New Delhi: We in India have not yet obtained control of the coronavirus and the pandemic it has caused, and until we do, we cannot look at the future with any certainty or confidence. Today, because of Delhi there is a big question mark on whether we may be compelled to go into a lockdown again, and impose suffocating restrictions on the movement of goods, services and migrant labour.
In Delhi, which is also the capital of the nation, presently we are suffering with 6,000 to 7,000 cases a day and galloping daily. Delhi’s worsening pandemic is due to the Chief Minister of Delhi, Arvind Kejriwal—for his reckless disregard of his primary duties. The Delhi population thus has no hope unless first the Lieutenant Governor, with concurrence of the Rashtrapati, suspends the Delhi government till the pandemic is brought under control.
As a Member of Parliament’s Standing Committee for Health and Family Welfare, I have received enough documentation to say that except for Delhi, elsewhere in India we have managed the coronavirus pandemic better than most countries, despite a huge population living in congested areas. But that is not good enough if we see the grievous collateral damage done to the economy.
The real worry is the post-coronavirus state of the economy, because the macroeconomic policy inadequacy and ill-prepared adventurism, such as demonetisation and GST, had already caused the GDP growth rate to get worse annually from 2015-16.
In the last quarter of 2019-20, the GDP growth had slumped to a post 1947 low of 3.1% on an annual basis. During the 17-year Prime Ministerial tenure of Jawaharlal Nehru and 16-year tenure of Indira Gandhi, the achieved annual growth rate of 3.5% was ridiculed as the “Hindu rate of growth”. Today, a growth rate of GDP even worse than 3.5% would be a painful shame for us to have it referred as “growth rate of Hindutvadis”.
According to my calculations, in the best case situation, on 31 March 2021, the FY21 GDP at constant prices will be 15% lower than the FY20 GDP. Unless there is a significant change in economic policy then, we should expect a repeat in FY22 performance—linearly projected, which means a declining growth rate over the four quarters of FY21 as in FY20.
That means the FY22 GDP at constant prices will be minus 12% lower than the FY21 GDP. If still there is no change in economic policy in terms of objectives, priorities, strategy, and resource mobilization in FY22, then by the next Lok Sabha general elections, at the end of FY23, we shall still be minus 10% compared to FY22.
That will be a recipe for electoral disaster for the BJP. Who comes in place of BJP, who can predict? Judging by 1973-74, and the emergence of a long retired freedom fighter from politics viz., Jayaprakash Narayan, it could usher in a new dispensation as the Janata Party was in 1977.
We must, therefore, face the reality that unless we make a major overhaul of the economic policy that we have followed since 2014, and thus with a new economic policy we get results to uplift the morale of the people, there could be a disastrous upheaval.
The writing on the wall is the recent Bihar Assembly election results where the NDA faced no organised opposition but a young lad called Tejashwi Yadav, with his father veteran Lalu Yadav in prison, who had nothing to offer except a simple slogan of providing employment, ended up as the single largest party in the Bihar Assembly and nearly toppled as David the Goliath called NDA.
The “Vikas” call by BJP was taken off from focus in the 2019 elections and was replaced subsequently by three attractive Hindutva agenda items—for the restoration of the 500 years ago demolished Ram temple in Ayodhya [through a Supreme Court judgement], the promise of abolition of Article 370 of the Constitution, and constitutional justice by granting citizenship to the 31,000 hapless stateless Hindus and others who had been eking out an existence in refugee camps in India after fleeing religious persecution in Pakistan, and who had been abandoned by a series of governments since 1947.
While I always believed, and still believe, that combating caste and linguistic fragmentation of the huge Hindu vote in India, by a unifying concept of Hindutva [but not by demonizing others] is more persuasive in elections than good economic performance [as demonstrated by the 1996 general elections defeat of the Narasimha Rao-led Congress], nevertheless while good economic progress does not trump Hindutva for electoral success, the reverse is also true: that a disastrous economic policy can swamp out the positive power of Hindutva in the general elections.
That is, a good or mediocre economic performance is a necessary but not a sufficient condition for electoral victory, but with Hindutva it is; but a bad hurtful economic performance is a sufficient condition for defeat in an election despite Hindutva slogan, if any. The BJP concentrated on vikas in the 2014 Lok Sabha elections, but was silent on it in 2019 when reconstructing Ram Mandir and Hindutva dominated the election narrative. Economy was not in a disastrous situation just yet then.
The Prime Minister declared after the electoral victory a target of achieving $5 trillion GDP by 2024, when in fact it meant doubling the GDP of $2.5 million in five years. No one from the Finance Ministry or NITI Aayog told him that this would require a 14.4% per year growth rate for five years.
There is nothing cynical in this thinking that for BJP a genuine adherence to Hindutva is necessary for vote consolidation. Hindutva is a positive ideology, to culturally undo the past divisive mischief of the British imperialists [e.g., by the bogus Aryan Dravidian theory and the “India has never been one nation” rubbish] and fossilization of the Varna system during the massacres of Islamic invasions and its rule. Hindutva instead is a grand perspective for national renaissance. Sri Aurobindo and Swami Vivekananda espoused this in their own words.
