The ruling Bharatiya Janata Party’s (BJP’s) agenda for the upcoming state assembly elections and the 2024 general election has already been set via three important speeches delivered between August 9 and 15. Two of them were delivered during the no-confidence motion in the parliament, and the third from the ramparts of the Red Fort on Independence Day. Although the two occasions were different, and the content of the speeches ought to have been different, the tone and tenor, however, were the same.
The parliamentary speeches were meant to defend the government’s performance, so they had to be partisan but perhaps less combative. But, the tenor of the Independence Day speech ought to have been such as to fill the deepening chasm between the various sections of society and the political parties. To make India a developed country by 2047, to make India the third largest economy in the world in the next five years, and to make India great in the next 1,000 years requires cooperation from all. None of these goals would be achieved if the present deep divides are not bridged.
The ruling party has asserted that it has done well on all fronts. It has especially patted itself on the back for its economic management in spite of the Coronavirus pandemic and the Ukraine war. India is presented as the one bright spot in the gloomy world economic scenario and statements from the United Nations, International Monetary Funds, private banks, etc., are cited to back its claim.
The reality
In the parliamentary speech, the ruling party contradicted itself on several counts. The Atmanirbhar package announced in May 2020 to deal with the Coronavirus-induced crisis proposed the dismantling of the public sector through various forms of privatisation. It was proposed that there would not be more than one public sector unit (PSU) in any of the sectors.
But, in the parliament, PSU banks were praised for announcing record profits, especially, the State Bank of India. Then why privatise them and lose the annual dividend that the government earns from them? The Life Insurance Corporation (LIC) also came in for praise; but the government is seeking to privatise the insurance sector. Not only the PSU banks and insurance companies are profitable, but their social role in serving the poor is also critical.
Hindustan Aeronautics Limited came in for praise. Then, why was it cut out of the Rafael deal in favour of a private company that had little experience in aircraft manufacture? This episode is a glaring example of the widespread prevalence of cronyism in India, which the prime minister says needs to be ended.
Persisting cronyism and corruption
Did cronyism end? It has changed its form and reached new heights with conglomerates being favoured at the expense of others. Consider a few cases. Acquisition of Mumbai airport, allocation of smaller airports, ports and infrastructure projects to the favoured one, last-minute acquisition of ACC and Ambuja Cement by the favoured business and so on. The lesson for other businesses is that if they are highly profitable they could be grabbed by some other big businessman. The resulting damage to the business environment has led to tens of thousands of high-networth Indians (HNIs) leaving India since 2014 and lakhs have given up Indian citizenship recently.
Cronyism weakens economic administration and leads to the persistence of black income generation. A decline in the black economy would have led to India’s tax/GDP ratio to rise. It has remained at about 16-17% in the last 10 years. Direct taxes as a per cent of GDP has hovered at about 5.5-6%. If the black economy had been checked, it should have conservatively risen to 12% of GDP.
Increased GST collections post-pandemic are being shown as an example of better compliance. But this is expected due to high inflation, increase in imports, and growth of the organised sector at the expense of the unorganised sector. A large number of fake companies to claim input credit are being detected every month and official evasion is running into tens of thousands of crores.
Corruption cases are persisting. Demonetisation completely failed, with, all the high denomination notes came back, including the black money hoards of about Rs 3 lakh crore. The case of Rs 30,000 crore of drugs coming through Adani port remains unresolved and only minor players were caught.
Daily new cases of corruption are exposed. Recently Comptroller and Auditor General (CAG) has flagged that lakhs of claimants are linked to the same mobile number under the Ayushman Bharat scheme. The CAG has also flagged inflating of road construction costs. Cases of fake Aadhar cards and other identities are being reported in the press.
GDP Manipulation
Indian economy is officially said to have become the fifth largest in the world, and now, it is being said that in the next five years, it will become the third largest.
India’s GDP data has huge errors. Since 2016-17, when demonetisation was announced, the unorganised sector has been on the decline. But the official data does not capture it. This results in an overestimation of the GDP and its growth rate.
Consequently, the economy instead of growing at 6-7% per annum – as officially claimed – has been hardly growing since 2016-17. The huge error in the official data becomes apparent when the 2016-17 growth rate is officially given as 8% – the highest of the decade. But, reports from that time point to a decline in production and trade. With reasonable assumptions, it can be shown that growth was overstated by at least 5%.
Further, if the unorganised sector is declining or even stagnant then poverty cannot be declining. The claim that Multi-dimensional poverty (MDP) declined in 2020 strains credibility. That was the pandemic year when health infrastructure was overwhelmed, a large number of deaths took place which were not recorded and schools were closed so that students could not attend class.
