Gandhi’s promise about rational economic decisions, while sounding good, is not backed with action.
Rahul Gandhi talks often about economic policy. Busy these days attacking the government, especially Prime Minister Narendra Modi, Gandhi has promised to simplify the Goods and Services Tax (GST) and take “rational economic decisions” to attract foreign investment if he wins the general election.
Not a day passes when Gandhi and his party colleagues don’t slam the Modi regime on some issue or the other—turmoil in the Central Bureau of Investigation, powers to 10 agencies to snoop, hooliganism of saffron cowboys, the Rafale deal, the economy. In the domain of the economy particularly, there is little more than criticism.
He talked about the economy at a press conference in Dubai: “We will take some rational economic decisions. We will restructure the GST and we will embrace investments from the Middle East and other parts of the world. We are the party of [economic] liberalisation, we are the party that gave the fastest economic growth in the first decade of the century, and will do that again.”
So far, so good, but does it go any farther? Doesn’t look like. True, Arun Jaitley is Finance Minister but does the Grand Old Party have a better alternative? P. Chidambaram, the tainted leader? Jairam Ramesh, who is more interested in placating Luddites and professional revolutionaries than doing anything meaningful? The do-nothing A.K. Antony?
The Modi government has not been able to resolve the issue of non-performing assets or NPAs, but does the Congress offer the right and solitary solution, that is, privatisation of public sector banks? A big “no”. The party has indeed made it clear that it is opposed to privatisation. At its 84th Plenary, the Congress’ resolution on the economic situation said, “The Indian National Congress emphasises the need for a strong public sector that has served multiple socio-economic objectives. State ownership of businesses in certain critical sectors such as defence production, mass transportation, natural resources, and financial services is both needed and justified where maximisation of value to shareholders may not be the sole measure of success.”
At present, there is scarcely any employment generation. In fact, jobs are vanishing. As many as 11 million jobs got lost in the last calendar year, CMIE, a leading business information company, recently reported. “India’s unemployment rate shot up to 7.4 per cent in December 2018. This is the highest unemployment rate we’ve seen in 15 months. The rate has increased sharply from the 6.6 per cent clocked in November.”
Again, a major portion of the real solution would be labour reforms, something that every party is fearful of. Would the GOP bite the bullet? Would Rahul Gandhi agree to do what suit-bootwallahs correctly favour? Economic advisers of all governments have also advocated the opening up the labour market, but no politician has shown courage to do that.
Agriculture is another sector that needs massive and urgent reforms. It is generally acknowledged by economists and policymakers that farm loan waivers are not even an adequate palliative, as they touch only a fraction of the farming community. Quite apart from being fiscally irresponsible and economically ruinous, the waivers vitiate the credit culture and discourage banks to lend in the countryside. It is also true that it was the Bharatiya Janata Party, in a bid to win Uttar Pradesh Assembly elections, began the recent spate of loan remission, which cost almost Rs 2 lakh crore.
But does Rahul Gandhi intend to introduce reforms in the sector? His actions don’t convey the message; in fact, he seems to outdo the BJP in populism. Soon after winning the Assembly elections in Rajasthan, Madhya Pradesh, and Chhattisgarh, his party went for farm loan waivers.
He also boasted about them. “It’s done! Rajasthan, Madhya Pradesh & Chhattisgarh have waived farm loans. We asked for 10 days. We did it in 2,” he said in a tweet. Further, he challenged Modi to do the same in other states, thundering that he would not let the Prime Minister to “sleep or rest” till all farm loans are foregone.
Clearly, Gandhi is fighting fire with fire, rhetoric with rhetoric and, worse, bad policies with bad policies. He doesn’t believe in fighting populism with reason. Therefore, Gandhi’s promise about rational economic decisions, while sounding good, is not backed with action. Rationalism should not be confined to announcements; it should reflect in conduct. That, unfortunately, is not happening in his case. Or any other politician’s case, for that matter.