Whichever way one looks at it, we are staring at a bleak year for the nation, as we get ready for another general election and the prospect of several months of horse-trading, compromises and the most self-serving political alliances, both before and after the general elections.
The promises of 2014 look like a pie-in-the-sky; while much harm has been caused by overambitious (and sometimes senseless) schemes and their poor implementation. The biggest proof of this is the sharp revival of the Congress Party. Far from wiping out the Congress (Congress-mukt-Bharat), a nation that was fed up of unbridled corruption and cronyism of the United Progressive Alliance 2 (UPA2), gave victories in three significant states to the Congress, in the run up to 2019.
A resurrected Congress, waiting to forge crooked alliances with the same old parties and the same corrupt politicians, waiting to grab malaidaar portfolios, is hardly comforting. However, the remarkable improvement in Rahul Gandhi’s confidence, stature and willingness to tease and heckle the ruling alliance and prime minister (PM) Modi, in their own style and tone, is clearly rattling the government.
While diehard supporters of the Bharatiya Janata Party (BJP) will talk about the introduction of GST (goods and services tax), Insolvency and Bankruptcy Code and a few infrastructure projects as big achievements, the truth is that the NDA (National Democratic Alliance) has botched up an extraordinary opportunity to permanently set India on a path of productive growth.
The reason: poor sequencing, absurd decisions (demonetisation was bad for the economy, the people and the BJP itself), arrogance (talking to only to a few chosen ones) and needless emphasis on event management and false optics. The hurried, midnight launch of GST; fixing the ease-of-doing business ranking; and converting the highly laudable Swachh Bharat campaign into one of celebrity photo-opportunities (instead of working with pioneering reformers such as Sulabh Shauchalaya) are prime examples.
In the process, the BJP ignored the core promises that had swung the non-politically committed voters in its favour in 2014. They had voted for economic development, good governance and less corruption. They got none of these.
Having ignored most constituents for over four years (this column will not go into the tacit encouragement of fringe elements to foment religious intolerance, leading to lynching and unrest) the government now seems to be gearing up for a knee-jerk appeasement of various vote banks before the elections. Here are a few examples.
MSME (medium and small enterprises): They are the lifeblood of the economy, but neglected and exploited for over 70 years. They pay the highest interest rates, are harassed by all civic and inspection agencies of government, and treated with utter callousness even if they get access to bank loans. The MSME segment has been a big supporter of the NDA; but the past four years have seen it battered by demonetisation and the malfunctioning GST system, with no improvement in ease of doing business.
The government has yet to acknowledge that GST is called the Gabbar Singh Tax not because every businessman is a crooked, tax-evader, but because the hurriedly launched system is still not working efficiently. Under pressure from a swadeshi ideologue to offer a bailout or carrot to this segment, the Reserve Bank of India (RBI) has appointed a committee to examine how the MSMEs can be won over. Even before the committee’s report is out, RBI has allowed a one-time restructuring of certain loans of up to Rs25 crore which is, essentially, a bailout.
Farmer Bailout: Farmers are another constituency that the NDA has ignored and even the long march to Mumbai and then to Delhi did not signal any urgency to address their real issues, not even in states where the BJP was in power. Finally, Rahul Gandhi’s loan waivers for farmers seem set to trigger a knee-jerk response which, like bank recapitalisation, will apply a band-aid without offering any real solution.
reports, “The Centre will likely announce direct benefit transfer (DBT) worth Rs 4,000 per acre per season plus interest-free crop loan up to Rs1 lakh per farmer in an instant two-fold relief to the farmers.” It estimates that this will cost Rs2.3 lakh crore which, many speculate, will come from RBI’s reserves and was the reason for RBI governor Urjit Patel’s abrupt resignation in December. The next government will have to deal with the consequences of this decision.
Systematic Destruction of Public Sector Banks (PSBs): Despite the much publicised gyan-sangams and announcement of Banks Board Bureau for PSB appointments, the NDA systematically decimated PSBs and did nothing to address the core problems of behest lending, corrupt appointments and accountability of top management. For much of NDA’s tenure, PSBs were kept headless, while being whipped to fulfil Jan-Dhan account enrolment targets.
