs and structures the manufacturing market will be put under threat, which is already under pressure. Last though not the least concern, whether the new shift of investment can fulfill the aspirations and dreams of the young generation which were largely hyped by Narendra Modi during his 2014 election campaign.

The Hashtag: Block Narendra Modi

Lambodar Prasad Dash

We usually sit for “khatti”, a local terminology for a free forum of people, typically with 10 to 15 members sits regularly at a definite public place generally near a tea shop for formal talks. I always a latecomer among the khatti members but today morning with everyone’s surprise I marked my attendance earlier than others. Last night I could not sleep well due to the anxiety mixed with grief and depression after going through series of threads reacting to the murder of noted Kannada journalist and Activist Gauri Lankesh, news items, googling about the information on the murder of some rationalists like Pansare, Dhabolkar and kalburgi.

Characteristically most writers, activists, journalists, politicians equivocally condemned the killings. As all the activists who were getting killed had been linked to the left-wing thoughts, liberals in attitude, seculars in their belief and rationalists in their approach, and all belonging to Karnataka state. Their activism was largely directed at casteism, communalism, religious bigotism and anti-establishment which invited the wrath of the communal and religious forces like Sreeramsena, Bajrang Dal and Sanatan Samstha. The information had not taken my sleep but the reactions of persons who are critical about the activisms of Gauri Lankesh. Their response to the murder disgraced all the norms of human dignity. Even they were not set back to abuse vehemently when Union Ministers like Ravishankar Prasad, Rajyabardhan Singh Rathore had come forward to criticize such reactions. Most of the abusers and trolls are followed by Prime Minister Narendra Modi and they also proudly mentioned it in their social media profiles. This was not the first case, earlier on several occasions Prime Minister had come under strong criticism from different quarters, but the trend has not succumbed to.

Meanwhile, I was scratching my head how to react such heinous trolls, around 11.45pm I just come through a tweet from a Dr Rakesh Parikh condemning such abusers and following them by PMO Modi, simultaneously it urged for blocking Narendra Modi’s personal twitter handle. Immediately I RTed it and blocked Narendra Modi’s account in protest. By then the hashtag had only two posts. But in the next morning while I was browsing the internet waiting for other members to join with a bolt from the blue I found the Hashtag #BlockNarendraModi was already lifted by major news sites.

However, scaling up the ignominy I also came across a news item where BJP IT cell head Amit Malviya who was also among the abusers had come forward with a statement that as Prime Minister is responsive to general public…he followed by many a people….how can he demand a character certificate from them before following back(!) (The words are not exact but reflected the similar meaning)

With all these developments and its impact, I had decided to have a discussion on it. When my friends sat to kick-start our Khatti program with a cup of warm tea.  I vociferously put my point by quoting “as is the king so are the subjects” at least who adore him. Some senior members yet to give their comments, as I expected a series of questions were put to me by a political activist friend- Could it be possible to create “mass hysteria” through propaganda (?) If it is possible, then why not other political parties not thriving on it or at least able to create for them (?)

The answer to these questions might not be easy to present in a nutshell, but I tried to convince him that through a planned propaganda one can manipulate the weakness of the human mind as his perception is selective and also the retention. Since he is a strong adherent to Narendra Modi’s hyped image he took my argument for granted. However, I was not in a mood to step back and had come with all preparations, I continued;

A Political Party which got an absolute majority in 2014 general election with 31.34% popular votes out of total 65.3% voter turnout. It won 282 seats out of 545 members in Lower house, which is 51.9% all seats.  58 MPs out of 245 Members in Upper House, 1197 MLAs across the India and 18 states ruled directly or indirectly with its allies. Of course, without any doubt, all these achievements are remarkable for a political party which reestablished its existence 37 years back, after the disintegration of Janata Party. The Indian Voters gave their mandate to a political party for the first time in the last two decades with such huge support. This Implies two inseparable issues of a democracy, Firstly, Voters relied upon BJP ( Bharatiya Janata Party) as a political party more than others to solve the existing issues, Secondly, in turn, they accepted the ideologies Of BJP which had been remained at a bay. These two issues are not separated with a firm demarcated line but several overlapping contours.

It is evidently much accepted rule that Power comes with responsibility. In a democratic system, power goes from bottom to top. Initially, a political party makes the people responsive towards the prevailing problems and then places its alternate solutions through manifestos. In the next stage, it shows its willingness to take the responsibility to solve the problems and seeks the support of the people to handover the power to govern. All these activities are termed as political campaigns. These Political campaigns designed in such a way that it can successfully persuade voters to rely upon their agenda and manifesto. When the Love for Power permeates the true spirit of a democratic process, Political parties polarizes instead of persuasion; influence the voters through propaganda rather than awareness; manipulate the mandate through government machinery. All these perverted practices not so effective for a mature mind rather very successful for adolescents. When a country has more than 50% of its population is below the age of 25 years and more than 65% below the age of 35, the propaganda, influence, polarization works astoundingly.

In 2014 general election, around 23.1 million voters were from the age group of 18-19 years (!) In 2014 general election BJP got 171,660,230 votes. The statistics show that the BJP pocked most of the new voters. All welcomed BJP as an alternative to Congress as they are experienced only the government of Congress-led UPA. The psychology of adolescent mind according to Bradley Busch, Psychologist is – they are more likely to take risks, be sleepy, misread emotions, give in to peer pressure and lack of self-control. According to the United Nations, the average age of India’s population will be 29 years, and dependency ration should be just over 0.4%. With all these youth dominant demographics BJP set its development dream sail for 2020.