For the last fortnight or so, the “separatists” within the BJP and the envious outside had cast a cloudburst of economic gloom across the country. Distress in agriculture and breakdown of growth was predicted by these Cassandras dressed up as financial experts and columnists.
Now, suddenly, within just seven days, the gloom has been dispersed by two the chiefs of the world’s prime financial institutions. The World Bank and the International Monetary Fund have awarded merit cards to what’s happening in country’s economic scenario.
A statement of the Confederation of India was published on September 20 of this year. It said “The chamber said that positive developments in the global economy and upcoming festival season, as well as government capital expenditure, will contribute to growth.
First came the World Bank. On October 13, we got to know that, at the start of the latest annual meeting in Washington of the two renowned financial institutions, the Bank chief, Jim Yong Kim, was very appreciative of the reforms being undertaken by Modi in the last three years. He told the international media that “The reform process has been significant. We think that certainly in the medium and long term, the growth will reflect the seriousness of Prime Minister Modi’s government in making those reforms.” He said, “The Goods and Services Tax (GST) would be very good for Indian growth.” He also said, “Prime Minister Modi took a very different approach to our doing business report. And his approach was ‘we are going to move up quickly and we are going to do the things that we need to do to reform the business environment.’” And, for good measure, he also said, “The actions that Modi has taken are really quite substantial.”
Next was the view of IMF Managing Director, Christine Lagarde, at the said annual meeting. “Describing the two major recent reforms in India — demonetisation and Goods and Services Tax (GST) –- as a monumental effort,” Lagarde said, “we have slightly downgraded India; but we believe that India is, for the medium and long-term, much more solid as a result of the structural reforms that have been conducted in India in the last couple of years.” “But for the medium term, we see a very solid track ahead for the Indian economy,” she said to a question on India. “We very much hope that the combination of fiscal, because the deficit has been reduced, inflation has been down significantly, and the structural reforms will actually deliver the jobs that the Indian population, particularly the young Indian people, expect in the future,” she said.
Then, finally, is the Indian industry point of view. Nearly a month earlier than the dark predictions of our analysts and astrologers came on the scene. A statement of the Confederation of India was published on September 20 of this year. It said “The chamber said that positive developments in the global economy and upcoming festival season, as well as government capital expenditure, will contribute to growth. “Capacity utilisation has been building up and businesses have begun to firm up their investment intentions for a period of time. The government is increasing spending on low-cost housing and infrastructure. Care must be taken that public capital expenditure including by state governments remains elevated. Reforms in the area of ease of doing business will contribute to investments, including FDI. All these factors would help build growth forces.”
In the midst of these three cheers is the anger that firecrackers will not be on sale in the National Capital Region although their movement in from outside NCR will be permitted. Hence, bursting of firecrackers in Delhi will, in fact, be allowed but bound to be limited if you are a law-abiding citizen. This Supreme Court order has annoyed and upset large sections of people including the erudite author, Chetan Bhagat.
He, as a Hindu, has his reasons. Environmentalist, choked by the all-pervading pollution in the NCR region, have theirs. And economic development supporters have their own apprehensions about the effect of this order of the Supreme Court insofar as it halts the manufacture and stocking of firecrackers by the small and medium scale sector. Now, what is right and what is the truth? Clearly, a balance of a kind is needed.
Yes, balance is the need. The fanatic Hindus must introspect whether Lord Ram would have like his return to Ayodhya after a 14-year exile to be celebrated as Deepavali by a symphony of melodious conch shells and singing of hymns or by bursting of “atom bombs” that disturbs the sleep of old and sick seniors as well as leads to accidental fires and deaths.
As far as economic development is concerned, the likes of Yashwant Sinha must realise that economic growth is forever a “work in progress” and jumping the gun at this stage of “three cheers” for clear-cut signs of a bouncing economy – rising exports and value of the rupee, and reduced Wholesale Price Index – at Deepavali time is needless and thoughtless criticism.
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.
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