Not a ‘V shape’ Economic condition for India, rather a down falling ‘L shaped’ condition, to prevail

• Shiv Bhatia

While it’s not just predictions, but very ascertained forecasts as well, which say that the Indian Economy is going to further contract by 4% in 2021. The GDP stands at a negative of -23.09% today, being the worst recorded GDP in last four decades. This is going to not just cause economic damages, but a holistic downfall, which will make the country and the citizens suffer much. Can India tag this falling growth rate as an ‘Act of God? Not really! Prominent Economists already pointed out that the fiscal year, which began in April, could see a contraction of nearly 10%, the worst performance since India won independence from British colonial rule in 1947.

Most concerning today is; what good has the ruling government done to the nation in the last six years, and what do they guarantee for the future? India cannot afford such continuous economic failures; the entire effort put in, over years, by great leaders and economists is literally going down the drain.

Actually if we consider the communication and actions taken by the government, it has rather been a legacy & trail of false announcements about growth in various sectors, manipulations that have been portrayed as financial efforts and endless lies which have been decorated with words, to look like a ‘Progressive Government’ and has fooled the citizens all through.

Put in words aptly, by the former PM, Manmohan Singh ji, “If the economy is not expanding, the redistribution of income becomes a zero-sum game. And therefore, all the class struggle - and it becomes much more vicious.” If such economic failures prevail, in continuity, the country will be in a vicious circle of financial crises.

Name the sector, and it has had a downfall, over the years. Demonetization literally slumped the economy of India. It left the businesses and citizens stranded, with a ‘No go back’ situation. Every entity craved for a stable life over these years, and then the government implanted the seeds of further deterioration of this country. To top it up, we had the GST bill launching, which made the system complex and destructed forever. The inflation rate has been growing at a 6.93% lately, with no positive impact, rather has caused pinching effects, making every non-luxury commodity also, expensive for consumption.

The quickening of inflation can be particularly destructive for emerging markets as it pulls down the real yield premium that compensates investors for holding riskier assets. Increasing price pressures also hinder the ability of central banks to cut interest rates, which may further complicate the process of recovery from the coronavirus pandemic.

We divide the population in terms of earnings and purchase power, but rising inflation has caused every kind of citizen to reduce spending, contract business, and overall, has led to degradation of small and medium size business. The unorganized sector expands to 39 Crore Indians, who have no line of action in the coming future with respect to their wage earning or a definite industry to which they belong. No job security or growth perhaps. Unemployment rate stands at around 17% today but fell to a 23.5% in April. These are the noted records, whereas the reality of both, rural & urban spaces is that the people have lost jobs drastically. They have no money to meet their basic needs, and the government has failed to even record this, forget supporting the unemployed, even noticing them has not been efficiently performed.

Apparently, the government took assurance of feeding the waged laborers who lost their jobs. But the reality is that an Endless count of laborers is still dying of hunger. Calling India’s Rs. 20.9 lakh crore stimulus inadequate in providing for recovery of an economy pummelled by COVID-19, former RBI Governor Raghuram Rajan has said the package gives free food grains but migrant workers, rendered jobless by lockdown, need money to buy milk, vegetables and cooking oil and pay rent. The world is facing the greatest economic emergency and almost any resource is inadequate, he said.

With so many failures and more lined up, the only thing that the government has promoted is, fake affirmations about how ‘India will reach new heights’. Not just economic factors, but disoriented and hateful relations with the border nations and cold war situations will definitely lead to slowdown of the growing economy. We had been a powerful nation, progressing with the world, as we became a globalized economy. But with all our relations being irreversibly spoilt by the BJP agendas, India will not be able to make peace with countries, and eventually we will be another country where wars are common.

While we point out the inter country relations, with respect to China, Nepal, Bangladesh & Pakistan, it is unfortunate to remember that we have painful scenarios in Jammu & Kashmir, too. Every day the news flashes: terrorism at hike, blasts and curfews, in Srinagar. The no Internet era was prolonged for months in Kashmir and even in January the state was given a 2G service, without access to Social Media.

A very powerful theory states that every nation, after facing the repercussions of the pandemic, will show a ‘V shaped’ economic condition, which depicts, falldown of economy, reach its trough, and then gradually getting back to growth. For India, due to the inappropriate hasty decision making, the economic condition is likely to be and remain, ‘L shaped’, for years, the powerful growing economy started falling over these years, and reached its trough during 2020, due to the pandemic, and is estimated to suffer through a long future.The country already had issues like that of over population, high illiteracy rate, unemployment & more, and the government couldn’t have invited more trouble, by making wrong lockdown decisions, and implementing impractical regulations, during this pandemic.

The lockdown should have been enforced, slowly, by preventing sections of the country from being exposed to the virus. A better approach, keeping science, technology, graphs, advice from economists, would have all made sure that India, has its peak, but begins to heal and grow out of the harsh conditions of the corona virus.

It seems like the government just wanted to take ‘temporary credit’ about locking down the county and taking action, not caring about what would happen ahead.

The number of recorded positive covid-19 cases in a single day, in the country are above 80,000, today. This situation will worsen and cause harmful effects to families, businesses, citizens and the country.

The former chief economist of the IMF said ways have to be found to give relief to people and companies affected by COVID and the ensuing nationwide lockdown.

“We got to repair places in the economy that need repair. This includes some of the big firms, this includes banks, and of course this includes MSME. We need to provide for recovery that means some kind of stimulus so as to get the recovery going. And we need reforms.” said Raghuram Rajan.

Failure of planning the requirements of ventilators initially, improper handling of the covid-19 spread, within states, unlocking the states without any planning, has all led to India becoming one of the largest hot-spots of the disease with over 35 lakh recorded cases. Looking at the situation currently, realistic figures may have crossed Brazil and USA.

Looking at this situation, there is no ray of hope, no silver lining as to when the country will overcome the pandemic.

India’s educational progress, financial growth, healthy border relations, and successful globalization, can be seen on a graph, falling down continuously over the last few years. It is hurtful to see how criminals are being saved by policemen, lately the encounters of UP, show how victims are killed just to ensure that the truth of the governing parties does not come out. Human life is taken for granted, every political tension in Rajasthan, Mumbai, Bihar and other states, is an unfortunate credit to the BJP.

The government is playing discretely, with its focus lying in ‘disrupting’ and ending the ‘informal sector’ which gives India 90% of its job opportunities. The Government wants to shift the gains and divert these earnings to themselves. Marketing, Media, promotions; all play an important role.

With such a situation prevailing, the most apt would be that the citizens’ wake up, and see the true numbers, analyze how they have been fooled, over and over. The country needs a progressive, motivational, example setting leader and a powerful political body, which stands by its decisions, and has logical way of implementing any processes.

The light that guides a nation is always the one, which comes from the enlightened!

We cannot progress alone, the country has to grow with ‘brotherhood’ and healthy relations with the entire globe, standing string for itself, but making best use of global resources too. Launching an ‘Aatma-nirbhar’plan is the degradation of any and every good relation which was build up with other countries. This kind of philosophy will not take India far.

The author is an AICC Member