Since the unorganised sector is the overwhelming employer in the economy, its decline underlies the growing unemployment problem with 280 million not having proper work and incomes. It is this that underlies family poverty. Inflation has added to the woes of the poor by reducing the purchasing power of their already low wages. This has caused demand to decline and resulted in an economic slowdown. At this rate, we do not know what will be the situation in 2027 or a thousand years later.
Finally, growth in the organised sectors at the expense of the unorganised sector has caused disparities to accentuate. So, GDP growth hardly represents the living standard of the marginalised sections. In any case, in per capita terms, the economy is at the 138th position in the world. Being the fifth or the third largest world economy is no consolation to the marginalised.
Vishwaguru?
The claim of India being Vishwaguru sounds hollow when we increasingly depend on the import of technology. Dependence on FDI, remittances, foreign consultants, and audit firms is no sign of being Vishwaguru. US citizens are not clamouring to take up Indian citizenship, while a large number of Indians are leaving the country, including HNIs, to take up citizenship in the US, Australia, etc. We seek more H1B visas so that our talented resources can work in the US and often they settle down there.
Worsening Unemployment
Youth unemployment has remained above 22% since 2014. The mismanagement of the economy has shrunk the job market forcing people out of the workforce. The government could have stepped up but it chose to turn its back and disregard the plight of our youth. Last year, the Minister of Personnel informed the Lok Sabha that between 2014 and 2022, 22 crore government job applications were received whereas only 7.2 lakhs were provided employment. For every 1,000 applications, only 3 jobs are being created in the government sector.
What’s worse is the continuous drop in recruitment. The number of candidates appointed has dropped 70% since 2014-15. In 2021-22, only 38,850 candidates were recruited against 1.86 crore applications. The references to MUDRA Yojana as a serial job creator are misplaced. Almost 80% of the loans in 2021-22 are in the Shishu category where the loan amount is less than Rs 50,000.
The youth have fewer opportunities because the marquee projects have not come through. In his 2014 speech, Prime Minister Modi called upon the world to ‘come, make in India’. The target was to create 10 crore jobs in the manufacturing sector by 2022. Between 2016 and 2023, 15 lakh manufacturing jobs have been lost.
The social implications of unemployment and persisting family poverty are severe. It has led to frustration among the educated youth, resulting in growing substance abuse, rising violence in the family and crime. It has also resulted in lumpenisation and availability of semi-literate youth for nefarious purposes by vested interests.
The common people are concerned with rising inflation but the prime minister brushed aside those issues with aplomb, claiming, “We have been able to control inflation successfully.” The Ministry of Statistics released inflation numbers on the evening of August 14 and they tell us that retail inflation is at a 15-month high and vegetable prices have increased 38% month-on-month and 37% year-on-year. Persistently high fuel and LPG prices have been hurting common people for months now.
Forgotten Promises
Let us now take a look at some of the big ticket announcements made from the ramparts of the Red Fort in previous years and how they square up now.
Doubling of Farmers Income
An issue that concerns 70% of India, was the promise made in 2018 of doubling farmers’ income by the 75th year of independence – i.e. August 2022. The Modi government first made this promise in February 2016 and again in 2022. Agriculture minister Narendra Tomar told parliament in July 2022 that the farmers’ income has doubled. However, no figures were provided to make a clear-cut distinction between what they earned in 2016 and what it was in 2022.
Quoting NSSO data from January-December 2019, the Hindu Businessline in 2022 said, “The average monthly income per agricultural household, from all sources, was estimated at Rs 10,218 when compared to Rs 6,426 in 2012-13.” This meant farm incomes had gone up by 59% over the previous seven years in 2019.
NewsClick reported that “to double farmers’ income from the 2015-16 level, income needed to grow at a rate of 10.4% per annum from 2015-16 to 2022-23. Contrarily, farmers’ income grew at a meagre pace of 3% per annum between 2012-13 and 2018-19, as per the latest data released by [the] Ministry of Statistics and Programme Implementation.”
Budget 2023-24 did not even mention the promise of “doubling of farmers’ income” and with the slowing of “agricultural growth of 3.47% in the Modi period of 2014-15 to 2022-23”, this appeared to be a “distant dream”. And so the PM made no mention of this in his 2023 Independence Day speech.
Digital India
In his 2020 Independence Day speech, the prime minister promised to connect ‘every village in the country’ with optical fibre within the coming 1,000 days.
