Indian economy in distress
Reema Shaukat
11/2/2018

 

MODI’S dream to make India incredible, compelled him to create difficult economic crises for country. He always wanted to make India, an economic giant in the region, to counter China in its markets which is world economic power and on the other hand it always tried to pressurize Pakistan by buying arms and weapons from Israeli and USA markets and thus generating arms race in the region. The obvious reason is to become strategic tycoon of South Asia by competing with China and other regional powers and in region it often disturbs balance of power by initiating arms race. India has adopted a strategy to portray itself an economic colossal and thus it tries to conceal its domestic policies which are quite difficult for Indians. With the upcoming Indian elections in 2019, Modi apart from quaking many domestic social evils in the country on the name of Hindutva has raised troublesome economic policies for citizens. In a recent survey to monitor economic policies under Modi reign, it was disclosed that Modi made huge promises to boost India’s economy, add millions of jobs and bring the ‘good times’ back to the developing nation. However the fact is that India’s economic expansion has slowed to its lowest level in three years. Small businesses are still struggling after a considerable refurbishment of the Indian currency and sales tax system. Modi’s own allies and party members are criticizing him for such monetary decisions and think this is going to affect Modi vote bank in 2019 elections in India.

BJP former lawmaker and finance minister Yashwant Sinha while pointing out poorly planned economic reforms said that in India, ‘Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the work force, is in the doldrums and exports have dwindled’. Another leading BJP lawmaker, Subramanian Swamy, said ‘India was facing the possibility of a major depression. The economy is in a tailspin. Yes, it can crash. We need to do a lot of good things to revive the economy. Even a tailspin can be made to steady. If nothing is done, we are heading for a major depression.’ Economists have said the country needs to maintain 8% growth to add enough jobs for some 12 million young people joining the work force every year. Economists in India are warning government that may be too little, too late.India who is considered as darling in international markets as buyers of arms and ammunitions is facing loss because of less foreign investments in its local markets. In end of 2016 Modi’s new economic reforms shattered its economy more. Without warning, Modi appeared on national television to inform citizens that most of their currency would be worthless in the morning, as government declared 86 percent of all rupee notes would be replaced with newly designed bills. Govt said the move was aimed at cracking down on tax evasion, corruption and counterfeiting. But with most of the new bills not yet printed, ATMs ran dry for weeks as account holders stood for days in long lines at banks that gave out only limited withdrawals. Many small, cash-reliant businesses including grocery stores and home-based workshops suffered huge losses or went under.
Modi in another reform, replaced complex system of cascading federal and state taxes with a single Goods and Services Tax, thus a badly conceived and poorly implemented GST played havoc with businesses and sunk many of them. Rural Indian villages and towns, where more than half of the country’s population relies on farming for their livelihoods, were managed poorly. Demonetisation left many farmers, already among the poorest, unable to buy seeds and fertilizer for the sowing season. Their distress was compounded by two years of poor monsoon rains and drought. In the latest development, Indian farmers staged a protest under the banner of Bharatiya Kisan Union (BKU) demanding waiver on loans. However, they weren’t allowed to raise their voice and reach parliament. Major problems like lack of water, poor irrigation and the costs of farming raise problems for small farmers to make money. India’s agriculture sector has structural problems to which there are no easy solutions and significant structural changes have not been made over the years by governments and farmers are the worst victims.
In one of Gallup survey, it was stated that Indians are worse off in Modi’s tenure. India’s largely rural population initially led the decline in life evaluations, with thriving dropping from 14% to 7% between 2014 and 2015, and edging even lower to 4% and 3% in the years after that. Declines among urban Indians have been much more gradual, although they are down in the past year, dropping from 11% to 4%. This was also argued in an article, “Sleepless in Modi’s economy” by Indian journalist Latha Jishnu who is based in New Delhi, well-defined how the Modi’s economic policies are creating disturbance for common people. In an article Ms. Jishnu states that, “The hard truth is that India has slipped badly. From being the poster boy of the big economies in 2015 when it was the world’s fastest-growing big economy India is turning into a laggard, problem child whose fundamental deficiencies are coming into the spotlight. Researchers argue that Modi’s policies will be dead duck soon and give serious blow to his so called stature. World and people in India are well aware of his fascism for minorities and even for low caste Hindus. If the societal decline in India keeps on rising and the way people are suffering from “saffronisation”, one day it will appear as a huge jolt to its traumatised frugality.