In 2020 September Issue of Red Star, under the title “India’s Economy is projected for the Biggest-ever Contraction”, quoting both international sources and official Indian agencies, we have briefly outlined the unravelling economic scenario for India in 2020. Accordingly, IMF, World Bank and ADB, together with India’s own Ministry of Statistics and Program Implementation (MoSPI), RBI, and the Centre for Monitoring Indian Economy (CMIE), have come to a consensus on the projection that the Indian economy was moving to a 4.5 percent contraction in 2020. Some independent researchers even predicted a shrinkage of India’s GDP from $2.11 trillion as estimated in 2019 to $ 1.9 trillion in 2021. Of course, independent institutions such as the Centre for Economic Studies and Planning (CESP), had even went a step ahead warning an impending 15-22 percent contraction for the economy. Among the factors identified by these studies that led to this historic downturn, the most important was the prolonged, ill-conceived and coercive and authoritarian lockdown superimposed by Modi.
However, most of these agencies were unwilling to have a close scrutiny of the economic performance of the 6 years (2014-20) of Modi’ rule and more or less were concentrating on the pandemic-link of the economic crisis including the regime’s ill-conceived policies that accentuated it. Though India’s per capita GDP has been one of the lowest in the world (140th rank according to 2019 estimate), corporate centres along with Modi government were still spreading the illusion that by 2024 India’s economy would move to a $5 trillion size. Contrary to the perspectives put forward by well-meaning scholars that Indian economy under Modi has been plunging throughout, the neoliberal pundits and a many academics were reluctant to have a concrete evaluation of the crisis confronted by the broad masses of Indian people. Though a general agreement is there among them that lockdown is the immediate cause for economic reverse, still they are in tandem with the official view that strict lockdown has helped India keep case fatality rate lower than counties like the US, the UK, France, Japan and Italy.
However, following the Economic Review report for August prepared by Indian Finance Ministry that was released following the spread of the information that GDP numbers for the first quarter ending June showed the worst ever quarterly performance by the Indian economy, the government was forced to willy-nilly admit thus: "Data now available for the April-June quarter confirms a significant world-wide year-on-year contraction of output resulting from the COVID-19 pandemic. US economy has contracted by 9.1 per cent, UK, France, Spain, Italy and Germany by 21.7 per cent, 18.9 per cent, 22.1 per cent, 17.7 per cent and 11.3 per cent respectively with the overall Euro area contracting by 15.0 per cent and Japan has contracted by 9.9 per cent. Relative to these advanced nations, India's GDP contraction at 23.9 per cent is slightly higher." And it is to justify this unparalleled collapse which Modi regime whitewashes as “slightly higher” without any scientific basis, that the Finance Ministry claims the “stringent lockdown” as helping the nation to contain its COVID-19 case fatality rate to 1.78 percent, as compared to 3.04 per cent in the US, 12.35 per cent in the UK, 10.09 per cent in France, 1.89 per cent in Japan and 13.18 per cent in Italy. On the contrary, as is evident from IMF’s Gita Gopinath’s unkind comment on India’s GDP contraction as “worst among G-20 countries”, neoliberal centres are unwilling to take Modi regime’s explanation as taken for granted. And of late, Lancet, the renowned medical Journal has vehemently criticised both Modi government and the ICMR under its control for covering up the gruesome pandemic situation in India.
Coming to the economic scene, the 24 percent collapse in GDP in the first quarter (April, May, June) of the financial year 2020-21 has gone against the calculations of the ruling classes. In common parlance, it implies that the total value of goods and services produced in India in April, May and June this year is 24 percent less than the total value of goods and services produced in India in the same period last year. In fact, sector-wise analysis of data shows a more frightening situation. In terms of the gross value added (GVA), barring agriculture where GVA grew by 3.4 percent (on account of favourable weather good monsoon) as claimed by government, all other sectors of the economy saw an absolute collapse. Thus, GVA in construction sector has shrunk by 50 percent, in trade, hotels and similar services by 47 percent, manufacturing by 39 percent and mining by 23 percent. According to some estimate, the entire economic activity during the quarter has been only 25 percent of what it was during the same period in 2019. The job-loss due to the collapse of the relatively labour-intensive sectors mainly comprising informal/unorganised activities alone is estimated at around 140 million. Meanwhile, the Express Research Group of MoSPI has made the startling revelation that compared with the first quarter of the previous financial year, individual consumption expenditure that comprises around 56 percent of GDP experienced a decline worth Rs. 531803 crore (the decline is estimated at 27 percent) and private business investment that is composed of 32 percent of GDP collapsed by Rs. 533003 crore (the decline is estimated at around 50 percent) in the first quarter of the current financial year.
