As China’s annual economic growth hovers around seven per cent, the country’s communist leaders are justifying it as the new normal. They argue that the slowdown has given them the much-needed respite from the frenetic growth rate of 10 per cent and more, of the last three decades. Japan, which is recovering from zero level growth, can take comfort that things are improving in the country. The sub-three per cent growth rate in the United States is good news because figures are falling. India, on the other hand, cannot be satisfied with the projected 7.3 per cent growth in 2015, which is the same as it was in 2014. The growth rate is expected to go up to 7.5 per cent in 2016. In the Indian context, this is sub-optimal growth, and the growth rates need to go up much more just to hold on to the present position. 

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There is no point blaming the government for inaction. The problems confronting the government are inherent in the present economic situation. The prices of commodities, including of oil and metals, are in a slump because of slackening demand. This is a global phenomenon. India’s financial flows have slowed down as they always do when the world economy slips into a recession. The Foreign Direct Investment (FDI) in India is not anything to write home about. Indian exports and imports have been falling for 11 months in a row now, and turning the tide is difficult as long as the global economy continues to stutter. The figures of industrial production are not encouraging either. There is not enough domestic demand to boost industrial activity. Bad monsoon has cast a shadow on agricultural production, pushing up food and vegetable prices.

It is obvious the government, which is looking for alibis, has found one in the stalling of the much vaunted Goods and Services Tax (GST) Bill in the Rajya Sabha, with the main opposition party, the Congress, unwilling to cooperate in passing the legislation. Paradoxically, the Congress, in the past, had actually rooted for the GST. It was then finance minister P Chidambaram who had spearheaded the bill during the UPA government’s tenure.

The BJP, then the main opposition party, had refused to play along. Whatever be the political dribbling over GST, its implementation would not have made any difference to the economy though it would have certainly improved tax collection. It would be a populist and misleading argument to link GST to economic growth as such; as would be projecting economic reforms like allowing more FDI into more sectors as key to boosting a limping economy. The challenges are linked to the state of the global economy, which at the moment is sluggish, and its condition has little to do with either tax administration or policy interventions.

Political and economic analysts are doling out plenty of advice as to what the government should do to improve its political image, and to get the economy going. Governments do not usually heed such public exhortations. They follow their own blinkered path. It is therefore quite unlikely that the Modi government would pick up advice from the public sphere. It will make its own decisions.

In this kind of a situation, it seems political slugfests would only serve as happy distractions to a listless ruling party. The opposition parties do not have anything intelligent to say about the economy except cry foul about the rising prices. So, heated debates about political trivia are the order of the day. It is the stationary economy that hurts the image of Prime Minister Narendra Modi and his government more than the much talked about atmosphere of intolerance and the protests of the liberals. Political sparring has its own place in a democracy and it would be futile to question the motives of either the anti-government protestors or of government spokespersons. The political atmosphere is likely to get vitiated in the short-term as a result of the bitter bickering between the two. But it will have no long-term impact on the country.

The real problem area is the economy. The creation of jobs remains a major economic challenge. The government, on its own, is incapable of creating jobs for everyone, not even for many of the jobless. Jobs are created by an expanding economy. The government can create conducive conditions for investors and entrepreneurs to get into the act, set up manufacturing units and get businesses going. The people need to take the economy into their hands and move it. Government cannot do it. The bottleneck is not so much the innumerable clearances that are required from the government in order to start a new business. The bottleneck is that of people waiting for the government to make the moves that will serve to activate the economy. 

Unfortunately, the country’s movers and shakers in the economic arena are afraid to take risks. They want an assurance that in case things fail government will bail them out. It is this dependency syndrome that is disturbing.

India can never be a thriving free market economy if entrepreneurs want to hang on to the coat-tails of government. 

The Prime Minister’s ringing promises have lulled people into believing that government will turn things around. After one-and-a-half years, it has become clear that Modi might have been sincere in making those election promises but that fulfilling them is beyond his imagination. People should not – in the first place – have believed in such unrealistic and bombastic promises.  Modi continues to indulge in bombast which is sounding hollower than ever.

The Modi government is not on course even in implementing the programme of skilling India. The demographic dividend of young India is slipping as the young remain uneducated, untrained and unemployable. The government’s anti-intellectual — this goes beyond liberalism and secularism — attitude makes it difficult to grapple with the social and economic challenge of creating a skilled workforce, and turning India into a knowledge economy because that is where the future lies. There is need for intellectuals and experts of all hues to transform India into a 21st century economic powerhouse. The Prime Minister and the government have displayed a distinct distrust of experts. And this does not augur well either for this government or for the country as a whole.