Crash is Inevitable

Arun Jaitley is a very good  lawyer. Only a very tew people would disagree with that—Subramanian Swamy and Ram Jethmalani, for instance. But their opinion does not count for much because it is evidently coloured by personal animosity.

However, what is pertinent is that very few people, even in the Bharatiya Janata Party (BJP) are heard saying that Arun Jaitley is a very good economist. The truth is that he is not. But the reality is that he is the country's Finance Minister, and has been holding that crucial post for the past three years.

Normally, that should not have been a problem. Very few Ministers have special knowledge or expertise of the portfolios they are entrusted with.

For instance, is Nirmala Sitharaman well-versed in the intricacies of the defence production, defence supplies, military research, geo-strategic analysis, weapons technology, operations and maintenance, co-ordination between Army, Navy, Air Force, Territorial Army, auxiliary air force, hydrographic surveys, cantonment administration, etc., etc.?

The answer is no. Nor should it be expected of her. That's what the bureaucrats are there for.

The same is the case with Suresh Prabhu in his earlier job as Railway Minister—he didn't have a clue about why derailments occur so often, what railway safety is all about and how money is earned and spent on the Government on Wheels. That's what the experts on the Railway Board are there for. Nor does Prabhu know much about Commerce and Industry—there just too much to know.

Even those who wondered why Alphons Kannanthanam was given charge of Tourism and Electronic and Information Technology instead of being made Minister for Urban Development were barking up the wrong tree—giving someone a portfolio in his area of expertise is not always a good idea because it interferes with the smooth working of the IAS officers in the Ministry.

Agriculture Minister Radha Mohan Singh, for instance, was not shifted during the last Cabinet reshuffle despite all the media speculation that was certain to be axed for failing to handle the massive country-wide farmers' agitation. The reason? There would have been no point.

Just as a Railway Minister is not really responsible for a train accident or a Civil Aviation Minister cannot be held culpable for a plane crash, so also an Agriculture Minister cannot actually legislate on activities of cultivation of agriculture produce.

Agriculture is a State subject under the Constitution although it is also on the Concurrent List. Even Central schemes are delivered only by the respective State Government's agriculture agency or department. The centre can only assist financially, that too indirectly.

It is only on paper that the Agriculture Minister has an impressive list of powers, responsibilities and functions—"formulation and implementation of national policies and programmes aimed at achieving rapid agricultural growth through optimum utilization of the country's land, water, soil and plant resources".

Krishi Bhavan in New Delhi is supposed to "undertake all possible measures to ensure timely and adequate supply of inputs and services such as fertilisers, seeds, pesticides, agricultural implements and also provides agricultural credit, crops insurance and ensures remunerative returns to the farmer for his agricultural produce". In practice, the farmer is angry at not getting a fair price for his produce, there's very little that Radha Mohan Singh can do about it—delivery is all in the hands of the States concerned.

Having said all this, it’s different in the case of the Union Finance Minister. Arun Jaitley cannot escape culpability for the disastrous state of the economy. He is the one who controls the purse strings. He is the one who presents budget every year, allots money and announces schemes.

Although the rumour is that he was as astonished as the common man in the street by the surprise announcement about Demonetisation by the prime Minister on that fateful November night, he is responsible for all the consequences and repercussions. The manner in which he argued the case in favour of note-bandi for weeks and months on end is a tribute to his amazing gift of the gab, his fertile imagination and lawyerly skills. It is also a testimony to his unstinted loyalty towards his leader, Narendra Modi.

But at the end of the end, after all the contrived arguments and concocted justifications, not even a single stated objective of Demonetisation has been achieved—neither black money, nor counterfeit currency, nor cross border terrorism, nor cashless economy, nor anything at all. All that has happened is that GDP is down and the informal economy is in ruins.

As Finance Minister, Arun Jaitley is responsible. In his defence, the only plea that can be taken is that he is not an economist and therefore could not have foreseen the disastrous impact of snatching the cash out of every Indian citizen’s hands.

Just as he could not have been expected to foresee that GST implementation would cause so much pain and lead to so much chaos and confusion. He is not an economist!

The irony is that even the Prime Minister who is otherwise so gifted in so many ways and wields so much decision-making powers, is by no means an economics man.

All that the country knows is that recently, the two most powerful men in the country held a deep discussion on the deepening economic crisis facing the country and neither of them has a clue about how the economy works.

Nobody takes Subnimanian Swamy seriously, as perhaps nobody should. But in an interview he bluntly stated that "the economy is in a tail-spin". He pointed to all the things that have gone wrong—growth rate falling, exports and imports both declining, industrial production stagnant, investment sluggish, unemployment soaring.

Dr Swamy's motive for such candid comments may well be to show his bete noir Arun Jaitley in a bad light. But the data he cites is there for all to see and verify.

Having sent the economy into a tail-spin, the Finance Minister and the Prime Minister are now searching for ways to avert the inevitable crash. And neither of them is an economist.

The Opposition observed the first anniversary of demonetisation as a 'black day' (November 8). They described it as an organised loot and legalised plunder. It was a reckless step. Twin blow of demonetisation and GST was a complete disaster for the country's economy.



Vol. 50, No.20, Nov 19 - 25, 2017