Subramanian Swamy plays canary in the coal-mine in a recent interview, where he said that the economy was heading for a “tailspin” and that the signs have been evident since May of last year when he first warned Prime Minister Narendra Modi of the possibility.
It is not a new message; economists have been warning of this possibility for over a year now, before demonetization, first, and then the hasty introduction of GST, struck further blows at the economy. Those warnings were deflected as coming from ‘anti-nationals’ and the ‘Lutyens media’ — criticisms that can hardly be leveled at Swamy, which is why it pays to listen to the interview in its entirety.
‘Tailspin’ is the leitmotif of an alarming number of stories/analysis in the media. A detailed Livemint analysis of the state of the economy has ‘tailspin’ right up there in the headline; the same paper details a UN Conference on Trade and Development report that warns of ‘serious downturn risks’. A recent State Bank of India report categorically refutes BJP president Amit Shah’s spin that the slowdown is for ‘technical reasons’. The Economic Times warns of a looming pension crisis; the Organization for Economic Cooperation and Development has downgraded its forecast for the fiscal ’18.
Swamy makes the point that a series of planned remedial measures is urgently required if the trend is not to become irreversible. A series of news items from recent times indicates why:
In May, a Parliamentary panel said agriculture has become an ‘unviable’ occupation, and that the nation’s food security was at risk. Underscoring the Parliamentarians’ concern is a mounting wave of protests by farmers in Tamil Nadu, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Chattisgarh, Karnataka, Punjab (today), and nationwide (planned). The proximate causes of each protest differ; the stress the agricultural sector feels is manifest across all.
The RBI has been voicing its concern about mounting bad debts that have touched the $180 billion mark. The Rs 81,683 crore written off in fiscal 2017 is a 41 percent jump over the previous year’s figure.This month began with the news that the GDP has fallen for the sixth consecutive quarter. Hyundai, the second largest auto manufacturer in the country, rang alarm bells when it said that the manufacturing sector has been hit by the frequent tax hikes and uncertainty over GST and, what is worse, warned that this will affect not merely sales, but also investment in new products. (Boycott Hyundai, a few hotheads said on social media in the wake of this statement — if you start boycotting everyone who says the economy is in trouble and needs fixing, pretty soon there won’t be anyone left). Related to Hyundai’s concern, a Bloomberg report raises the alarm over the precipitous decline in employment and warns that this is about to get worse.
A well-reported story by M Rajshekar in Scroll this week looks at how the harmful impact of GST is playing out in Surat’s textile market. His case study provides a way to think through similar economic disasters elsewhere in the country, across various sectors in the small-business space. (As I was writing this, ANI quotes Finance Minister Arun Jaitley as saying the early days of GST are going smoother than expected — which makes you wonder just how big a disaster the government did expect if the current scenario is ‘smoother’). And an audit of MGNREGA is a litany of bad news: wage rates being paid are lower than the mandated rates, states are unable to complete planned works on schedule, wages are not being paid on actual work done but merely to get the statistics right, the assets created through the work is of poor quality, and the Centre has not been able to provide enough funds to keep the scheme running smoothly.
A terrorist attack in Kashmir continues the cycle of violence that has plagued a region which, not so long ago, was showing signs of settling down to a semblance of peace and normalcy. (Two terrorists have since been arrested). The violence further exacerbates the downslide — a recent IndiaSpend data deep dive pointed at the loss of thousands of jobs, and a vertiginous decline in income from the tourist industry, as a direct consequence of renewed violence.
All of this is interconnected: a sustained downswing in the economy impacts both agricultural and manufacturing sectors; this, in turn, causes loss of unemployment, which adds to the number of disaffected, disenchanted young men and women. Not so long ago, economists were talking of India as being in a state of jobless growth — now, all indices indicate that while joblessness escalates, growth has also declined.
In course of a recent speech in Times Square, New York, Rahul Gandhi singled this out as the biggest problem facing the country.
…but the real challenge facing India is that 30,000 youngsters (are) looking for a job and only 450 getting a job. You can imagine as this process continues what the result will be. India simply cannot give its youngsters a vision if it is unable to give them a job.
The ‘demographic dividend we prided ourselves on, and postulated would put us ahead of China as the world’s biggest economy, is rapidly turning into a demographic time bomb. (Cartoonist Hemant Morparia looked at the economic situation and came up with this).
All of this brings up a related thought. Time was, television prime time was given over to talk/analysis intended to shed light on the problems of the day. Today, the focus of prime time talk shows appears to be to distract, to deflect, to dive down every possible rabbit hole in a bid to avoid talking of real, pressing issues.
Just this week, there was one channel that spent precious time talking of Mamta Bannerjee’s asinine fiat on Durga puja processions; another ‘debated’ a peer who was caught out in an egregious lie. Even when a particular channel brought up the Kashmir terrorist attacks on prime time, the focus was not on the law and order situation but the presumed indifference of the ‘Lutyens Media’ and the ‘Award Vapsi gang’.
