By Krishna Jha
A sense of gloom is swallowing up all the glow there is in the Indian economy. The noticeable among them is fall in the consumption pattern. Among the factors leading to such dire miseries is absence of jobs. That, in its turn, has led to fall in the capacity to buy even the essentials. Inability to meet these basics makes the quality of life frustrating.
For those from the lower depths, meals have started shrinking. Reason is not lack of food, but a steep fall in their purchasing power. Those who grow food are no better; they too are starving. They have been forced to lower the prices of grains because there is no adequate minimum support price; whatever the middleman offers they accept. They cannot recover even what they have spent.
Debts and their interest remain unpaid. Farmers are pushed to the wall with only option left, to end life. Diminishing farm income has other impacts too which include migration, towards non-farming sectors.
The non-farm activity is also in the grip of crisis. Downward trend in the affordability can be traced to nearly 30 per cent drop in capital expenditure by the government in the June 2019 quarter. Then there is the falling growth rate in the GDP which has never been so low. Meanwhile the entire economy suffers from slow down. In our country, economic activity itself varies state wise, sector wise and influences the issue of employment.
In manufacturing alone, according to data available for 2017-18, while the share of Bihar was just eight percent, for Gujarat it was 33 percent. As the Periodic Force Employment Survey (PLFS) has pointed out, the total employment share in manufacturing for Bihar was nine percent and for Gujarat, it was 20 percent. The rate of slowdown is not evenly spread out.
According to the Annual Survey of Industry (ASI), such varying results have their own diversified influence. Like the three states of Gujarat, Maharashtra and Tamil Nadu have the claim on 40 percent in the total share of production and employment, but there is hardly any visible impact of slowdown in Bihar and such other states, since economic scenario is perpetually grim here.
With manufacturing, comes the investment issue which has constantly been registering decline. Ever since the purchasing capacity of the common masses started to fall, consumption demand started thinning.
There is the clear threat that the falling rate of investment activity may not be revived soon as manufacturing sector has ceased all its optimism. In most of the manufacturing units too, confidence level has gone down.
In its April-June 2019 Industrial Outlook Survey of the Manufacturing Sector, the Reserve Bank of India brought out that out of 1,231 manufacturing companies surveyed, only 31.6 per cent of manufacturers were hopeful about an increase in their order lists which has now touched the bottom, the lowest in nearly a decade.
The old projects that were started earlier, now face crisis. Of the 65 ongoing projects under Public Private Partnership (PPP) mode monitored by the ministry of statistics and programme implementation, there were 37 initiatives declared as delayed as on May 1, 2019, causing a cascading impact on payment schedules that has brought an element of risk in the viability of projects.
Interestingly, Forbes, in its list of world’s richest persons in 2008 had named Anil Ambani as the sixth. But after ten years, time has taken its toll, and his companies have been sliding for all these years, into distress and possible default. The rot started with Reliance Communications and spread to Reliance Infrastructure, Reliance Power, Reliance’s defence companies, and finally to Reliance Capital.
Reliance is followed by other such shining business stars, among them are Essar, Zee, Jaypee, Ranbaxy, Jet Airways, Videocon, each one getting crashed.
Simultaneously, there is a growing attack on public sector units, especially banks, As early as in 1990s, after the new economic policy opened the doors, and the restrains were taken off, there was growing concentration of resources preparing the grounds for privatization of banks. But the entire initiative was stalled, and saved our country from Melt Down that had engulfed almost the entire world in 2007.
It was those who could assess future, had resisted the step, and disaster could be prevented. These were the same Left and democratic forces that have the rich past of glorious struggles against injustice, and a present, marked with country wide movements in which crores of common masses are taking part.
The times of despair have come back. There is chaos everywhere. Banks too, along with every public sector units, are facing the threat. Each and everything noble is at stake.