A Country Belied
We are living in trying times. The jobs created over the last few months are now going away, and fast. Lifelong savings have been depleted to an extent that Indians are changing their eating habits. The economy is now being cooked by people who don’t understand even basic ingredients. Yet, we claim all is well…
Aviation disasters typically happen when an aircraft takes off or lands. A flying tragedy does not characteristically occur in mid-flight. Against this backdrop, we have to admit that India has been hit by the proverbial non-sequitur, for our man-made disaster is happening mid-flight, visibly so. Any avionics virtue or sinew that we stretch or flex cannot condone the terrible mid-air disaster staring us in the face. Why do I say that? Because yet again, my country faces increased joblessness (even amongst the educated, once-employed), has a failing economy that is at its worst in 40 years, while our daily-wagers are flailing like nine-pins and crores of people are once again falling beneath the poverty line.
Yet, we wax eloquent and shout from the rooftops—all is well. We are well and truly headed towards becoming a US $5-trillion economy. Really?! When even standout economists (themselves top leaders and Members of Parliament in the ruling party) point out that this achievement would require an annualized GDP (Gross Domestic Product) growth rate of 14 per cent or more, starting from Financial Year 2020-21, all the way through FY 2025? And what is our growth rate in the first financial year in this five-year enigma as we attempt to achieve an incredible target? Well, it was a negative 7.3 per cent. A good start, yeah?
You like numbers?
Here you go… The consolidated GDP growth in FY 2020-21 is down to 1.6 per cent, a total fall of 7.3 per cent over the previous year. This is the biggest crash in independent India, the lowest GDP numbers in 40 years. Yet, we are being traversed only towards the achievement – that the annual drop of 7.3 per cent is lower than the worst-case projections of 9-10 per cent. We have won, the authorities claim. Sure. For I recall that our powers-that-be, through the third and fourth quarters of the last financial year, predicting a 'V-shaped' recovery. Some altruists are calling it a 'K-shaped' recovery – here, the rich get richer, and the poor, yes, poorer. Veer Savarkar anyone? Remember his philosophy?
More numbers, you say? Sure, I can dish them out. The GDP growth figure in FY 2016-17 was 8.2 per cent, while that for FY 2017-18 was 7.04 per cent, FY 2018-19 was 6.15 per cent, FY 2019-20 was 4.2 per cent and FY 2020-21 was a negative 7.3 per cent. You want more numbers? Well, the default in bank loans by top Corporate and businesses in India is now four times as compared to the levels seen in FY 2013-14. Mind you, these numbers are all released by the Reserve Bank of India (RBI) just a week ago.
So how did we get it so very wrong, economically? Well, perhaps because we planned for it.
So what's the truth?
What Union Finance Minister Nirmala Sitharaman now says to explain the dropping economic numbers has to be admitted—that while drafting the Union Budget for FY 2021-22, the Government clearly could not take into account the emergence of a Second Wave of the Coronavirus pandemic. She is right, since no prediction and planning, economic or otherwise, could have been made on the basis of unknown future events. I admit the same.
However, a course correction has to be made now to rein in the horrific economic news. This has precedence – last year, when the pandemic hit India, the same Union Finance Minister and her deputy Anurag Thakur announced a daily dosage of fiscal stimulus packages for needy sections of society to bolster their daily lives, as also our economy. Today, similar mini-Budgets are the need of the hour.
Let's do a grim remembrance of the numbers. Of the 2.8 crore infected so far, Rs 2.56 crore have recovered. Nice. But that also means that 24 lakh Indians have fallen prey to this pandemic, and these are officially-recognized figures. What of those who breath their last in villages and smaller towns? Just on last Thursday, scores of districts in Himachal Pradesh have downed their shutters on people entering their bucolic areas, citing a 'human crisis'. Village 'pradhans' have written to the local SDMS (Special District Magistrates), asking them to enforce a lockdown. "If you don't, we will," they say.
Loss of jobs, again
It had to happen, even though our superhero leaders kept rejecting this devious and politically-motivated aneurism. Well, it is here, yet again. Get a load of this. Around 90 per cent of Indian families have seen a drop in income over the last one year. The unemployment rate has risen from 6.5 per cent in March 2021 to 7.97 per cent in April 2021, and we are a country of 138 crore people.
It gets worse, as per CMIE – an additional 1 crore educated employed-plus have lost their jobs in the January-April 2021 period. What could be more worrisome, or worse? Perhaps the fact that 11 lakh daily wagers lost their jobs in April alone – in the same period, 75 lakh educated employed also lost their jobs, which implies that the Second Wave has been more devastating than anything before.
For those who like statistics, Governments of all hues over the last many decades worked well and managed to raise 27 crore people above the poverty line. Imagine their new-found elation at being able to have gas cylinders and refrigerators and coolers in their house, celebrating this new morrow. Today, in the last quarter alone, 23 crores of those 27 crore have slipped below the poverty line again. Does anyone care?
Large Corporates do
And they had better, even though I am no capacitor, anticipator or soothsayer. Corporates large and small, Indian or MNCs, depend entirely on local demand to function. With jobs gone, spending power at a low dynamic and consumer confidence at an all-time low, the game is being lost for large organizations. And thus we have Babaji's companies going head-to-head with the biggest international brands, even as he and his ilk yak and snigger their way to more riches, seemingly unworried about repercussions or ramifications.
'Kisi ka baap hamein chhoo nahin sakta (no one's father can touch us in any manner)," these Babas claim, and crores and scores of subservient Indian believers line up to buy their totally deviant 'gharelu nuskhas' (home-made remedies). What do the authorities do? Well, our very own Union Health Minister and Union Surface Transport Minister both stand by him, holding up the vials that shall rid us of this dreaded virus. Less than a day later, the WHO (Word Health Organization) totally distances itself from this medicine. The authorities strike a dumb pose, as they have done for over a year and the pandemic.
So where are we headed? Well, if the Gods be with us, to a better place, one with greater prudence and less after-the-event petulance. For that is all that we have been exhibiting now. This is said – for till recently, we were the biggest emerging superpower in the world. Today, we have become a laughing stock.
Corporates speaking out
India's Corporates, stuttering for years, are finally speaking out. They clearly have to, because their existence and future has been muddled to the extent that they are worried sick. Leading industrialist and President of the Confederation of Indian Industry (CII), Uday Kotak, announced that a fiscal stimulus package is a must to revive the Indian economy, especially the MSME sector (which means an infusion of Rs 1.5-2 lakh crore).
PHDCCI's (PHD Chamber of Commerce and Industry) Sanjay Aggrawal said this past week that India's fiscal initiatives have been subdued and conservative, at best, especially when compared to countries in the West. "But this new wave has been ferocious and a terrible economic roadblock," he said. "The Government has to be aggressive enough to announce a stimulus package. The Budget was in the right direction, but that was in keeping with the confidence built up, that the pandemic was receding. The Second Wave has shaken up everything from the business perspective," he surmised.
Without mincing words, what he means is that demand is crashing and industry is in trouble. Labor shortages are terrible and where available, everyone is worried whether co-workers have been vaccinated. Raw material costs have surged over the last six months by 50-100 per cent – be it for steel, cement, plastics, rubber, aluminum or other metals.
Where are we headed, then? Nowhere good, it seems, by a mere look at the table above. Things are falling apart, and how.
The authorities seem to have given up and are playing the blame game. Hence, it is now left entirely to you and me to rise to the occasion and survive, before we may thrive and rejoice again. Sad, but true.
The writer is a communications consultant and a clinical analyst. email@example.com. Views expressed are personal