Increasingly, this begs the conclusion that the distractions are planned, deliberate, and carefully confected to keep the viewer from focusing on the pressing issues of our time. By this act, the influential channels are guilty of a disservice to the public in whose interests they purport to speak.
One of the most important books published last year was David Greenberg’s Republic of Spin. A passage from the introduction quoted below — see if you can recognize the signs:
Our political world is awash in spin. Over many decades now, elected officials and their aides have forged a huge arsenal of tools and techniques to shape their messages, their images, and our thinking. … Sometimes our politics seem to be nothing but spin — a dizzying, cacophonous whirl of claims and counterclaims. Each side charges the other with spin while asserting for itself a purchase on the truth. …. Worse, we hear, spin misleads or deceives us. And even if it’s disbelieved or evaluated skeptically, it chokes off the honest and open discourse our democracy needs, rendering our politics vapid, artificial, or bankrupt.
In other news, serial huckster Narayan Rane has quit the Congress and inadvertently provided further confirmation of much that is wrong with politics today: he is leaving the party, Rane said, because it had promised to make him the chief minister, and then reneged. Where he plans to go next is unclear, but presumably it will be to whichever party promises him personal aggrandizement.
In Tamil Nadu, the politics of personality received further validation when Jayalalitha dolls became hot sellers for the ongoing Navaratri season. The ruling dispensation there has already made the late chief minister the AIADMK’s permanent general secretary. Presumably, party affairs will now be determined by seance. (The AIADMK missed a bet, by the way — had they made her the chief minister, they could have won elections in perpetuity).
In yesterday’s edition I had referred to a BJP leader in Aligarh slapping a young girl for being in a relationship with a Muslim man. Turns out the scenario is even more bizarre than I first thought. This report in Republic, which takes the use of ‘representational image’ to a whole new level of ridiculousness, says the couple was having tea at a local restaurant when the BJP leader did her thing; the report then says the man in question was booked for ‘obscenity in a public place’. How do you even?!
Hyderabad is in a ferment about a social media post that reportedly insults Prophet Mohammed. The author is a lady from Gujarat with a colorful history, to put it mildly.
The woman, also known as Usha Dangar, was arrested in March this year, with a country-made pistol in Rajkot.
The Times of India reported that 37-year-old Dangar has a number of cases lodged against her, that include kidnapping, attempt to murder, possession of illegal arms, rioting, firing, and extortion.
The ToI report adds that she began her criminal career after marrying notorious bootlegger Sanjay Rajput in 2008, and continued the crime after her divorce.
After a case in 2012, where she allegedly thrashed the construction labourers, Dangar maintained a low profile for two years. In 2014, she fired five shots at a mobile shop on Raiya Road, and drove away, according to reports.
Elsewhere, in Gurugram, ‘protestors claiming to be Shiv Sena’ shut down meat shops because meat-eating — by anyone — during Navaratri ‘hurts sentiments’. Meanwhile, the Bajrang Dal appears to have come up with its own innovative solution to the unemployment problem: it has created an armed militia of two lakh youth, who will be given the weapon of choice at an official — and suitably ‘religious’ — function on December 6, to mark the 25th anniversary of the demolition of the Babri Masjid.
Vishwa Hindu Parishad’s secretary in charge of `dharam prasaar’ (propagation of faith) in west UP, Rakesh Tyagi, said these “yodhas” would protect Hindu religion. “If anyone tries to demolish a temple, attack the Hindu religion, kills cows, or wage love jihad, these yodhas would deal with them,” Tyagi said.
Earlier this year, a data dive by Rupa Subramanya (who is hardly a pseudo-libtard-whatever) found that cow-related violence is escalating sharply; the administration and police in BJP-ruled states have not only condoned such violence but also provided a protective umbrella to the thugs (as most recently evidenced by the Rajasthan police giving a ‘clean chit‘ to six alleged killers). All that was left was to confer a title — ‘yodha’ — and a religious cover to what is, pure and simple, criminal violence.
Just what we need — gangs of young men roaming around with lethal weapons and primed for mischief. There will be blood, sure enough, and it will be on the hands of those who come up with hate-filled agendas to divide and rule, rather than harness the same youthful energies to solving some of our more pressing problems.
8 comments
Love the WTF template. However, till I read this piece, I didn’t really think the economy was in this much of a doldrum (curious what the etymology of doldrum is).
I used to think that we are being led in a patchy sort of way, all growth/ productivity focus (+ve) which come with the downsides (our yodhas, say). Presume there are some positives which I don’t see enough of in your post. I know this is a WTF format, but for your followers’ sake, please consider this. TM Krishna ina recent post spoke about how polarizing the environment is, so much so that the first reaction (and in many cases, and enduring reaction) is always disbelief/skepticism.
