By K Raveendran
First the slogan, then the idea. This has been Mod’s style in all his slogan coinages. Many of these could actually be described as random midnight thoughts. The latest one for the covid stimulus package is no different.
Land, Labour, Liquidity and Law are the four Ls on which Modi anchored his Atmanirbhar Bharat Abhiyan, another uninspiring term, the idea of which has been around since the time of Independence.
As he is wont to do, Modi announced the slogan and left it to Finance Minister Nirmala Sitharaman to fill it with ideas. He also announced the figure of Rs20 lakh crore for her to play around with in formulating a credible package.
As usual, Nirmala Sitharaman came up with a mediocre effort. But to be fair to her, it was an impossible task for any finance minister, least of all the present incumbent in North Block. For, all the Ls in the proposition, perhaps with the exception of liquidity, had nothing to do with a stimulus. Further, breaking down the massive amount into heads and activities that had only remote connection with what must genuinely be integral components of a proper covid stimulus package was itself like solving a riddle.
But apparently, the finance minister was undaunted by the lack of original ideas, a trait that has characterised her entire tenure as the chief manager of the Indian economy. But she was smart enough to pick some of the ideas and programmes already experimented with and distribute the money across the spectrum so as to add up to the total of 20 lakh crore.
But she failed to connect her schemes, if these can be called as such, to Modi’s original Ls, mainly because there was no organic connection. No wonder therefore that the whole stimulus package looked like a hotchpotch.
For instance, there is virtually nothing in the package that organically links to Modi’s first L, that is Land, except for the statement of some pious intentions. The government wants the Indian farmers to adopt new technologies to improve land use and productivity, but there is no direction as to how this is to be achieved. It has been stated that ten lakh hectares of land will be used for growing medicinal and herbal plants for which a nominal Rs 4,000 crore has been provided. The saffron angle of medicinal plants apart, this amounts to virtually nothing in terms of the L as envisaged by the prime minister.
Now for the second L. One of the biggest fallouts of the covid lockdown has been the reverse migration of migrant workers and this should have constituted the core part of any stimulus package. But unfortunately, Nirmala Sitharaman’s and by implication Narendra Modi’s scheme of things had completely sidestepped this vital problem. All that figured in it by way of relief was some form of food ration, which is available to eligible sections of people anyway.
In fact, insensitivity to the plight of the migrant labourers is the most important takeaway from the government’s stimulus package. Modi, along with his ministers and bureaucrats, completely failed to anticipate this huge problem, which is threatening to derail the government’s covid defence as a whole.
Apart from the unparalleled human tragedy in terms of the sufferings, including loss of lives, it brought to a huge section of a floating population, the reverse migration is also set the clock back on the economy’s effort to revive itself as the entire production process has been thrown out of gear, thanks to the largescale displacement of labour.
Although the package may appear to be heavily loaded in favour of liquidity, Modi’s third L, it turns out to be highly exaggerated as only a fraction of the Rs 20 lakh crore is new infusion of cash. Most of it is a restatement of allocations already announced. The worst part is that it has been left to the banks to provide the required liquidity. Banks with their high degree of risk aversion to the target groups will think twice before lending to vulnerable units. It is also possible that a large part of the lendings to the relatively better off units, which the banks would be happy to lend to, could turn toxic, as has been the experience so far.
It is not clear what Modi had in mind when he included Law, the last L in the slogan. The finance minister’s stimulus only has a few references to amendments to certain laws, but it is difficult to imagine how these could be interpreted as a major plank. In any case, it has nothing to do with providing relief to the lockdown affected economic activities or sections of people.
Nirmala Sitharaman’s overarching consideration appears to be to impress the prime minister for having done a job, which is of course important from her personal point of view, but her stimulus falls short of the requirement by far in terms of its effectiveness in reviving demand in the economy, which alone can retrieve the current situation. (IPA Service)