The outcome of this unprecedented decline in respect of the two biggest “growth engines” (i.e., individual consumption and private investment which form economy’s driving force on account of the continuous downsizing of the government expenditure resulting in a decline in its share in GDP to around 10 percent) of the neoliberal economy that accounted for 88 percent of India’s total GDP, The government has no data regarding the millions of informal/unorganised workers, migrant and daily workers who lost means of livelihood and employment, though unofficial estimates count them in the range of 12-14 crore. As estimated by CMIE, around 21 million white collar professional employees and 5 million industrial workers have been sacked in India during the past one year alone that does not all include self-employed professionals like doctors, lawyers, chartered accountants, etc. As a matter of fact, the 23.9 percent GDP contraction in the first quarter of 2020-21 as estimated by Indian Finance Ministry, on account of paucity of data, is not based on the real state of the economy pertaining to the informal sector. Therefore, as pointed out by US-based neoliberal experts like Raghuram Rajan, if the damage to the informal sector is also taken into consideration, then the economic collapse will be worst in sharp contrast to the GDP drop of 12.4 per cent in Italy and 9.5 per cent in the US, two of the most COVID-19 affected economies. Hence, as the global economy is going to contract by 4.3 percent this year (as calculated by UNCTAD, this year the world will experience a complete wipe-out of $ 6 trillion in terms of GDP –equivalent to the combined GDP of Brazil, India and Mexico), as estimated by MOSPI, Indian economy is going to collapse at the rate of 7 percent in the current year!
However, the very same neoliberal centres who now expose India as the worst performing economy were unanimous in characterising it as the “best performing country” in the world in 2014 with a GDP growth rate of around 7 percent when Modi government assumed power 6 years ago. Since then, what happened has been an irreversible downward trend in GDP growth rate along with the intensifying poverty, deprivation and pauperisation of the broad masses of toiling people as manifested in the historic decline in production, biggest unemployment in five decades, horrific levels of inequality and corruption. Though already discussed much, let us go through a few indices to unravel this historic plunge of India during 2014-20. For instance, in 2014 India’s ranking in Global Hunger Index (prepared by the International Food Policy Research Institute) was 55. Under Modi, within two years it steadily declined to 100 in 2017 and further to 102 in 2019 among 117 countries in the world and much below that of all South Asian countries such as Sri Lanka (66), Nepal (73), Bangladesh (88) and Pakistan (94) in 2019. Regarding hunger and deprivation of children, an indication of the seriousness of poverty and deprivation, Indian position is despicable. In India, only 9.6% of all children between 6 to 23 months of age are given a minimum acceptable diet and medical care. India is also notorious for under-5 mortality rates and prevalence of undernourishment owing to inadequate food. And, as an indicator of inequality and deprivation, India’s rank out of 189 countries on the 2019 Human Development Index released by UNDP is 129. Of course, there is no dearth of statistics highlighting the extent of poverty, hunger, inequality, unemployment, corruption, etc. in India.
Let us see the other side of the picture too. Under Modi regime during the same period, the concentration of income and wealth with the superrich Indians witnessed a sky-rocketing. For instance, in 2013, i.e., before Modi’s ascendance to power, the number of dollar billionaires (those having assets worth $100 crore and above) in India was 63. After Modi’s coming in mid-2014, their number steadily grew to 90 and further to 138 in 2019. Ambani who leads this list with $ 8060 crore (equal to around Rs. 6 lakh crore) is the fourth richest in the world today. In the absence of reliable domestic data, we have to depend on international sources such as Forbes, Oxfam, Credit Suisse, etc. to get a real picture on this. While 53 percent of the entire national wealth is gobbled up by just one percent of the superrich, the poorest bottom half of the population owns only around 4 percent of the national wealth as of now. When Modi came to power if one percent of the superrich appropriated around 50 percent of the additional wealth generated in a year, on account of his superimposition of corporate saffron-fascism, today this proportion has grown to almost 80 percent, quite unheard of anywhere in the world!
