By Chidambaram N
The Left parties — CPI, CPI(M) CPI(ML), Forward Bloc and RSP — are holding a joint convention on September 20, 2019 in the national capital to chart out a protest action programme against the deepening slowdown and huge loss of jobs in almost all the sectors. The half-hearted measures that the government is taking will only worsen the situation and add to the miseries of the people on the eve of the festivals’ month that is fast approaching. The retail inflation has already started inching up and touched a 10-month high of 3.21 per cent in August, according to government’s own data released on September 12.
Unfortunately, the present-day policymakers as usual are busy raking up already settled matters and non-issues with the sole intention of sidetracking the public minds from the real issues. The Union finance minister Nirmala Sitharaman repeatedly avoids a direct answer when she is confronted with questions on the deepening economic slowdown. Yet she comes out with a slew of measures — rollbacks, concessions, pumping in of RBI reserves into the economy and so on. All these only confirm that the slowdown is much deeper and wider than what one can imagine. Will the government dare to come out with a white paper on the state of our economy and prove that the critics of the government’s policies are wrong?
The Union finance minister comes out with a set of figures to prove that the economy is doing well. Even though public memory is very short, it is too early to discard the confession made by Modi government’s former Chief Economic Adviser Arvind Subramanian that the government’s growth claims are overestimated. He only reflects the ground reality that life is turning more and more miserable under Modi2.0. Hence, however the finance minister may try to dispel the truth on the dwindling economy, she will not succeed. Nor the economy itself is going to yield to her cosmetic approach and overnight turn into a revived one.
Worsening the woes further, as revealed by the tax authorities on September 19, the advance tax mop-up is posting a dismal growth in the first half of the financial year, again confirming a deepening economic slowdown. The overall advance tax collection, including corporate and personal income tax grew by mere six per cent between April and mid-September as against18 per cent in the year ago period, says the report. Direct tax collection has seen a growth rate of only five per cent so far this year, which means that collections will need to expand by at least 27 per cent in the second half to achieve the budgetary target of 17.3 per cent growth. To quote a government official, “the revenue collection remains grim on account of the economy expanding lower than expected, impacting key industries. If the situation does not improve, meeting the collection target will be impossible. ”Unfortunately no silverlining is seen anywhere to have a sigh of relief. If so from where will the government get money to revive the economy and create more jobs.
A close observation and reading in between the lines of the announcements made by the government clearly indicates that the government does not have any clear-cut package agenda to stimulate the economy. The trust, confidence and federalism that ruled the roost in the economy for decades have been dislodged by Modi in six years. The plan to hold Dubai-like Shopping Festivals in India and the package to boost housing sector have only disappointed the markets. The players in the realty sector feel that the fund to help completion of stalled real estate projects has only limited impact.
Adding fuel to fire, the prices of petroleum products are set to get fuelled up. The attack on Saudi Arabia’s Aramco oil refinery has the potential to unsettle the apple carts of not only the oil kingdom but oil consumers across the world, particularly in India. A fuel price increase is the last thing that the Indian economy can deal with at the current juncture. The immediate impact of drone attacks on the Saudi Aramco-owned Khurais oilfield and Abqaiq oil processing facility has been the suspension of more than half of Saudi Arabia’s daily crude oil output, thereby affecting contribution to global supply. The Union Petroleum Ministry has sought to allay fears of a supply cut by relaying messages of assurance from Aramco officials, but there is already an indication that crude prices would rise further due to an increase in the risk premium, leading to increased fuel pump costs.
Oil analysts say that the damage to the important refinery is much more serious than originally thought and it could be months before normalcy is restored there. The longer the processing facility remains disrupted, the larger the potential impact on actual crude flows will be. Although it is being said that the global flow of crude oil will not be disrupted immediately, “the longer the processing facility remains disrupted, the larger the potential impact on actual crude flows will be”.
Modi, Nirmala and Co must beware of Economy the Stupid which in no time pays back in the same coin when it is treated in the most stupid way with arrogance, half-hearted measures and with a hidden agenda. Also Modi, Nirmala and Co must read the writing on the wall which warns of fast-approaching recession and deceleration, the symptoms of which are already visible in rural economy, urban economy and markets. It must be noted here that the ‘mesmerizing’ slogans of ‘One Nation, One Constitution’, ‘One Nation, One Tax’, ‘One Nation, One NRC’, ‘One Nation, One Language’, etc, may electrify RSS and its affiliates to resort lynching and other despotic ways against the Dalits, Muslims and other minorities but in fact are meant to divert the attention of masses from their real problems.
The working sections of our people along with the unorganised sector employees are already on the streets. The Left initiative to coordinate and lead the suffering masses with an action plan will definitely bring some succor, injecting a sense of confidence to unleash more and more struggles against the anti-people policies of the government. (IPA Service)