In the beginning, I want to make it clear that I have no inclination in politics except that I am concerned about what is going on in my country, India as an ordinary citizen, I have tried to be candid in my views as to what I perceive, seen and in these years.
The relationship between Democracy, Politics and the Economy is a complex and multifaceted one, with each sphere of activity having a significant impact on the other. Political decisions can shape the economic landscape, while economic developments can often influence the political agenda.
The present-day politics has caused an overweight on democracy due to which it has become very heavy on our economy. Since 2014, the present Government is more on politics than on governance. The fact is our democracy is in total peril. Our freedom is being diminished by fundamentalism and general intolerance. There is religious intolerance amongst Hindus and Muslims and even Christians, and in the last nine years it has become a far more divided society. Bull dozer has become law in itself. Murders and Rapists are released through Government orders and worst of all they are felicitated. Unfortunate part is that the ruling party try to justify it. Cow vigilantism has become rampant.. Ninety percent of the Media is being controlled by large business groups and is willy-nilly under full control of the government and its directives. It is obviously being done for financial gain and also to avoid undue harassment. God Ram God Hanuman has become a symbol more of politics than worship. and fiercely being roused in Election rallies.
Decision of demonetization taken and announced its implementation in four hours with no plausible reason and benefits till date. Currency is issued and withdrawn after 7 years. Government Data tampering and its veracity are always in doubt. This is no sign of governance. Government departments have become extended ruling party offices. Manipur is in turmoil for almost two months. No words of any sort as if they are not accountable to the public. The only agenda that is left of our politicians is lust for power and they want to continue the same by any means. The present bunch of ruling politicians have no vision, Knowledge, and Character.
We take pleasure in criticising Gandhi, Nehru, Patel, Bose, Ambedkar and many of our freedom fighters deliberately ignoring the contribution that these great leaders have made. We try to lampoon them with false narratives to glorify present leadership. History is being rewritten. Yet it has continued unabated. What sort of politics is this? If we have to understand these great leaders we need to put ourselves in that era. This is nothing but political shallowness.
We have a democracy without meritocracy, incompetence ignorance and honesty are no disqualification for high public office in the ministerial rank or otherwise. Our leadership is busy election after election as if it is the only task of the Government, even when the economy is in turmoil, unemployment is at its peak, and we are amongst the lowest in the global hunger index. The focus of the present regime is to support large business houses which are their biggest financial contribution partner to the ruling party even sources are not known.
Politics and the economy are interconnected through the concept of power. Economic power can translate into political power, and vice versa. Wealthy individuals and corporations use their economic power to influence political decision-making, while political power is used to shape economic outcomes. This leads to concern about the influence of money in politics and certainly calls for greater transparency and accountability in political decision-making.
By voting ignorant professional politicians to power we have singularly gifted our enterprising nation in the poorest rank of people on the earth. The present bunch of ruling politicians take pleasure in saying that we feed 80 crores population with rice and wheat justifying the fact that we cannot provide them with gainful employment, without a vision of how long and how far it can continue. This is certainly not a matter of pride. The economic problems are so complex that it is far beyond the knowledge and capacity of today’s political leadership.
it is high time our self-glorified politicians should be serious about the economy. They must realize that development happens with the people and not with tall calls. Its long-term damage is just beyond comprehension. Make no mistake, our present professional politicians continue the same so that this marginal class can support them with votes. The time has come when these politicians must think beyond politics and the vote bank. There is no shortcut to people’s welfare, and it cannot be achieved by slogans. it has to be achieved by efforts and by proper planning.
The worst part is the ultra-rich, rich, and middle class people are almost totally alien to the plight of the poor and marginal class, and it is this population that is growing year after year. There is no proper education, no proper living facilities no “employment” to sustain them and their families. It belies the tall claim of the government’s so-called welfare measures. They live in extremely pathetic conditions. The very fact can be understood when we support them with 5 kgs of rice and wheat etc. as if their welfare ends with it. Their struggle for life is beyond comprehension. It must be seen rather than believed. Are these people playing any constructive role in the development of India’s economy? certainly not. Have we imagined a situation when this support gets discontinued? Some migrate to cities to find and do miscellaneous jobs to earn a few thousand to look after their family for a stable life and future.
On the economic front, the prices of all commodities are higher by 75-100% as compared with 2014-15. Gasoline prices are NOT benchmarked with crude even when prices of crude were down to their lowest level at $30 and on an average ranging maximum up to $73. Petrol and diesel are examples and admittedly they are the running wheels of the economy. You name any commodity, and the prices are higher and gradually going beyond the means of a large section of the population. Price stability is the most important factor of a growing economy and if not done would give rise to inflation. The prices need to be calibrated on a regular basis by setting up a benchmark so that it remains stable without being a burden on the public even in adverse conditions. If it is not controlled it would only create a situation of inflation. It is a mistaken belief that in an Inflationary situation, increasing the bank rates and levying taxes would help control inflation. It may do to some extent, but the other flip side is it also adds to the misery of the middle and poor class which is 97% of the population. The fact is inflation resorts to higher revenue to the government which can be seen from the revenue coming out of GST etc. Inflation is a mighty tax-gatherer. The Government makes sure it is not cured as It has become an easy tool whereby government confiscate secretly unobserved wealth of their citizen. People have to have the capacity to pay unhindered and without being any burden even during worst situations.
