Obsession with growth rate is the dominant ideology of
mainstream economics, as well as of demagogues habituated in befuddling the people. So India, despite her dehumanizing inequality across the population in terms of income, wealth and other entitlements as well as its abysmal position regarding the Human Development Index, is continuously projected by successive governments as the fastest growing economy in the world although this growth has been achieved at the expense of the capabilities of the broad masses. But this pride has been somewhat hurt owing to the adverse impact of the surgical strike of demonetisation. No amount of statistical jugglary can hide the fact that the informal sector has been badly hurt and numerous persons have been rendered jobless, not to speak of the horrible harassments of the ordinary money-using people, including the salaried classes. According to Professor Pranab Bardhan's estimate, the loss of GDP is about Rs 2.5 trillions, which is mostly the loss incurred by the poorer sections working in the informal sector. Small-scale entrepreneurs and farmers have also suffered along with the labourers.
It was imperative for Narendra Modi and Arun Jaitley to take into consideration this stark fact in view of the coming assembly polls in several states because their project of communal polarisation has gone haywire. Hence they have to give some sops if only for the sake of votes. They, along with their apologists called economists, had been clamouring for the abolition of the NREGP step by step, calling it an unproductive burden on the economy. But curiously enough, allocation on this score has been enhanced by Rs 95 billions in this year's budget. It is not known what economists like Jagdish Bhagwati or Asok Sanjay Guha have to say on this U-turn. If the increase in allocation for the NRGEP is unexpected, the steps towards a cashless economy is not. The drive for further digitalisation by imposing a ban on cash transactions over 3 lakhs is patently meant to serve the corporates who would extract their commissions as 'providers' of digital service.
It is noteworthy that there is no reference to the agrarian crisis engulfing the economy. About the massive doses of agricultural credit, Rs 19 trillions, which the Finance Minister claimed to be a 'record' amidst huge applauses from the treasury bench, it can be legitimately said that according to RBI data, total credit deployed in agriculture amounted to Rs 9.1 trillions till November 25, 2016. Hence this may well be close to Rs 10 trillions or even more at the end of this fiscal year. More importantly, who stand to gain by this credit? Small farmers or agri-business companies? According to a leading agricultural economist, eighty to ninety percent of the Rs 10 trillions will eventually 'go to the corporates in the name of farmers'. The economist further writes, "I have been asking the finance ministry to categorise the farm loans under two different categories so as to remove the illusion as if the entire amount is meant for the farmers, but to no effect". (The Telegraph, 2 February) In passing, it may be mentioned that according to the National Crime Records Bureau's estimate, there were 12602 farm suicides in 2015, more than three percent from the previous year.
Following Jaitley, the budget has been called by some a rebellion against 'corruption'. What the forms of corruption in this country are is not however clear. The government is supposed to be in possession of the list of persons having large amounts of black money kept in foreign banks. It is clear that Narendra Modi or Arun Jaitley are not at all interested in punishing them or in bringing back this money; otherwise, some suggestions in this regard would have been there in the budget. More-over there is not even the slightest hint as to how the unrepaid bank loans should be recovered and whether and how how, if at all, the big defaulters, namely the Reliance Group, the Vedanta Group, the Adani Group, the Essar Group etc would be punished. The not-so-poor middle classes have got some income-tax reliefs and they, true to their opportunistic tradition, may bless Modi and Jaitley, but the regime of loot and plunder is to remain untouched. The latest report is that the Bharatiya Janata Party (BJP) poll managers are sceptical of the ability of the budget to deliver the goods in the coming state assembly polls. So the budget may not be a success, even politically.
Vol. 49, No.31, Feb 5 - 11, 2017