“In the last five years, 1.5 lakh gram panchayats in the country have been connected with optical fibre cables. Before 2014, only 5 dozen panchayats in the country were connected with optical fibre. Now, our aim is to connect every village with high-speed internet. This goal will be met in the coming thousand days,” he had said.
The National Optical Fibre Network – later renamed as Bharat Net – was launched in 2011, to connect 2.5 lakh gram panchayats. However, according to the prime minister, the scheme took off only after his government came to power.
By 2022 this picture had improved further as per a response to a parliament question. “As on 30.09.2022, a total of 35.5 Lakh Route Kms Optical Fibre Cable (OFC) has already been laid in the country, which will facilitate the increasing demand for better bandwidth, resilient and high volume connectivity,” Union minister of state for communications Devusinh Chauhan said in a written reply to a question in the Rajya Sabha in December 2022.
A closer look at the project throws up the following facts.
An IAMAI report of 2022 says India has 52% active internet users with rural India driving growth. But urban growth was 6% in 2022 and rural India witnessed only a 14% growth.
The deadline which had quietly been shifted from 1,000 days in 2018 to 2025. Even this looks difficult to implement.
“Involvement of multiple agencies, slow progress by implementing agencies, delay in right of way clearances from government instrumentalities regulating forest land, railway lines, defence areas, highways, oil and gas pipelines, or any other agencies or departments are some of the reasons for delay in implementation of the BharatNet project,” minister of state for communications Devusinh Chauhah had said in Parliament in December last year.
The PPP model the government was banking on too hasn’t found any takers.
“Global bids were invited on 20 July 2021 for implementation of BharatNet under PPP model. However no response was received from any of the prospective bidders. A revised strategy for BharatNet is accordingly being formulated,” Chauhan had said in July last year in Parliament.
Another reason is underspending of funds allocated for the project. “A significant cut in spending from the Universal Service Obligation Fund (USOF) in FY23 against the Budget targets indicates that for the sixth continuous year, the government’s spending to provide connectivity to rural and remote areas to bridge the digital divide has slowed down,” says a Financial Express report.
Swachh Bharat
In his Independence Day speech in 2015, Modi said that his government would solve the country’s sanitation problems by 2019. In his next Independence Day speech, he said that two crore toilets had been built and 70,000 villages made open defecation free (ODF). In his 2019 speech, Modi said that in the “next few weeks”, India will declare itself ODF.
On October 2, 2019 rural India declared itself ODF. Coincidentally, 2019 was also the 150th birth anniversary of Mahatma Gandhi, the self-effacing champion of cleanliness.
“We changed the narrative. People used to hesitate in talking about toilets. Now, it is a part of the conversation from Bollywood to the field of sports,” Modi said then.
“In 60 months, we have provided toilets to over 60 crore people by constructing over 11 crore toilets. The world is amazed on hearing this,” he said. As per Census 2011, 70% of rural households did not own a toilet. Now, according to the Swachh Bharat Mission database, 100% of households in India have access to toilets.
In 2022, The Wire did a 24-part series covering the sanitation crisis in each Indian state. Some of the preliminary findings said the Swachh Bharat Mission websites have been showcasing over 30% manufactured data, with over 12 lakh toilets ‘constructed’ between 2014 and 2020 that do not exist, and beneficiaries who have no knowledge of the toilets apparently built in their houses.
Another report found that data on several districts’ ODF status was also found to be manufactured, with over 20 million people in rural areas still defecating in the open. Bihar, Odisha and Tripura are the worst performers in actual ODF estimates, despite declarations to the contrary on their government websites.
The report added:
“Many surveys since 2017 have found that of the households which have toilet access, over 30% are never used. In 2021, the survey found, more than 45% of India’s population still defecates in the open. The reason for this is the non-maintenance of built toilets in combination with usage of substandard materials for construction. False claims by the government like ‘5.5 lakh sanitation workers have been linked to social welfare schemes’ further worsens their conditions. With poor implementation in rural areas, over three lakh sanitation workers and waste workers are facing risks – and not benefits – from toilets built under this Mission, since they live on the peripheries of ‘dumping sites’.”
(This article has been compiled by us based on three articles in ‘The Wire’: “The Hollowness of the Modi Government’s Tall Claims and Self-Praise on Economy”, by Arun Kumar, retired professor, Jawaharlal Nehru University, New Delhi; “PM Modi’s Independence Day Speech Is High on Lofty Rhetoric but Devoid of Plan of Action”, by Akash Satyawali, national coordinator, AICC Research Department; and “How Do PM Modi’s Big Ticket Announcements From the Red Fort Square Up?”, by Meetu Jain.)
