25 Years Later

Reformists are yet to anno-unce their timetable to celebrate 25 years of reforms. It seems they are not as enthusiastic as they were 25 years ago. Perhaps there is not much to cheer about yet they would like to sing the much publicised swan-song of reforms at every opportune moment. It’s the ready staple for the media. Unlike the ‘Congress cowards’ these ‘Saffron soldiers’ don’t hesitate to slap sedition charges under flimsy grounds. Writers, cartoonists, human rights activists—all are in danger of facing sedition, if they raise their voice against the adverse impact of reforms on society.

India’s economic reforms actually commenced in July 1991. All industrial licensing was abolished. The private sector was allowed in all spheres of industries, including arms and ammunition, atomic energy and rail transport. The public sector was disinvested and restructured with more autonomy. Sick units were closed, and government stakes reduced to 26% or less. Foreign Direct Investment (FDI) and Foreign Technology for modernisation were given free entry. Monopoly and Restricted Trade Practices (MRTP) clearance was abolished for large industries, and approvals for industrial location were liberalised. The Hindu rate of growth of 2% (1991) rose to 7% (2015). Foreign exchange reserves were worth $336 billion (May 2015), compared to $1.2 billion (June 1991). Fiscal deficits were 8.4% of GDP (1991) and now fallen to 4% (2015). Inflation ranged over 12% (1991) and is now about 5% (2015). The rupee was devalued by 7% in July 1991, and again by 11% within the first three days. The poverty rate is 20% (2016), declined from 50% (1991). About 300 million people are said to have escaped poverty, following the economic reforms. This is the tall claim by the persons in power though the ground reality tells a different story. Education, health, labour, employment, land and agriculture continue to stagnate. Agriculture generates only 16% of GDP, even though it still employs 55% of India’s population. Nearly 660 million people are living on an average annual per capita income of about Rs 30,000, which is a meagre Rs 2500 per month, far below the national average. India’s Human Development Index is among the lowest in the world, alongwith indicators like educational standards, health and delivery of public services.

For all practical purposes employment scenario is too horrifying to be ignored. As per report by Delhi based Civil Society Group Prahar, India loses 550 jobs every day, thanks to reforms. There is no new job but what worries wage earners most is the rapid decline in existing job market. As per figures released by Labour Bureau earlier this year India succeeded in creating only 1.35 lack jobs in 2015 in comparison to 4.19 lakh in 2013 and 9 lakh in 2011. The decline of agriculture began with the advent of reforms in the 1990s. And it is the prime reason for the high rise in unemployment. Agriculture used to contribute more than 50 percent of employment, followed by small and medium enterprises sector with 40 percent share of employment even three decades ago. Even in 1994, 60 percent of labour force used to toil in agriculture according to a World Bank hand-out. They are worst affected by reforms and everywhere people now find bill boards of ‘No Job!’ The so-called organised sector contributes a miniscale, less than one percent of employment. In truth India has only about 30 million jobs in the organised sector and nearly 440 million in unorganised sector. It is now clear that Modi’s ‘Make in India’ is unlikely to deliver because multinationals have their own rules to follow. Their commitment to invest $225 million for the next five years may at best create six million jobs and that too—mostly, in high skill category. All that glitters is not gold. The official left doesn’t know how to combat this ‘No Job’ situation. And for the far left the problem doesn’t exist. But a swelling army of the unemployed youth is not going to strengthen the reserve army of guerillas. After all people in this part of the globe even during famine times didn’t loot food grains from shops. They have enormous power of tolerance.

Vol. 49, No.18, Nov 6 - 12, 2016