Over the last six years of Modi regime, this horrific wealth concentration on the one hand, and hitherto unknown levels of deprivation and destitution of the masses on the other, have revealingly taken place along with a process of India’s economic transformation from “best performing” as estimated in the 7 percent GDP growth rate in 2014 (as recognised by both Indian international agencies) to “worst performing” as is manifested in the 7 percent contraction of GDP as now admitted by the Indian Ministry of Statistics and Program Implementation (MoSPI). Obviously, the roots of this destructive process are not caused by any extraneous or external disturbances but a logical corollary of the fascistic “surgical strikes” directed against the people ranging from the superimposed demonetisation to the coercive lockdown pursued by Modi without any economic or medical basis. Demonetisation in 2016 that terrorised and subjugated the people in the guise of dealing with black money was an ingenious move for an unprecedented concentration and centralisation of wealth in most corrupt corporate, crony capitalists. The GST that followed (since mid-2017) was also aimed at bringing India’s goods and services market under the firm control of corporates after demolishing the federal structure of the Constitution. Both these neoliberal-fascist offensives that may be characterised as economic holocausts led the entire economy to a frozen state, brought all economic activities to a standstill and paralysed the agricultural sector that provide sustenance to 50 percent of the people and destroyed the informal and traditional sectors which are the sole source of livelihood for 95 percent of the 52 crore workforce in India.
The whole package of far-right neoliberal polices and direct measures such as pro-corporate tax exemptions, neoliberal labour and environmental deregulations, series of stimulus and economic packages that directly channelled trillions worth of public money into the coffers of corporate thugs and outright loot of public sector banks coupled with the fascistic demonetisation that at a stroke wiped out 86 percent of currency in circulation quite unheard of in modern history, followed by GST and so on have already led India to a historic economic stagnation on the eve of COVID-19 itself. The fabulous wealth thus appropriated by corporates, both foreign and Indian, according to the logic of neoliberal accumulation, instead of contributing anything towards employment-oriented productive sphere, actually went into money-spinning speculative spheres or for further appropriation of public assets by a handful of the superrich billionaires. Consequently, on the eve of COVID-19 itself, Indian economy had entered into the biggest-ever contraction in its history along with its concomitant manifestations in all spheres.
Historically, crisis has been an opportunity for fascists and Modi knows the art of effectively utilising it from his experience of heading both state and central administration. Thus without even consulting the parliament or opposition, and with a four-hour notice, and quite reminiscent of the manner in which demonetisation was implemented, he superimposed the most stringent and most coercive lockdown that continued at a stretch for two months on an economy which, as we noted in earlier articles, was already in ICU. This highly authoritarian and destructive move which is unjustified and uncalled for while collapsed the entire industry and service sectors, also impacted the agricultural sector due to abrupt collapse in demand and freezing of trade and transportation. Only the fascistic administration and its oppressive instrument such as police required to implement the lockdown remained functional. The outcome: India has become the worst performing economy in the world during 2020 April-June quarter.
Now if we take the entire Asian countries, the estimated COVID-triggered economic contraction for this part of the world during this period now hovers around an average of around 6 percent, even as the real economic collapse of India may be larger than the 24 percent now estimated by government’s own agencies. For instance, former chief statistician Pranab Sen had projected a GDP contraction to the extent of 35 per cent if the real situation in the informal sector is also taken in to consideration. Therefore, COVID-19 is only partial explanation for India’s current economic collapse. Rather, it is directly connected with Modi regime’s far-right fascistic policies that serves corporate capital since 2014. The present unparalleled economic collapse of India is corporatisation-induced. To reiterate again without much elaboration, as we have already said, unless this trend is reversed through an appropriate political intervention, the corporate-saffron fascist regime will again try to deploy all avenues at its disposal to carry forward its disastrous pro-corporate agenda and put heavier burdens on the backs of common people.
As we have noted in our analysis of the Interim Budget (“Budget as a Means of Purchasing Votes?”, Red Star, March 2019), that exercise of the Modi government was in total disregard of all established parliamentary traditions, precedents and scruples, including even abandonment of placing the mandatory pre-Budget Economic Survey which was indispensable for the country to know the “real state of the economy”. Modi government was afraid of presenting the Economic Survey asthe data, inevitably be preparedby official agencies such as Central Statistical Organisation and National Sample Survey Organisation, would have to highlight several unpleasant but real facts concerning the economy. If brought to light through the Economic Survey, it would have been an official admission of the frightening disruption that has ravaged the entire economy. And on the eve of the 11thLaksabha election, leading members of these agencies who were reluctant to manipulate the data as demanded by the regime, quite unprecedentedly, had resigned from their posts.