Today the reverse truth is manifest, that is, Bihar has shown that a lack of adequate economic progress as measured by unemployment has trumped Hindutva as the election winning plank. From 1989, BJP has been winning locally on issues of Hindutva. In 1998, it enabled BJP to cobble up an alliance as the dominant partner and form a government with a majority. The military victory in Kargil gave BJP another chance. But A.B. Vajpayee soon after began espousing the “India Shining” slogan, and as Ashok Singhal, the giant Hindutva leader told me later in 2004, Vajpayee actually opposed the proposal of making Ram Temple an election issue for the NDA. The end result of ignoring Hindutva issues for secular issues, sloganised as “India Shining”, turned off the enthusiasm of the cadre and the rising linear trend of BJP’s electoral success at the hustings was reversed. Vajpayee met Narasimha Rao’s fate in the general elections of 2004. “India Shining” was not sufficient for victory.
But if the last five years’ economic decline [documented in my recent book Reset published by Rupa, September 2019], for whatever reason, continues then as with Vajpayee’s “India Shining”, and despite mainstream media compliance, the Atmanirbharta slogan will be a non-starter for future elections. Nowhere has Atmanirbharta has been debated. Nor applied. Recently Defence Ministry wanted winter clothing and tents for our jawans in Ladakh. These were entirely imported from US.
“Atmanirbhar Bharat” is not happening for the first time. Gandhi used it as a weapon against buying British goods. In 1969, at the request of Jana Sangh leaders, Nanaji Deshmukh, and Jaganath Rao Joshi, I wrote a book titled Swadeshi Plan. I had argued against reliance on funds from foreign government for development. In 1972, a young 22-year-old Narendra Modi as General Secretary of the ABVP arranged for me to speak on Swadeshi Plan at the National Convention of the ABVP in Ahmedabad, Gujarat. So irritated Indira Gandhi had become of my writings on Swadeshi Plan, that in the 1970 Budget Session in Lok Sabha she held up my book and quoted some passages from it, especially about how with self reliance [atmanirbharta], India’s GDP could grow at 10% per year, and also produce nuclear weapons. She denounced me as “Santa Claus” with dangerous ideas because my Swadeshi concept was against the borrowed Soviet planning, which required squeezing agriculture for funds and financing heavy industries like Bhilai steel plant.
Mrs Gandhi then ensured in 1972 that I was sacked from a full professorship that I held in the Indian Institute of Technology, Delhi from a very young age of 29 years, and blocked my appointment in any academic institution in the country in the expectation that I would return to Harvard and be rid of. Instead I joined the Jana Sangh and became MP in 1974, and a thorn in her side in the Emergency.
The 2020 Bihar Assembly elections have conclusively proved that an amorphous Atmanirbharta does not have much traction with the electorate. Instead, what a coronavirus afflicted India seeks are explicit but credible goals to launch even novices such as Tejashwi Yadav to become RJD’s party leader in the Assembly with the largest number of MLAs of a single party. Hence, dealing explicitly with the coronavirus pandemic’s economic fallout, we must state our economic priority without sloganeering on “green shoots”.
The NDA majority in the Bihar Assembly is razor thin. Already within a day after swearing in of ministers, we saw a casualty: a minister had to resign because he was afflicted by corruption issues!
As Omar Khayyam wrote in a poem: “The moving finger writes, and having writ moves on.” Bihar Assembly poll result is that moving finger.
After India’s economy collapsed in the first quarter of 2020-21[FY21] following the nationwide lockdown imposed to curb the Covid-19 pandemic, some in Ministry of Finance now are suggesting that things are improving in the third quarter of FY21. But even if for argument’s sake it is so, is this a sustainable recovery under way, or just a release of pent-up demand combined with India’s festive-season spending?
Even the near unanimous view outside the government is that the FY21 GDP will decline by at least 9% for the year 2020-21, compared to an already declining growth rate of GDP during all four quarters of FY20 end, with a poor growth rate of 3% in the [pre-Covid 19 pandemic] fourth quarter of FY20.
Our lockdowns were amongst the most stringent in the world, as we not only stopped most movement of people, but also of all logistical movement. I think we were probably unique in the world in stopping logistics of the movement of goods. And then, we also stopped most manufacturing, with the exception of essential supplies. It actually led to a huge disruption in April-June first quarter of FY21. First quarter number of almost -24% in the GDP is matched by a further decline of at least -10%. Compared to FY20, the FY21 GDP growth rate is estimated at -12%, if there is no relapse in the coronavirus pandemic, as is happening in Delhi NCT.
Economists say a continued slide in the industrial GDP will make it tough for India to push up its economic growth and catch up with China or fast-growing peers like Bangladesh and Vietnam.
Hence, it time for the Government to take a reality check on the economic development especially since 2016, and change policies where necessary so that by 2024 we can win again.
Dr Subramanian Swamy is an MP nominated by the President for his eminence as an economist. He is a former Union Cabinet Minister for Commerce and Law & Justice.