Lullabyes For The Nation

Lullabyes  for the Nation


The Prime Minister, under pressure to comment,  tried at last, to reassure parliament and the nation on the 30^th of August after a month of humiliating and harrowing economic disasters coming thick and fast.

But as usual he had nothing to offer except a laundry list of excuses, unsubstantiated hopes and unconvincing assurances.  The PM is an admirable study in stoicism because nothing seems to agitate him except the occasional taunt from fellow octogenarian LK Advani.

The reformist finance minister of 1991 has been replaced by the stone -walling prime minister of the last decade. That it is indeed the same man, and not a clone, tells you what the passage of time and the pulls and tugs of circumstance can bring about.

Mr. Singh said that the government will take remedial measures to right both the currency and India’s economic performance.  He said that both the finance ministry and the RBI were on the job without a single remark on their utter ineffectiveness to date.

Manmohan Singh’s statement on the economy and his government’s plans to set things right in the Lok Sabha sounded more like an  elaborate alibi with its bare-faced and calm attempts to deflect blame on things beyond the control of the government of India.

The PM did not lay out any specifics on what he or his government is going to do about the crisis. But then, he has tried that before, garnishing his attempts at restarting reform with his ‘animal spirits’ remark months ago. But that too failed to produce any results besides spawning a fair degree of derision.

This time too there are many jokes doing the rounds, including the suggestion that Haryana be named Jamai-ka. Better to laugh, thinks the public, then to cry. But normally this kind of black joke as catharsis is the relief and remedy in tyrannies, dictatorships, Mr. Vadra’s banana republics, and failed communist states.  We must perhaps see where we best fit in.

But the PM gamely blamed the tension in Syria, and possible threat of a US attack on the country for India’s rising oil import costs, not, the precipitous fall in the rupee’s value, even though every rupee fall against the dollar raises our oil import bill by Rs. 8,000 crores.

 And America’s nascent recovery gets the blame for the plummeting rupee, along with a horde of other Ems, give or take a few percentage points.  That we have done worse on the rupee than all the other emerging markets, is also not remarked upon by our august one.

The PM also blamed the Indian’s insatiable appetite for imported gold to explain the growing CAD. That Commerce Minister Anand Sharma suggested we monetise just 500 tons of the some 31,000 tonnes of gold in the country for about $25 billion, was also not something the PM could ever take seriously.  Not when we are laying the blame elsewhere as opposed to looking for solutions.

Our domestic economy which has long been the source and arena of India’s growth is not mentioned particularly by the PM, except in passing, when it is this entity that has been crucially neglected by the present government.

It is the domestic economy, industry,  business, agriculture, infrastructure, that has ground to a halt because of government mismanagement. Even exports are languishing. Garments , lacklustre because of flat demand in the importing countries of the West. Diamonds, because the ‘ roughs’ cost more and more to import. Engineering goods, because of a paucity of projects abroad. Cars and buses, for the same reason.

Software is managing after a fashion, but is plagued by rising costs and insufficient value addition.

Consumption too is affected by a liquidity squeeze and much less disposable income due to inflation, lack of growth, and job losses. PSU Banks are groaning under the burden of huge NPAs. Fuel prices are rising daily. Inflation is climbing everywhere and goods and services are becoming ever costlier.

Salaries are stagnant, and business profits have turned into losses under huge interest burdens of massive debt affected by the sharp slow-down in off-take and revenue. Inventories are piling up and leading to distress selling at a loss. Nothing is doing well in India at present.  

However, the recent welfare moves such as the new Land Bill to replace the colonial 1894 act is a good and right step towards common justice for land-owners and farmers not seen since independence.

Instead, the bias always ran the other way from the abolition of zamindaris soon after independence leading to the ruin of many a landed family, to the amount of land and property any one person could own soon after that, the infamous land ceiling legislation, led to huge benami transfers and much grief too.

The persecution of the princes and the abolition of the privy purses in the crudest possible fashion was also of a piece with the bullying ways of the sarkar and how the government saw its role.

Industry and the property developers who are complaining now may therefore be better served to make up their minds to share some of their substantial profits with the owners of the land they want to build upon. When politics is on the move expect the voter to get it all.

The Food Bill, seen as another political imperative, may also turn out to be a boon in the long run. That is, if the government and its successors find it in their policy making hearts to spur growth to easily afford its largesse, and if they use its requirements to modernise its materials handling, storage and distribution mechanisms to serve people in the 21^st century.

And if the needs of the Food Bill and indeed a burgeoning population, forces grater mechanisation and scientific cultivation/irrigation etc. in agriculture and transportation, to bring up productivity.

The business of living in several centuries past along with the current one must fade out from our psyches. It may amuse a few aesthetes but does the rest of us down. In some ways we are manifesting a new ambition with our Don Quixote like welfarism in the face of our financial decrepitude, and despite our slack and corrupt ways.

If such boastful promises are to be met, then concomitant actions must realistically follow. We may not even realise what we have let ourselves in for at present, but that does not perhaps matter. All is well that leads us to a favourable outcome. And all hail the new government that leads us into the light.

(1,086 words)

August 30^th, 2013

Gautam  Mukherjee