At the same time, utilising doctored statistics, manipulated data and bogus claims, Modi regime transformed the interim budget into an election speech with a whole set of freebies, giveaways, tax concessions, money transfer schemes and other populist programs, each being addressed to specific vote-banks. But after winning the election with a brute majority backed by corporate money power, EVM manipulation and by depoliticising the masses, in the full-fledged budget Modi.2 has brought forward its true colour.
Coming to Modi.2’s maiden budget, several experts including IMF pensioners deputed to India and US-based researchers formerly associated with Modi government, in spite of their adherence to neoliberal economic philosophy, have come out openly against the use of manipulated official data in it. Among them, the most relevant criticism has come from Arvind Subramanian, former Chief Economic Advisor (CEA) under Modi.1. Though Modi.2’s panel of economic advisers have rejected his evaluation, Subramanian’s observations have once again reignited serious concerns about the credibility of government’s economic growth data including the 2019 budget estimates made by Sitharaman in her maiden budget. For instance, the 2019 budget claims that in 2018 India was the fastest growing economy in the world. According to Subramanian, this is an overestimation as the methodology used for calculating it was also flawed- an aspect upheld by several other economists too. Obviously, in the beginning of Modi’s first term, in 2015 itself, India had changed the way and the methodology of measuring GDP. The first major change was the use of market prices instead factory or production costs to calculate the GDP figures. This shift in the method of calculation from the traditional practice of using wholesale prices with producers to market prices paid by consumers will definitely give an inflated figure of GDP. Secondly, the base year was shifted from 2004-05 to 2011-12 to assess GDP growth figures. Naturally, when the base year becomes 2011-12 everything included in the calculation will be at the 2011-12 prices which will be much higher than that of 2004-05 prices such that the nominally again the GDP figures will be inflated.
Therefore, Subramanian questioned the claims of the Modi government that under its regime GDP had grown to 7 percent per annum and, according to him, the actual GDP growth under Modi.1 is only around 4.5 percent (hovering between 3.5 percent and 5.5 percent) instead of 7 percent. However, the new methodology enabled Modi regime to suspiciously lower the GDP growth rate of under the UPA regime, and artificially hike that during the NDA rule. Ironically, based on this new methodology, the fastest growth of 8 percent and 8.2 percent was respectively recorded during 2016 and 2017 though these were the years when both demonetisation and GST had devastated the economy. More revealingly, even today reliable data regarding the unorganised sectors are lacking, and it is this area that contributes 60 percent to the entire economic system.
Since, Subramanian’s comment is based on these facts and on his own research, which has been published by the Centre for International Development at Harvard University, many economists and statisticians have come to believe that Modi government’s GDP figures are exaggerated or overstated by about 2.5 percent! Hence when Modi government claimed India as the fastest growing economy in 2018, many leading economists have pointed out that this claim is baseless as it is on the basis of a flawed methodology.
Subramanian has even gone to the extent of calling for an independent panel of experts comprising Indian and foreign nationals to examine India’s GDP data. To quote him: “My new research suggests that post-global financial crisis, the heady narrative of a guns-blazing India - that statisticians led us to believe - may have to cede to a more realistic one of an economy growing solidly but not spectacularly.” As such, several experts asked for restoring confidence in the official data by urgently revamping the statistical system to have an accurate picture of the economy and capture real-time data for policy analysis. Revealingly, finance minister Sitharaman has not yet been able to answer the question relating to the discrepancy in revenue collection between the Budget estimates and Economic Survey, the latter being generally recognised as reliable. Thus, while the Budget Estimates for 2018-19 expect a revenue of 17.3 lakh crore, Economic Survey puts the same as only 15.6 lakh crore—a gap of almost Rs. 2 lakh crore, a manifestation of utter confusion connected with data manipulation.
