A recent event made me remember something similar from my childhood memories. The day my results used to come in those early school days of mine, I used to plan carefully of how to defend myself while declaring the results at home. One very easy strategy was to tell my mother that everybody in the class had got less grades in a particular subject in which I had not fared well.
To make my point I used to add a few names, known to my mother as my classmates, as the victims of the same injustice that was done to me. However, never ever would I mention the names of the ones who had fared well in the same subject. That could have made my defence collapse then and there itself. Initially this great tactics worked well, but then it started failing miserably.
Now, the cause of sharing this sweet childhood remembrance? A speech. A similar tactics. A failed attempt to hide one's failures - "(A series of events) are now sharply pulling down not just the Rupee, but also the Brazilian Real, the Turkish Lira, the Indonesian Rupiah, the South African Rand and many other currencies". This statement was made by an "aggressive" PM on the floor of the Parliament on 30 Aug 2013. First of all, I have dealt and written enough on the issue of so-called "aggressive" and "wonderful" speeches of Mr. PM in one of my previous posts appropriately named "When Lambs try to sound like Lions". However, what I see in this speech, especially at a time of utter despair and disappointment in the country on issues of inflation, account deficit and overall economy, is the sheer pessimism and helplessness for a citizen on a day when the GDP figures for the first quarter of this fiscal year are released.
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Coming to the specifics of the statement. It doesn't help Mr. PM in any way - in trying to get away with the incompetencies of UPA - that along with the Indian rupee every other currency he mentioned was having a free fall. If even after all these years of being ruled by an "Economist" like him we are comparing ourselves with Indonesia and Turkey (thank god he did not mention Pakistan) then God knows what Mr. PM has actually brought on the table for this country during his tenure.
Secondly, he says "On May 22, 2013, the US Federal Reserve Bank indicated that it would soon ‘taper’ its quantitative easing as the US economy was recovering. This led to a reversal of capital flows to emerging economies which are now sharply pulling down not just the Rupee, but also the Brazilian Real, the Turkish Lira, the Indonesian Rupiah, the South African Rand and many other currencies". Why is shying away from mentioning currencies like JPY (Japanese Yen) which have not taken a free fall due to the reasons stated above? Is it fair to have selective observations in a speech being delivered in the Parliament to deceive people of this country about the pathetic state of Governance which UPA has unleashed for India during the last decade?
Going forward he mentions - "Many foreign analysts worry about banking problems that may arise in the wake of the currency crisis. The Indian banking sector has seen some rise in bad loans". Now that's a daring statement to make. Because, if he remembers clearly UPA 1 had famously gone with its 52,275-crore loan waiver scheme just before elections. A few years into UPA 2 and it is revealed that around 34 lakh farmers (out of 3.45 crore) did not get the waivers and another 24 lakh parties got undue waiver of loans which amounts to another good amount of SCAM (Read Here) which now Mr. PM explains very casually in the parliament. If these scams (read Coalgate, 2G, CWG, Choppergate etc. etc.) and doles for votes are not responsible for the current economic distress of ours then who is? USA? Dollar?
Further he puts - "In 2010-11 and the years prior to it, our current account deficit was more modest and financing it was not difficult, even in the crisis year of 2008-09. Since then, there has been a deterioration, mainly on account of huge imports of gold, higher costs of crude oil imports and recently, of coal. On the export side, weak demand in our major markets has kept our exports from growing. Exports have been further hit by a collapse in iron ore exports. Taken together, these factors have made our current account deficit unsustainable large". On a lighter note, I am glad he did not say that import of LED TVs have made our fiscal deficit increase manifold as this was quite evident from the recent measures taken by the Government.
However, just to put on record, in 2008 India's fiscal deficit was $70 billion, in 2010 it was $81.9 billion and in 2012 was $88 billion. With an increasing figures like these if Mr. PM is so worried and aware about the fiscal deficit why did he not oppose the Food Security Bill at this time of crisis? Industry mood is at all time low and he is anticipating at a reduction of CAD (current fiscal deficit), that too a whooping $18 billion? Wow!!
Well, there are several other points to rip apart in his speech but the real pessimism comes out of the fact that there's literally nothing in it that could lift the mood of a common man. Inflation will certainly rise in coming months. May be especially drafted Onion security OR a Vegetable security bill might be brought to save us from the mess we have been put in. There's nothing on loss of jobs and rising unemployment.
Track record of UPA's so-called "inclusive" growth has been almost without any rise in employment numbers. What about that? Who is responsible and who will fix? Probably, immigration policy makers of USA.
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For coming few more months and, hopefully, extending to not more than a year from now the days when GDP numbers will be declared will be the Great Days of Pessimism (GDP) for majority of the people in this country who work hard for a decent life. All of this because we chose the wrong side, TWICE.
Thanks,
Prateek
Well said GDP : Great Days of Pessimism. Good analysis of PM speech
ReplyDeleteA simple question to you, Prateek. If BJP or any other party than Congress was ruling, would the economic situation have been any better?
ReplyDeleteWhen we accept the neo-liberal policies, the consequences are precisely these: ever-widening rich-poor gap, the gdp graph swinging up and down rapidly according to global markets...
I do not agree with the global condition argument sir. That's another example of shifting blame. Especially when good GDP figures are boasted to be done by UPA and not accredited to global conditions while only the slump is blamed on the whole world. I work very closely with people based in US (citizens and NRIs both) and trust me they are really on a good rise at this time in every aspect. That shows what globally is the condition today.
DeleteAs far as your question is concerned, I believe if we compare the track records of NDA and UPA we get a clear answer that YES the conditions could have been better without Congress at helm.
Read here
http://www.hindustantimes.com/India-news/NewDelhi/NDA-created-more-jobs-than-UPA-did/Article1-1080343.aspx
what UPA has done (or not at all done) for job creation. Figures say it all. They are not even able to create total number of jobs created in 5 years of NDA rule during their decade long rule.
Now, when I say that unless you create jobs, and include more and more people in employment sector, how will the rich poor gap come to a closure then you know that's a logical argument to make.
Also read here the state of basic infrastructure building targets that UPA has achieved.
http://articles.timesofindia.indiatimes.com/2013-07-02/india/40328372_1_national-highways-state-highways-total-road-network
The fact that BJP centre and state governments fare well in economics is due to the fact that they concentrate on infrastructure projects more than dole-outs. This makes sense for robust economy since such projects are an all round schemes for job creation, investments, money &material inflow etc. and thus better than populist schemes like NREGA, which are factually more of a burden on economy than a boost.
There are other aspects too. But I shall have a separate blog post for that :-)