THE new India, Modi’s India is increasingly looking alien. A bizarre spectacle appears to have hit the country like a tornado. The lynching of people in the name of cow protection by private armies with adequate ideological bluster had dotted a bloody trail across the length and breadth. Armed with the new tools of social media, of photoshopping, fake news, whatsapp forwards lynch mobs can now be actually organised. The obnoxious culture of aggressive trolling has further sharpened the effectiveness of aggressive hate mongering through spread of rumor and hearsay. This is evident in the latest ruse of ‘child lifting’ which is reportedly leading to unleashing of a mass hysteria which takes its toll on human lives. More often than none, it is the weak and the vulnerable, the migrant worker, the vagabond and the beggars that are the easiest prey of this dehumanisation.
ECONOMY IN SHAMBLES
Why has such an atmosphere of anarchy set in? Why have the sections of the people become so susceptible to rumors and hysteria? The answer lies in the great degree of uncertainty in the overall economic, political, social and cultural life of the people.
In a democracy, the confidence of the people in the nation and themselves flow from the government’s ability to implement ideas and programmes which they have promised at the time of elections; obviously, those which were made to address the challenges and concerns that people faced at the time of elections.
The major concerns which shaped the historic mandate in 2014 were primarily those of employment and other vital questions of livelihood both in urban and rural areas. The question of corruption in high places which was seen to be eating into the vitals of social and national life was also an extremely important factor.
The last four years have proved to be a complete betrayal on the commitments on those very subjects. Not only were the huge hopes created dashed, shamelessly the top brass of the ruling dispensation confess with impunity that those promises in the first place were ‘chunavi jumlas’!
Since then the government’s claims over the functioning of the economy can be best described by that very expression-‘jumla’! However, it has to be understood that there was a pattern in the madness; this was perfected to camouflage the real intention of the government. The government, perhaps never before since independence has been so brazenly pro-corporate. It is in this key character that much of what has happened can be explained; the non-fulfillment of commitments on public concerns and evidence of major corruption that is tumbling out of the government’s cupboard based on ever increasing nexus between the highest political hierarchy and the top corporates. Actually, in a neoliberal trajectory cronyism is an inevitable outcome. The last four years under Narendra Modi have been no exception; in fact it has essayed some of the most galling instances of swindling of public money and assets for the benefit of chosen corporate cronies.
With jobs and livelihood under threat, the all encompassing sense of uncertainty is being sought to be channelised into avenues of polarisation, and creating an atmosphere of suspicion, hate and hysteria.
The economy despite the manipulation of the methodology to calculate GDP has shown continuously declined from 8 percent in 2015-16 to 6.5 percent in 2017-18. Statistics from the government’s own labour bureau show that for the first time since independence, absolute level of employment has shrunk. The situation is so damning, that Modi has now claimed that the problem is not unemployment, but that of data on employment after the government itself having stopped collecting such data. A similar situation prevails for data on farmers’ suicides. Industrial production agricultural production, as well as, those in the service sector has remained sluggish and dismal.
The burgeoning magnitude of non-performing assets which was there during the UPA government itself have ballooned from 2.6 lakh crores in December 2014 to 8.37 lakh crores in September 2017. The single most important factor for this terrible condition of the banking sector has been the government’s refusal to take stringent actions on corporate defaulters. The case of Vijay Mallya and Nirav Modi are the most eloquent symptoms of this promotion of crony interest. The situation was particularly aggravated by demonetisation. With huge deposits forced by extinguishing of large currency notes, banks suffered low credit take off in the prevailing atmosphere of economic sluggishness. The interest burden on the banks further eroded their profitability.
But, instead of initiating meaningful action for recovering the huge defaults by corporates, the government ensured waiving off such defaults to the tune of almost Rs Four lakh crores over the last four years. In between the government has also tried to also push the FRDI whereby the burden of such losses of banks were sought to be passed on the depositors themselves.
The latest in the saga of government’s unsavory handing of the banking sector crisis is the facilitation of takeover of majority shares of the IDBI bank by the public sector insurance behemoth, LIC. Of all the public sector banks which have been squeezed dry by runaway corporate default, IDBI has the largest toxic NPA. Between NPA and stressed assets, IDBI bank accounts for Rs 1, 10, 000 crores. With LIC infusing equity it will lead to cash out go of almost Rs 9000 crores from LIC.