When Sitharaman in her budget speech elaborated the government’s goal of transforming ‘fastest growing’ India into a $5 trillion economy in the next five years (i.e., almost doubling from the present $2.7 trillion) that requires an annual GDP growth rate of 8 percent, and outlined her budget estimates in conformity with this task, the fact remains that the whole exercise is based on unrealistic and unscientific data. Most important is the fact that even this $2.7 trillion which at present is equal to the state domestic product of California, one among the 50 states in US, itself is an exaggerated figure. As already pointed out, the present high growth claim is not at all reflected in the economy or experienced by the people since, despite the government’s claims of rapid growth, unemployment touched a 45-year high that too during the last two years of Modi.1. Further, in spite of several initiatives on the part of commerce and finance ministries to boost exports, on a year-on-year basis, Indian exports have dwindled in 2018 by 9.71 percent relative to the previous year due to both domestic factors and external factors such as ongoing global stagnation and strengthening of protectionist walls being built by a number of countries including the US.
Coupled with this, the industrial sluggishness or deindustrialisation, unprecedented agrarian distress as manifested in the increasing mass suicides of peasants across the country and above all the total devastation inflicted on the informal/unorganised sectors (on account of demonetisation that created a sudden stoppage of cash flow to them on the one hand and GST that led to the withdrawal of all special tax provisions and corporate restrictions that sustained these sectors) that provide employment to more than 90 percent of the Indian people and contribute almost 50 percent to country’s export earnings)also reveal that the projected 8 percent growth rate as envisaged in the budget for doubling the GDP to achieve the $5 trillion mark is only wishful thinking.
In fact, the entire growth agenda elaborated in the budget are to unleash what is called the “animal spirits” of corporatesto achieve the $5 trillion goal. To achieve this, while blatantly hoodwinking the people through certain populist schemes like Swatch Bharat Abhiyan, Bamboo and Khadi clusters, Rural Housing Schemes, KissanSammanNidhi, etc. to rural sector and peasants, (even as reducing MGNREGS allocation by Rs.1000 crore!) and appeasement of middle classes through certain income tax exemptions, this budget, true to the far-right economic orientation of saffron fascism, has opened up avenues for the biggest-ever corporate plunder and loot along with integration of India’s infrastructure, finance, trade and service sectors with foreign corporate speculative capital. All the restrictions to the free entry of FDI into social overheads, insurance, banks, aviation, retail trade and even media are abolished. Even namesake controls on foreign portfolio capital which is coming solely for speculation are being taken away.
For instance, the hallmark of Modi.2 budget is its announcement of an infrastructure program envisaging investment worth Rs. 100 lakh in 5 years along the notorious PPP route that has become the most widely recognised form of private-corporate plunder under neo-liberalism. The whole projects under this proposal utilising country’s land and scarce resources, budget allocations and above all public money deposited in banks will be led by the most corrupt corporate thugs, both foreign and domestic. Unhindered entry and exit of 100 percent FDI as announced in the budget is in accordance with this corporatisation.
In the case of railways (along with the Planning Commission, Modi had abolished the Railway Budget too), in accordance with the ultra-rightist orientation, entire railway development including rail infrastructure, goods and passenger segments is also brought under the notorious PPP model led by Indian and foreign corporates and an investment of Rs. 50 lakh crores is envisaged for this for the period between 2018 and 2030. To start with, projects in two corridors — Western corridor (Delhi-Mumbai) and Eastern corridor (Delhi-Howrah) — have already been initiated. In the same manner projects for building up 125,000 km roads with an allocation of around Rs. 75000 crore on the part of government under PPP will be undertaken in the next five years.
Modi.2’s first budget is going to create history by granting tax-exemptions worth Rs. 8.99 lakh crore to monopolies under various heads out of which corporate income tax exemptions alone amounts to Rs, 4.69 lakh crore. The consequent revenue gap is to be filled up by hikes of Rs.2 cess/litre on patrol and diesel with their concomitant cascading effect on the prices of all necessaries, Rs.2 cess/litre on patrol and deisel will make the prices of necessaries and essential as announced in the budget. The gains from corporate tax-cuts announced in the budget are applicable to almost 99 percent of the business class, even as India’s income tax base still remains too narrow with just 4.6 crore tax-payers filing returns.