As an aside, is it credible that 336.6 million persons deposited a whopping Rs86,320 crore in Jan-Dhan accounts, when banks expropriated over Rs10,000 crore from ordinary depositors for not maintain average minimum balances in their savings account?
Post-demonetisation, PSBs were told they were useless and needed to be merged, purged and cut to size. There is no mention of improving management accountability, tackling fraud or recognising that they remain the primary access to banking in rural India, and it will be long time before everybody has the connectivity and confidence to switch to a PayTM or GooglePay.
Like banks, depositors have also been hassled. Unconscionable charges, the threat of confiscating deposits under the Financial Resolution and Deposit Insurance (FRDI) Bill (dropped in August 2018, after it threatened to cause a run on PSBs), and harassment over mandatory linking of Aadhaar numbers to bank accounts, phones, etc, until it was finally halted by a Supreme Court order, are examples.
The NDA’s most touted economic achievements are the Insolvency and Bankruptcy Bill, the introduction of GST and infrastructure development. All three are work-in-progress and, even if the government denies it vehemently, we have anecdotal evidence of how empowering tax officials with draconian powers has only led to an exponential increase in corruption.
The Insolvency and Bankruptcy Bill: The new legislation and action against defaulters, like Vijay Mallya, has, indeed, scared wilful defaulters; but the biggest of them all shows no sign of being cowed down. The Essar group has spun a googly by offering to pay back all it owed, suddenly, and has only managed to delay what would have been the showpiece of the bankruptcy action. The government’s silence and the fact that promoters Shashi and Ravi Ruia have been chosen guests at the PM’s swearing-in ceremony and all overseas delegations are indicative. Ravi Ruia even obtained permission to travel abroad, despite a lookout notice in the 2G scam-related cases because he was invited to be part of the PM’s delegation.
But the entire achievement on this front has been eclipsed by Nirav Modi, Geetanjali Gems, Suraj Diamonds and Sterling Biotech scams, not to mention the massive systemic shock and fraud that has erupted at Infrastructure Leasing & Financial Services (IL&FS). Moreover, the average recovery in bankruptcy cases is likely to remain below 20%-30% of what was owed to banks.
Infrastructure Development: This, too, is a mixed bag. Many completed projects were started by the UPA. Mumbai’s expensive coastal road is being pushed to help developers, while the trans-harbour link, which has been pending for over 60 years, and could expand the city and reduce realty prices, is moving at a snail’s space. Very little has happened on use of water transport and the multi-modal transport hub (MIHAN project) is languishing, even though it is located at Nagpur, Nitin Gadkari’s home city and the RSS headquarters.
Unfortunately for most of us, voting out the BJP is not the answer. The arrogant old guard of Congress, which was gave us one of the most corrupt administrations and was voted out in 2014, is alive and kicking.
In fact, UPA-2 was responsible for making draconian changes to key statutes, ensuring that financial regulators are accountable only to the finance minister and not the public, and tying up corporate India in endless litigation leading to direct benefits for key ministers.
No right thinking Indian wants a return of UPA-2. Although Rahul Gandhi now excels at heckling the PM, he has yet to engage on core issues or show us how his government will be different, if it comes back to power. In fact, if the choice of chief ministers in Rajasthan and Madhya Pradesh is any indication, we may see the same old UPA ministers grabbing key portfolios in a Congress-led government.
If we, the people, want to ensure that we do not slip back into an economic mess, we need to demand better accountability from our government. The Election Commission of India can ensure this in two ways: first, ensure that political parties do not back away from the commitments made to people in their election manifestoes and campaign speeches (so no about–turn, like the PM did on Aadhaar). Secondly, give teeth to the ‘none-of-the-above’ (NOTA) button on voting machines by declaring a re-election, if the number of votes polled by NOTA is the highest. The latter is crucial, because a mere announcement to this effect will force political parties to think of better candidates and discourage them from splitting votes by fielding dummy candidates.