India is a country with a large poor and marginal population. 96% of the taxes is the contribution of 97% of the population. No one yardstick can be applied in any way for controlling inflation. What is good for US, UK and other countries can’t be taken as equally good for India because India’s social fabric is totally different. The revenue of the government must be generated from productive investments that create demand for products and services. This is not happening. Another important area that needs immediate attention is external borrowing which has swollen from Rs 56 lac crores to Rs 156 lac crores. It is huge, huge, and huge. No debt comes free. It has a cost which ultimately becomes a citizen’s liability. There must be a limit to which we are prepared to mortgage the future of our country and I am sure we have already exceeded the limit. Living on excessive borrowing is nothing but stealing the future. Without clarity of thought and readiness to admit mistakes, it would be impossible to solve our economic problems. If we don’t make our policy that makes for plenty let us have policies that make sense. The understanding of India’s economy by a large sections of society is different from the understanding of the economy by economists. It is more subjective rather than objective.
In India, we have three classes of citizens:
The first category is ultra-rich and rich who live in big cities like Mumbai, Delhi, Bangalore etc.
The second category is that of the middle class and upper middle class, who also live in big and small cities.
The third category is the most vulnerable poor and marginal class They constitute more than 100 crores. This class is more than the population of the entire continent comprising 57 countries.
It is this third category which is vulnerable and important to be addressed.
In the last nine years, one policy that has been actively perused by the present Government is to divest national Assets that were built over the past 70 years. The present government is sadly mistaken that the basic task of Government is to govern and not run businesses citing
examples of “developed European” countries. Admittedly, there is no doubt about this fact but there is a big catch. This logic cannot be the basis of divestment as India is still an underdeveloped country with 140 billion people whereas Europe consists of 57
countries and have a population of 800 million people of which Russia alone accounts for a population of 200 million people. This shows that India’s population is twice that of the entire Europe population. On the other side, the poor and marginal class of India’s population is more than the combined population of 57 countries. CMIE data shows that the unemployed percentage is progressively increasing from 6.1% in 2016 to over 8.5% in 2023 and would reach over 10% by 2025. This is alarming. This does not include the unorganized sector. We must understand the important fact that India’s population is growing by almost 20 million every year. Even assuming 20% of this increased population of educated young people passing out of various colleges every year would mean 4 million people need employment every year for which additional jobs must be created over and above a large army of existing unemployed youth? If this situation is not corrected by 2025-26 the unemployed percentage would be over 10%. This is huge. Are we prepared for this? Certainly not. It is beyond doubt that the government is fully aware of it but there is no visible Planning and or roadmap of addressing this important issue. Make no mistake it is going to explode sooner than later. Ultra-rich, rich, and upper middle class cannot be a basis and barometer of India’s Growth,
Now the other flip side, Europe’s economy is almost $20 trillion with a population of 800 million whereas India’s size of the economy is $2.7 trillion with a population of 140 billion. It is the dollar value that has increased from $61 in 2014 to $83 in 2023 a rise of almost 25% The population has increased from 100 billion to almost 140 billion since 2014. The present size of India’s economy to $ 2.7 trillion is because of these two reasons. If we consider these two important and related facts the size of the economy has almost remained stagnant, which must be a cause for worry. In other words, India’s size of the economy has not increased during the last nine years as is being propagated by the government.
Politics has made deep road in to the economy which is certainly a cause of worry.
Very often it is said that India is a marketplace of 140 billion people. I think it is a myth. These 100 million poor and marginal classes are certainly not an active marketplace. The size of the economy must be measured in totality.
It clearly bears out that we must have a different strategy where we provide jobs not only to existing unemployed but at the same time draw a long-term broad base plan to overcome this grave issue. The problem is even more severe as there are 80 crores of people who are on government support for food grain. Once grain support is withdrawn or maybe when a Situation arises that we cannot continue this it will only create a huge problem and it will have far-reaching consequences not only in India but globally. It is a serious issue. The only known cure is economic pragmatism instead of woolly ideology. The fact is there is no road map for job creating by the present government. Merely depending on the private sector for jobs is certainly a thoughtless and mindless application and carries a very poor vision by ruling politicians. Let me say that the time is not far from when unemployment will get blasted, may be sooner than later
The facts are this large population has become a political tool for Votes. Our professional politicians should also shed divisive tendencies which split votes into cast and sub-cast lines which is devastating to our country as a nation.
All growth depends on energetic activities. There can be no development without effort, effort means work. In India, we have 240 diverse operational PSU’S of which 175 PSU’s are making profits and contributing over Rs 125000 crores towards dividends to the Government. This means that 70% of PSUs are making profits. Some of them are world-class PSU like ONGC, INDIAN OIL, BHARAT PETROLEUM, COAL INDIA, NTPC, OIL India, NHPC and many more. The total employee strength in these PSUs is over 20 million i.e., 2 crores. Large industries alone cannot provide the jobs that are required. There are approx. 65 million micro small and medium industries in India. The MSME sector is the biggest employer and employs over 110 million. It could be even more. But after demonetization 60000 units got closed down.