LIC already has stake in each of the 21 public sector banks; with more than 10 percent stake in 6 and more than 9 percent in 10. In 2015 and 2016, LIC bought preferential share issue of many banks. This is despite the fact that the LIC does not have core competence in banking business. The contagion that has hit the banking sector may as well affect the insurance sector.
What is more important that the money LIC is investing in IDBI bank is not government’s money; it is the hard earned savings through premiums that is being forced to pay for the delinquent corporate behavior. This will serve the purpose of shedding the government’s exposure to this toxic default affected entities, allow the government to achieve its disinvestment targets. It is amply clear that private investors do not have the inclination to increase their exposure in this uncertain atmosphere. Therefore, a similar exercise was undertaken earlier to force the erstwhile cash rich ONGC to pick up equity in HPCL and later the scam tainted Gujarat State Petroleum Corporation, so much so, that a debt free Navaratna has now become indebted. The obnoxious saga of GSPC is an episode itself to demonstrate how the bombast of Modi magic and Gujarat model was thrust upon the nation; with the CAG detailing out the terrible record of fraud and cronyism!
Similarly, the uncertainty in the economy is yet again vindicated by the refusal of private investors to buy Air India. Despite waiving of huge debt for the company, there were no suitors possibly to further pressurise for making it completely debt burden free.
DEMONETIZATION: TISSUE OF LIES HAS COME UNSTUCK
The latest data released by the Swiss National Bank has squarely called the bluff of Narendra Modi claims that ‘even every child in India knows that black money is stashed in Swiss banks’! The bank has released data to show following demonetisation, the deposits from India have gone up by 50.2 percent after showing a downward trend in the previous two years. Having hit by this revelations, the ministers are now acting coy! The claim now is, there is now no proof that all these increased deposits are necessarily black money!
That demonetisation was a smokescreen for launching the ‘anti-black money crusade’ was quite apparent; for the simple reason that a very small proportion of black incomes and accruals are kept in the cash form. That the government did precious little on the two episodes of Panama papers and Paradise papers was ample testimony. Neither was the government interested in tracking wealth flows through tax havens! Therefore, the chickens have come a full circle to roost!
Earlier there have been murmurs on the BJP investing cash (of big notes) through major investments in banks just in the run up to the big bang demonetisation announcement. But, these were dismissed as ‘conspiracy theories’ by the government brass amplified by sections of the corporate media.
But, now more damning evidence has hit the news. An RTI query has revealed that the cooperative banks of Gujarat which was shepherded by top BJP leadership including Amit Shah, had recorded unusually large deposits in big notes in the first five days following November 8, 2016. This was so alarming that RBI had stopped the cooperative banks in the whole country from accepting extinguished currencies causing great distress in many parts, particularly in Kerala. The reply clearly shows that Ahmadabad District Cooperative Bank, of which Shah was the chairman and continues to be an active director, recorded a deposit of Rs 745 crores. Stung by the implications of this explosive disclosure, the government made NABARD to come in the defense of ADCB. NABARD’s claim was that 98.6 percent of these deposits were less than that of Rs 2.5 lacs. Inadvertently, it admitted that 1.4 percent of the depositors who number about 200 must have deposited huge amounts. It is not the average deposits, but the astronomically high amounts by these few are of real interest and concern. But, the government as usual, is reluctant to have any independent enquiry. It is clear that since agricultural income is not taxed, efforts would be there to pass such high deposits on account of agricultural income. Therefore a probe would be very much in order.
There is no doubt that the single point pro-corporate rationale of the management of economy by the Modi government has created not just uncertainty, but pushed the entire economy down the barrel. It is now hurting the people real hard. With the external debt burden going up as such and as a proportion of GDP, the downslide of rupee is sharp. It is bringing imports, which were already showing signs of economic sluggishness have come under great strain. The oil imports and foreign debt burden will also go up sharply eventually reflecting on the purchasing power of the nation and the people. That the agrarian and the unemployment crisis are ravaging the working people is crystal clear. What is now becoming obvious that the ‘crusade against corruption’ was a sham! In fact, the crony interest driven acts of the government have only aggravated people’s hardships. Doubtlessly they will rise collectively against the fraud that they have been made to suffer by the Modi government.