At a time when even leading financial tycoons like George Soros have written to US presidential candidates seeking increased taxes on the superrich and billionaires, Modi government has reduced corporate tax from 30 percent to 25 percent (in view of various corporate tax-exemptions, experts have already pointed out that the nominal tax of 30 percent means an effective tax of only 16 percent) for companies with a turnover of up to Rs. 400 crore. While corporate tax rate in India, a country having the highest inequality in wealth and income with around 80 percent of the additional income generated being gobbled up by the upper-most one percent of the population, is the lowest, even imperialist countries like France and Germany still have 56 percent tax on the superrich. Further, India under the Modi regime has become the country having the lowest tax-GDP ratio of 11.7 percent.
Along with this unleashing of corporate capital to every sphere of economy, the budget also envisages several neoliberal steps for discipline and keep workers at its disposal. In this regard, the move to transform all the existing 44 labour laws into 4 Codes has already been taken during Modi.1 itself. Among them, the first one, i.e., the bill on the Code on Occupational Safety, Health and Working Conditions (OSH Code) that legally empower employers to extend working time to 14 hours against the existing 8-hrs work, abolishing guarantee for ‘equal pay for equal work’ and incorporating provisions for transforming the state as a ‘facilitator’ of corporates against the interest of workers is already presented before the parliament. This Code that seeks to merge 13 labour laws into a single code applicable to all establishments employing 10 or more people and, therefore, encompasses 40 crore of Indian workers, together with the other 3 Codes, is a flagrant violation of ILO regulations and a clear-cut corporate-saffron fascist move towards unfettered corporatization. At a time when the domestic market is shrinking, the idea is to emulate China’s model of capturing global market with low-priced goods and to strengthen the present trend towards India’s transformation as a cheap-labour based export-oriented economy. In conformity with this Code, without even convening or even consulting the Statutory Minimum Wage Advisory Committee, to appease the corporate plunderers, the Modi govt has fixed Rs. 178 as the daily wage for workers. Modi’s anti working class position is once again evident as according to a Report, out of the Rs. 47127 crore Construction Cess collected as of March 2019, only around 19000 was spent, and the worst case in this regard is that of Modi’s own Gujarat spending just 0.09 percent of the cess collected.
The budget has other notable anti-people measures too. The disinvestment target pegged at Rs. 1.05 lakh crore is the biggest-ever intended to instalment-wise sell-out of all the remaining PSUs by such as BSNL, ONGC, GAIL, etc., to the corrupt capitalist cronies at throwaway prices. And as manifestation of the interpenetration between the saffron fascist regime and corporate monopolies which is a feature of fascism, Amit Shah, the Home Minister himself has taken over the charge of the Cabinet Committee for disinvesting Air India. Another closely related aspect of this fascistisation is the defence allocation including pension to the tune of Rs. 4.31 crore out of which an amount of Rs. 1.08 crore is to be directly handed over to corporate arms manufacturers and weapon dealers based in imperialist countries especially, US.
Thus while the budget tries to achieve its high growth target by freeing up the “animal spirit” of the corporate financiers, what witness is a slowing down in all sectors. Even the stock market indices which were galloping upwards when Modi.2 ascended to the throne are going down so that during the 50 days of the government, around 12 lakh crore have been lost in the leading stock exchanges in India. The reason is all round shrinking of the world market mainly due to extreme protectionist policies pursued by countries together with the loss of purchasing power of the toiling masses in the domestic sphere arising from unprecedented joblessness.
In the mad pursuit of making maximum profit at the shortest time possible, capital investment is fast entering in to the sphere of money-spinning speculative sphere altogether abandoning employment-oriented productive sectors where profit rate is relatively low. As a consequence, deindustrialisation and unemployment have become the norm even as wealth accumulation in the hands of tiny superrich and financial elite is breaking records leading to unprecedented inequality and pauperisation of the broad masses. To be precise, budget is reinforcing this negative trend.
Finally even the chief of Niti Ayog also had to accept the economy is collapsing. Now the finance minister has rushed with some props to prevent it from falling further. She has announced rolls back of super-rich charges on foreign and domestic equity investors, to those speculators who make fortunes through portfolio investments in stock markets, sops to automobile majors and to other corporates for getting their help to kick start the economy again. But the reports speak about slow down reaching more areas, from automobiles and real estate to textiles, even to biscuits and other consumer items. Why? The purchasing power of the consumers is falling! Naturally, as even jobs of middle income groups are also falling sharply, and the unemployment rates have reached highest levels in 45 years. With the increasing slow down, hundreds of thousands are losing jobs every day. Along with the serious distress in the farm sector which is compelling thousands of farmers to commit suicide and millions of agricultural workers’ families forces to migrate to urban centres, the consequences of man-made climate change leading to draughts, flash floods and mud-slips have also sharply cut down the purchasing power of increasing number of people.