Divesting national assets is NOT a solution for a large and diverse country like ours. It takes years to create good and productive assets. My take is, Public sector, private sector, and MSME have to grow side by side to address the unemployment issue. We may be the 5th Largest economy but keeping 100 crores of people dependent without a proper job is not a good sign and is not good for the economy The present set of profitable PSUs were created by successive governments in the last 70 years and no new major unit has come in the last few years. I am of the opinion that the “contribution of dividends” to the government by these Government undertakings should be given back to these companies for modernisation expansion and diversification. This huge dividend pay out and frequent OFS (offer for sale of Shares) should not be part of the yearly budgeted revenue. The public shareholders should be spared and they should be rewarded by way of the same dividend so that market capitalization and valuation are comparable to other global companies.
A vision and an approach paper should be prepared by all public sector undertakings as to how they can become world-class companies and global market leaders. In the approach paper , they should spell out investments and jobs they would create in the next 5 years. The trade deficit between India and China is almost $ 100 billion. It is almost 40% of the merchandise trade. We import from China Electronics, Chemicals pharmaceuticals products etc. There is no visible planning to reduce the same and produced in India to reduce or eliminate this huge gap. Our PSUs are capable and should be persuaded to produce these products in India by diversifying or through new company even if these products may take 5 years to get a proper shape. They have to be persuaded to expand and diversify so that they become world-class companies. This will also greatly support MSME sector which has huge untapped potential. Demonetization had already badly hit the MSME sector and almost 60000 units got closed down
This is an oft-repeated perception that the Indian industry should have a level playing field. It is totally a myth. While the Large industry has several facilities including overseas to borrow at an average rate of 4-5%. Whereas the MSME sector with all the problems borrows at about 10-11% They have to be made competitive by way of various facilities so they are induced to expand and diversify and create jobs
Let me now get into the memory lane as to what we achieved in the last 70 years belying the oft repeated saying by present ruling party that we have not done anything in these seventy years. This gain is nothing but politics. After independence, we have seen India progressing year after year under successive governments till about 2014.
From a nation that was reeling under famine (great Bengal Famine of 1943 where 3.8 million people perished in Eastern part of India India) extreme poverty, shortages, and struggle on every front at the time of independence, India became economic power during these 70 years. From huge food grain shortages and dependence on the imports (Let us not forget US Law PL 480 through which India was importing subsidized food grains from US), and today we can feed 140 billion people. The biggest green revolution unheard and a remarkable achievement. India, also now become a net Exporter of Agri products. Our rail network, from “narrow gauge” track to “meter gauge” to “broad gauge” that connects far and wide of India has become one of the largest railway networks globally. We became the largest milk producer globally Our airports catering small aircraft like Dakota, Avro etc. till the late seventies were mainly flying in major cities and with the passage of time gradually acquired new advanced aircraft like Boeing, and Airbus. From small airports like Dumdum in Kolkata, Safdarjung in Delhi, and Santa Cruz in Mumbai and in many other cities, we gradually built world-class new airports in all major cities across India. which was at the time of independence predominantly from Agrarian society and milk production was largely from traditional cattle rearing.
By 2014 India, became the second-largest cement producer and third-largest steel producer. Name any sector, we will find India has progressed enormously. I am not discussing great institutions that were built including education, scientific and technological institutions, Communication, IT sector, etc, all of them made India proud globally. All these happened in the last seventy years.
The time has come when we should respect our achievements, rather demean it by a bunch of selfish politicians. Our leaders should shed self -glorification and put the nation first and not criticize that nothing happened in seventy years. However, I agree It is just the beginning, and we have still a long way to go and become a world leader in true sense. In the words of Robert Frost, “Woods are lovely dark and deep…. miles to go before we seep”. It applies to all of us as proud citizens. We need to plan what we need to do in the next 50 years, by action and not by tall calls.
What a sad contrast between Sri Aorobindo’s Vision (Mother India is not a piece of the earth: she is power, a godhead.) and the cesspool of degradation to which the present batch of ruling politicians have put this country in the last nine years. Many of them have a vested interest to continue these 80-crore people on free rice and wheat and keep them illiterate so that their survival as a political party remains intact. In the fifties and sixties and even thereafter we had many eminent and gentlemanly people in public life. Not anymore.
As citizens of our great nation, we should be concerned about the present situation. In the words of Nehru in his historic speech in the parliament, we must again “redeem our pledge” to see that we are governed by educated gentleman politicians to serve our great country who think of the nation first and are above selfish goals. It is the duty of all citizens to ensure that it happens.
A bad government is the inevitable consequence of an indifferent electorate. Politics will never be brighter unless and until our citizens are willing to stand up.
In the words of Rabindra Nath Tagore, “Awake arise and stop not till we attain our goal.” Our Goal should be to make India a great democracy, good politics, and a good economy that benefits our citizens and our great mother land.
The Article Is Written By SM Lodha As Guest Writer.