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." 

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.