But, even many among the corporate think-tanks also agree that just by rolling back her own budget proposals presented two months back along with providing some sops to corporates, the increasing crisis cannot be solved; because the slow down, in the main, started from the time of demonetisation itself, and aggravated after the introduction of the GST. Though Modi succeeded to cover up the impending economic crisis during the election campaign through unleashing a muscular nationalist offensive projecting Phulwama and Balakot, and his finance minister presented her budget based on cooked up data in the economic survey, in spite of Modi’s efforts for whipping up frenzy among his majoritarian Hindutva vote bank through Kashmir, Pak-phobia, NRC like projects, one day the reality had to come out, as it has reached such a size that it cannot be covered up any more. Corporate media also forced to mention collapsing economy!
Now the billion dollar question is, can the finance minister block the torrent of economic slowdown with these sops to the corporate and speculative sharks? Under present crony capitalism, while all the benefits from these will be sucked up by these sharks, very little is going to tickle down to the masses. So, the employment and purchasing power shall go on decreasing, and the slowdown will only become more severe. What is required is the reversal of his phoney economic initiatives, and eventually the rejection of the neo-liberal/corporate policies, and developing self-reliant, sustainable, people oriented economy. As both are anathema to Modi regime and to the very corporate imperialist system itself, the crisis shall sharpen only. And as usual, the whole burden of the crisis shall come over the toiling masses. More than ever, they have only one way out: come out on the streets, intensify the struggles to throw out this barbarous ruling system!
Finally even the chief of Niti Ayog also had to accept the economy is collapsing. Now the finance minister has rushed with some props to prevent it from falling further. She has announced rolls back of super-rich charges on foreign and domestic equity investors, to those speculators who make fortunes through portfolio investments in stock markets, sops to automobile majors and to other corporates for getting their help to kick start the economy again. But the reports speak about slow down reaching more areas, from automobiles, two wheelers, other vehicles and real estate to textiles, even to biscuits and other consumer items. Why? The purchasing power of the consumers are falling! Naturally, as even jobs of middle income groups are also falling sharply, and the unemployment rates have reached highest levels in 45 years. With the increasing slow down, hundreds of thousands are losing jobs everyday. Along with the serious distress in the farm sector which is compelling thousands of farmers to commit suicide and millions of agricultural workers’ families forces to migrate to urban centers, the consequences of man-made climate change leading to draughts, flash floods and mud-slips have also sharply cut down the purchasing power of increasing number of people.
But, even many among the corporate think-tanks also agree that just by rolling back her own budget proposals presented two months back along with providing some sops to corporates, the increasing crisis cannot be solved; because the slow down, in the main, started from the time of demonetisation itself, and aggravated after the introduction of the GST. Though Modi succeeded to cover up the impending economic crisis during the election campaign through unleashing a muscular nationalist offensive projecting Phulwama and Balakot, and his finance minister presented her budget based on cooked up data in the economic survey, in spite of Modi’s efforts for whipping up frenzy among his majoritarian Hindutva vote bank through Kashmir project, increasing Pak-phobia, NRC like projects, one day the reality had to come out, as it has reached such a size that it cannot be covered up any more. Even the corporate media is forced to mention the details of the collapsing economy!
Now the billion dollar question is, can the finance minister block the torrent of economic slow down with these sops to the corporate and speculative sharks? Under present crony capitalism, while all the benefits from these will be sucked up by these sharks, very little is going to tickle down to the masses. So, the employment and purchasing power shall go on decreasing, and the slow down will only become more severe. What is required is the reversal of his phoney economic initiatives, and eventually the rejection of the neo-liberal/corporate policies themselves, and developing self-reliant, sustainable, people oriented economy. As both are anathema to Modi regime and to the very coporate imperialist system itself, the crisis shall sharpen only. And as usual, the whole burden of the crisis shall come over the toiling and oppressed masses. More than ever, they have only one way out: come out on the streets, intensify the struggles to throw out this barbarous ruling system!
CPI(ML) Red Star.