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Comment

Chauvinism and Jingoism

Possibly it will take some time for the opposition to gather strength because the counter-productive nature of this chauvinism will become clearer only after some time when the material and human costs seem too heavy. There is not much discussion about the state of the economy, however, in the media. The reports that have poured in recently tell a story much different from that sold by the Modi government on this subject. Take the case of economic growth first, although rate of economic growth can never be a major indicator of a country's welfare. While the government has been bragging about a high rate of growth, economists previously involved in policy-making in India, e.g. Arvind Subramanian and Rathin Roy's findings suggest that the real growth rate is much lower than what the official statistics claim. If the economy slides into a slow growth, middle-income trap, there is no magic wand in the hands of the Modi government to break out of it. It is doubtful if the Modi government really wants to do so although it declares its ability to make India a 5 trillion-dollar economy within a period of five years. Even such a trap may not be altogether undesirable if within its limits, inequality can be reduced, primary and secondary education for the overwhelming majority of people can be ensured, every person can have access to basic health care and the huge unemployment problem can be tackled adequately and swiftly. In other words, a significant rise in the Human Development Index may be a good corrective. But on none of the components of HDI, the government has attained any measure of success that can be boasted of. Recent reports on the real implementation of the slogan 'sab ka sath sab ka vikas' is disquieting, because over the last five years, there has been increasing concentration of economic wealth and power, and this to an extent that is mind-boggling, but the government is, to all appearances, deliberately unmindful of it. It is powerless to punish those corporate houses that are guilty of non-repayment of huge amounts of bank loans. Lack of domestic demand has hit the automobile sector very badly. According to the director-general of SIAM (Society of Indian Automobile Manufacturers), already 3.35 lakhs of jobs have been lost. This is only one manifestation of the crisis. The structural retrogression of the economy, as manifested in the earlier disproportionate growth in the production of non-basic goods, is now displaying its inherent fragility. Larger maladies are there. For example, although the share of the primary sector in the GDP has fallen from 21 percent to 13 percent over the last 15 years, there has remained a large working force dependent on agriculture, and this huge army of surplus labour—one may call it disguised unemployment—cannot be given gainful employment in the industrial and service sector, given the type of industrial growth followed in the country. On the other hand, farmers, faced with unremunerative prices, live in utter distress and often are forced to suicide. Those who have migrated to the urban areas for a better livelihood and are working in the informal sector are employed irregularly and at much lower wages, simply because demand lags behind supply.

The export front has been showing a dismal picture. Current account deficits have been growing for a long time. There is little likelihood that this growing deficit can be made up by the inflow of foreign portfolio investment. Foreign portfolio investment is always notoriously volatile and even at the very thought of a crisis, it may leave the country. Right now, such investments are leaving the country. What will the government do? It has not been able to reap the advantages of the US-China trade war. Will it now resort to largescale borrowing from institutions like the IMF and the World Bank and accept the stringent conditions laid down by these institutions so as to meet its balance of payments crisis? Then the country will be caught in a 'debt trap'. Lack of concern for all these ills can perhaps be accounted for by the fact that the ruling party, backed by huge donations from moneyed men, has tasted electoral success by playing on chauvinism. But it is a delusion to think that chauvinism may appear before the people as the panacea for all diseases. Sooner or later, the economic crisis may turn into a political crisis when no amount of war hysteria or corporate-backed stream of lies can save the ruling party. That day is probably not far.

16.08.2019

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Frontier
Vol. 52, No. 9, Sep 1 - 7, 2019