It is a craze now to correlate Narendra Modi with development. Those who support him are labelled as progress oriented. Those who oppose NaMo are considered as anti-national as well as divergent to development. But it is commendable that no one has thought of discussing his economic policies.
As the chief minister of Gujarat, he has always boasted of being the only man behind the development of the state. Several impressive pictures of him in various backgrounds of solar panels, dams, highways, etc. have been promulgated in all forms of media. He is getting massive support from the general public as well as from various prominent personalities. Recently, retired Supreme Court Judge Justice V. R Krishna Iyer (Minister of Law in the first Communist Government in Kerala under E.M.S Namboothiripad) announced that he will support Modi if he accepts seven agendas put forth by him. He sees Narendra Modi as a socialist. Contrary to this, famous writer Prof. U. R Anantha Moorthi (former V.C., Mahatma Gandhi University, Kottayam) announced that he will leave India if Modi ever became the Prime Minister.
We have heard so many political comments from him and about him. Many Indians consider him as the person having the panacea to cure all political and developmental illness of the country. His superman-like rescue of 15000 Gujaratis in just three days from Uttarakhand went viral in all platforms of social media. As a Prime Ministerial candidate and somebody who wants to replace a prominent economist like Manmohan Singh, we need to hear more from him about his economic policies keeping in mind the appalling condition our country is in economically and financially.
Macro-Economic Condition in India
India is in deep economic and financial trouble and even the renowned economist trio Manmohan – Ahluwalia – Raghuram Rajan is finding it difficult to manage the situation.Key economic issues faced by our country are the Current Account Deficit (CAD), Inflation and the Devaluation of Rupee. Mr. T. C. A Ranganathan, Chairman of EXIM bank recently commented in an interview that the decline in growth of the manufacturing sector in the country was the main cause of CAD as it forces the country to reduce the exports due to lack of products which finally leads to increase in imports of these products which include both capital and consumer goods from other countries. Inflation in the current situation is mainly due to the hike in the price of oil and other essential commodities. Over-enslavement of the Dollar due to pro-American and pr0-liberalization policies is the main cause for devaluation of our currency. As a country facing so many issues listed above, the common people are praying for the arrival of a saviour.
Will NaMo become the saviour or will he become a destroyer as considered by the other half of India?
As a member of the BJP, we all understand the pressure on him to follow the political and economic thinking of the party. Basically, the BJP is famous for their pro-American and pro-liberalization attitude as far as political and economical realms are considered. It is a known fact that NRIs in America fund the BJP significantly well. Many allegations exist about a charity organization in USA called the India Development Relief Fund (IDRF) for funding Sangh Parivar organizations. To satisfy USA and its financial allies like the World Bank and International Monetary Fund, they pursue liberalization policies by the wise economist Manmohan Singh. In the period of their rule, phenomenal disinvestment in Public Sector Undertakings occurred. For this purpose, they even engaged an exclusive minister- Arun Shourie. I’m sure all of you remember the sale of NTC (National Textile Corporation) land in Mumbai, sale of shares of profit making PSUs like Maruti, Hidustan Zinc, Modern Bread, Ashoka Hotels etc. All these incurred huge loss to the exchequer (and ultimately taxpaying Indian citizens) in terms of money as well as assets. Even at times when they were in the opposition bench, they have given support to Congress for their liberalized economic policies. On each occasion when the bills related to liberalization or globalization are placed in Parliament for voting, BJP supports the Congress government openly. Insurance Bill, Pension Bill, FDI in Retail, etc. are some examples that come to my mind. Politically BJP and Congress differ in many things. But their economics is more or less the same which is why both parties get huge funds from all major corporate houses.
For ensuring growth in manufacturing sector, the banking rates should be made more affordable. An increase in the loan rate affects the Micro, Small and Medium Enterprises (MSME).
Due to a corrupt political and executive system, a lot of time gets wasted in getting clearance for starting a manufacturing unit. Acquiring land, ensuring water supply and electricity, measures to control pollution, availability of skilled and unskilled labour, etc. are some of the hurdles faced by such people. A single window clearance system has become a necessity now to avoid such delays. To maintain the sustainability in growth, the government should help these people till they can stand on their own feet.
Import of cheap goods from China and other developing countries is building pressure on our Indian counterparts which is leading to the eventual collapse of their manufacturing units. In Gujarat, Modi has always claimed to be adopting helpful policies to enhance the manufacturing sector and aiding industrial growth. But in our knowledge, the main beneficiaries have been corporate houses like Adani, Reliance, Essar, Tata Motors (Nano Plant), etc. Thousands of crores have been given to set up big industries there. Even though growth of corporate houses is essential for increasing the quality of standardized products and services, it is the MSMEs which create more job opportunities than corporate houses. But they are least considered by all governments. Most of the state chiefs are on the side of the corporate houses.
Will he change the policy?
Inflation and the Devaluation of the Rupee
For reducing inflation the easiest method is reducing the oil price. The pricing criterion adopted by our oil companies is misleading as well as inappropriate for a developing country like India. The concept is called under-recovery. According to the concept, our refineries and marketing companies should get the same price for the petroleum products refined in other developed countries. That is, if crude petroleum is refined in a developed country, the output price which those refineries claim should be the price of crude petroleum refined in India. So the output price of petrol produced in Singapore and produced in India should be same in their argument. As the cost of constructing a refinery, cost of labour, cost of transportation, etc. is very low in India, why is the Ministry of Petroleum practicing such a policy?