Is it all bad? Shouldn’t we pause or actively look to clear the air to see reality as it is?
I read the TM Krishna piece and chatted with him after. It also made me revisit a book I had read a long time ago: Wilful Blindness, by Margaret Heffernan. Briefly, a dozen people were brought into a room. On a blackboard were three lines of varying length drawn with chalk. On an adjacent whiteboard was one line. To any observer, it was immediately apparent that all four lines were of different lengths.
However, for the experiment, ten of the twelve were told to say that line B on the blackboard was the same length as the line on the whiteboard. So each in turn picked line B, on cue. Then the two subjects who had not been preprogrammed were asked. Both also picked line B.
The experiment was repeated with a different group — this time, the two subjects who had not been prepped were asked first, and both said all lines were different lengths.
The same experiment was tried with different questions, and each time the outcome was the same. Left to ourselves, we pick the common-sense, obvious answer. But when tribal forces come into play, we would rather pick the wrong answer to belong, rather than pick the right answer.
We hear a lot about confirmation bias, and that is certainly something that affects our behaviour and what we perceive as true. But so is this — which is why propaganda, and its relentless amplification through gaming social media, is so dangerous: it plays to these same tribal instincts, to the point where we no longer bother about right and wrong, and are concerned only with being accepted in the chosen tribe.
As to the positives, if they had been there, I’d have included them. But at this time of writing, I honestly cannot find one, and if someone will point me to data-proven positives, I will happily edit the post to include those examples. The reason I am doing this is to be able to step back from the noise, and try to see as clearly as possible just what is going on — not take sides.
Thanks for your authentic response! I will look for +ve news as well, if it’s out there.
Do you have a good balanced recommendation for something I can read about re demon, GST? My understanding is that while they may have certainly impeded growth, the bitter pill had to be taken someday, by some government, and there are material benefits in the medium term. Was this all vote bank politics (focused on RoI as you have indicated elsewhere) or were they good attempts gone awry (probably because of poor design and implementation)?
As an aside, Just coming out of a fabulous concert by TMK.
That is *exactly* the problem — I haven’t been able to find something that fulfills the basic requirement of arguing from facts without taking one side of the debate. If you come across something that seems useful to you, do share.
To the larger question, I am no economist — not even remotely close. As a journalist, I have access to people in that field, from both sides of the spectrum, and from the conversations I have had, the unanimous view seems to be that a CGST is absolutely necessary. Again, almost everyone from that field I talked to pointed out that there was a plan to introduce it as early as 2012-2013 — at which point, ironically, Modi was one of the staunchest opponents.
Almost unanimously, the consensus seems to be that GST will be beneficial in many ways — one of the most important being simplifying and rationalizing the tax structure. Economists and businessmen I spoke to almost unanimously seem to feel that the problem is not with what was done, but that it was done with very little planning, resulting in considerable confusion; some needlessly complicated procedures were tacked on which defeats the purpose; and the required infrastructure wasn’t field-tested ahead of implementation, leading to the site repeatedly crashing, deadlines being missed, all of that (which in turn attract penalties).
The irony is that these are precisely the reasons Modi gave when he opposed GST. See this video: http://bit.ly/2xtXavd
Compounding the problem is the fact that demonetization was an unmitigated disaster. Now this is likely extrapolation, but members of the business community I spoke to felt the govt, under pressure because of demonetization, jumped the gun on GST simply to be able to balance out the negative with a positive, and in the process inflicted further damage on a reeling economy.
To reiterate the key point, though, I am yet to come across someone from the economics/business side who is opposed to the concept of GST — in fact, everyone without exception says we needed it a decade ago, at least. Caveat being: well thought out, well communicated to all stakeholders, well backed by robust infrastructure.
Thanks Prem, for the updates.
It may sound selfish, but I am glad that you are posting more here. I understand the time this takes, and how difficult it is to manage. Do keep writing here. And, if you do decide to make this a paid content, I am okay with it too. This is the only place where I can get a quick round-up of the day in 8 minutes, without having to filter the noise.
Thank you for the kind words. 🙏 I don’t intend to make it paid, ever. While I intend to post regularly, there are likely to be days when I can spare the time – a paid site becomes too much of a responsibility. ☺️
Quoting Dr Swamy is an exercise that is littered with hazards .His past unrideled utterances, mindless and vicious attacks on his bete noires (which keep changing depending on which way the wind is blowing)and his I’m principled somersaults,have severely eroded his credibility. I would rather ask the opinion of a common man on the street- his views could be coloured ,but not tainted -Like Dr Swamy !
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Oh I agree — Swamy’s twists and ideological U-turns provide amusement of the “laugh that you may not weep” kind. I quoted him, though, for a reason: it is easy to dismiss the Raghuram Rajans, Manmohans and sundry economists as being biased. I wanted to keep the attention on the message, rather than on such rhetorical red herrings, hence Swamy.
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