An economist turns strangely political to criticise a government that follows his ‘Manmohanomics’ of liberalisation, globalisation and privatisation with the same zeal as its proponent, himself - -former Prime Minister Manmohan Singh.
One can understand the pressure on Singh trying to score a goal at poll-time. The plunge that he took virtually exposed the kinks in Manmohanomics. It never was a panacea for inclusive growth in a global situation that monetises every social effort and banks products and activities that should not be. Europe is fighting to come out of the clutches of banks and make transactions easier and less expensive.
Rising prices were a phenomenon during Singh’s UPA regime and they continue because the nation never cared to controlthe prices, except during a brief period of NDA-I under the late Prime Minister Atal Bihari Vajpayee. As a people’s Prime Minister, having been in touch with the common man, he scripted path-breaking reforms in telecom, road, power, and taxes. Despite sanctions followingPokhran-II in 1998 and the Kargil War in 1999, the government managed to keep economic growth above six per cent till 1999-2000. Growth slowed in 2002- 03, following a drought, but recovered soon.
In the years after 1998, Vajpayee met the challenge well and according to the World Bank, inflation was 4.67 per cent in 1999; 4.0009 in 2003; 3.779 in 2001; 3.806 in 2003 and 3.767 in 2004. Inflation in 1998 was at 13- plus per cent.
Vajpayee had left a high GDP for his successor Manmohan Singh of the Congress. During the UPA years, 2004-2014, GDP numbers were initially high but slumped drastically towards the end of its tenure. Shockingly, few understand the enigma of the electoral rejection of the Vajpayee-led BJP in the 2004 Lok Sabha elections.
The new government under Manmohan Singh, data shows, had GDP growth between 2004-05 and 2011-12 at 7.05 per cent, 9.48 per cent, 9.57 per cent, 9.32 per cent, 6.72 per cent, 8.59 per cent, 8.91 per cent and 6.69 per cent for the respective financial years (according to the old series). The growth was 6.05 in 2014, as per the new series.
Nothing was hunky-dory in the UPA regime. Vajpayee had led the biggest-ever coalition withélan.The Left differed withhimbutinprivate, most leaders praised him though they had reservations about his disinvestment. The same Left alliance could not continue in Manmohan Singh’s UPA government beyond 2007 as they protested Singh’s antipeople decisionand poor leadership. The nuclear deal with the US triggered their exit. The check that the Left had on the UPA was lost and it plunged into a series of scams.
Inflation was at a high since 2007 and had reached a super-high of 11.06 per centin 2013, giving the BJP the edge to fight against the ‘mahngai dayan’ – the inflation dragon. As per data, Singh’s successor, Prime Minister Narendra Modi inherited poor GDP numbers after coming to power in 2014.
However, the GDP numbers during the NDA improved initially. In 2014-15,the GDP growth was recorded at 7.2 per cent. This increased to 7.6 per cent in 2015-16.
The NDA government started faltering under the baggage, leading to too many corrections. The economic woes it inherited, with the fear of ‘black money’ tormented it. Being under pressure, Modi hurriedly decided, in 2016, to embark on a neverbefore demonetisationof 87 per cent of currency notes to clean up the economy. Theoretically it was a good move but in reality, it plunged his government and the people into unseen problems. An economy that had just started booming got a shock. It hurt businesses and the poor and there was a possibly neverimagined impact on the political finances of parties.
‘Notebandi’ slowed growth to 7.1 per cent in 2016-17. The following year, in 2018-19, the GST introduction (in July 2017) reduced it to 4.2 per cent and the unprecedented 2020 pandemic cut it to minus 7.3 per cent.
The Modi government has been sucked into a vortex, having inherited a poor system and for nottrying to move out of ‘Manmohanomics’. Bank NPAs soared during the UPA government, as it opened its coffers to incentivise rich companies. Public finances, deposited by the poor, became fodder for fly-by-night operators. A smallnumber of companies alone heaped over Rs 2.24 lakh crore in NPAs by 2014. This could not be checked and the number has doubled to Rs 5.4 lakh crore in 2021.
The decade-long messing up of the economy needed heavy correction but this did not happen, as the NDA remained under the ‘aura’ of Singh. It forgot that all the major scams that happened during 1992 to 1998 were under the stewardship of Singh as finance minister. So were the post-2007-’08 bank NPAs, when he was the Prime Minister.
The NDA is to be faulted for continuing with a liberalisation that never really was, except for the UPA’s chosen business friends. Its disinvestments of PSUs never helped the country. The most profitable ‘Navratnas’ were handed over on a platter to friends and many were deliberately led to losses, like the MTNL, BSNL and Air India. In fact, the NDA could have instituted an inquiry to unearth the 2005 scam thatforced the profit-making Indian Airlines and Air India to merge and be dumped with losses for the benefit of private operators. The shearing alone cost the exchequer almost a trillion rupees.
Various compulsions caused the NDA to falter on ‘atmanirbhar Bharat’. It happens sometimes in the process of governance. Now, the SBI has come out with a possible solution.The countryhas to reduce its dependence on China. Its economic report, Ecowrap, says leveraging production-linked-incentives could reduce dependence on China by 20 per cent or $8 billion GDP gain. And it is possible to reduce it to 50 per cent, which would mean a $20 billion bonanza. It would result in the addition of 60 lakh jobs and production of Rs 30 lakh crore in five years, ontop of whatthe Union Budgethas announced.
The NDA has to implement its ideas. It has to also go slow on some, like the National Education Policy, bullet and metro-type trains, review the extension of roads and too much dependence on infrastructure spending. As also, it has to review the causes of, including many administered prices likehightoll, cess, fees, freights and fares that are pushing up inflation. There are opportunities galore for the NDA, as also prospects to ensure it frees itself from the legacy of Manmohan Singh, his Manmohanomics, and chart out a new, peoplecentric economy.
The writer is a veteran journalist, an observer of the socio-politico-economy and a media academician