The taxing system of oil products in India should also be rationalized. From refining points to marketing points the state and central governments are getting huge amounts of money in the form of taxes as the products are considered as essential goods.
Will he reduce the tax?
The conversion rate of the Rupee to other currencies has remained volatile since India hugged liberalization in 1990s. But the decline of the Rupee from 45 to 68 per dollar is the by-product of evil practices like currency trading. The conversion rate of Rupee with respect to other currencies has to be stabilized. Measures like importing more oil from Iran, stopping unnecessary imports from other countries, etc. will help control the same. Since more than half of the people living in the country are considered as poor, mixed economy is better than extreme capitalism or communism. But those leaders who have an affinity towards the USA; their main agenda is to satisfy that country even if it supports terrorists of Pakistan to act against India.
Here comes a question then; will he pursue a mixed economy or go behind privatization blindly?
India’s import of oil comes mainly from Saudi Arabia, Iran, Venezuela, UAE, Iraq, etc. When the Arab countries nationalized petroleum refineries in their respective nations, USA forced them to fix the oil price in Dollars which helped America to control the currency markets. So essentially, importing oil from Arab countries makes our currency more volatile due to this Dollar connection.
Iran, due to the sanctions imposed by US and its allies, is in a difficult position which helps India in a way that the importing of oil can be reciprocated with payment in rupees. The amount in Rupees deposited in their account in India is used by them to buy essential goods from India. But due to pressure from the US, India took a foolish decision to reduce the imports from Iran a few months back for which we have paid enough prices. After the tumble of currency to all time low of more than 68 per Dollar, our policy makers have taken some feeble action to import more oil from Iran. In the future, the US will continue to put pressure on us.
Will he take steps to import more oil from Iran?
China: Friend or foe?
China is considered as the number one enemy of India in military power as well as economic power by the BJP and its allies. If we can settle the border issues with China amicably, India will benefit massively. If both countries can cooperate using platforms like BRICS (cooperation between Brazil, Russia, India, China and South Africa), the ruthless America which has created and supported terrorist activities in the whole world; the father of the Al-Qaeda and Taliban, will surely learn a lesson.
Will he take more steps for cooperation with China or will he remain as an ally of USA?
Corruption and Procrastination as a policy
In our Parliament, BJP and its allies recently raised their voice for naming people who operates accounts in tax havens. The names which were leaked exposed names of many of our political leaders and corporate houses. But the Government has taken no action so far. Procrastination is adopted as a policy by Manmohan Singh and UPA 2.
Will he take steps to retrieve the black money blocked in tax havens or will he continue with the policies of Manmohan Singh?
The Dharma of Capitalism
In his book ‘The Dharma of Capitalism‘, Nitesh Gor put forth three modes of business: Mode of Goodness, Mode of Passion and Mode of Ignorance. Enlightened, steeped in knowledge, balanced, regulated, principled and selfless are the qualities of those who operate in the Mode of Goodness. Intense, active, proud, exploitative, greedy, erratic, capable and accomplished are the qualities of those who pursue the Mode of Passion. Inclined to laziness, procrastination, dependent on others, susceptible to corruption, etc. are followed by those who are in the Mode of Ignorance. These three divisions are applicable to political parties and personalities too. Those who work for short term gains and ignore the long term setbacks of such ghastly actions are considered as following the Mode of Ignorance. Creation of vote banks, corruption, giving unnecessary benefits and help to the Mafia, killing of political opponents and persons of other religions and castes, etc. are such short term beneficiary actions which have negative effects in the long term. In the case study of a company in which the author worked as a consultant, he gave an example for an action in Mode of Goodness. The director of one US Company wanted to register in the Cayman Islands (a tax haven) instead of the United States to evade tax. Later he changed his decision due to the intervention of the author. After the incident one of the directors commented, “At least we can sleep at night”.
NaMo has already paid the price for his inaction during the communal riots in Gujarat. His close aides were arrested and jailed. The question is whether he has truly changed in his mind to be in the Mode of Goodness or is he still in the Mode of Passion?
All BJP leaders talk about Dharma. Sanatana Dharma, the ultimate system or principle for which they are strive for, is actually used by them for getting votes of the Hindus, who constitute more than 85% of India. In reality, they are far away from Sanatana Dharma like the Congress which is far away from Gandhism. Remember the actions of the BJP government in Karnataka which never once considered the voters after attaining power and finally was swept out from the state after five years?
Will they follow the Dharmic capitalism under Narendra Modi taking care of long term merits or just follow unscrupulous capitalism for short term benefits like what was done by the Foreign Institutional Investors who withdrawing money from developing countries for short term profit which ultimately created the present crisis?
Inclusive and sustainable growth is the paradigm of the current time. In all development related issues, a government believing in Dharma should think about all those who are concerned with the same including other living things like animals and trees. Otherwise for maintaining the equilibrium, the nature will act hostile on feeble human beings in the form of natural calamities and catastrophes. Cloud bursts will happen like in Uttarakhand, Tsunamis will occur like in Tamil Nadu and Kerala; Earthquakes will happen like in Gujarat; Americans will kill the Vietnamese; Al Qaeda supporters will kill Americans and the atomic reactors in Russia and Japan will leak. Only Dharmic Karmas will be able to maintain the equilibrium of nature, hence the world.
By: Vinod Kuroor