More than three weeks after they started, there is no sign of a let up in the nationwide protests against the Citizenship Amendment Act (CAA) and NRC.
But the government seems unfazed by the stir that has seen wide participation of people across the country. At one level, these protests are against the BJP-led government’s attempt to redefine the idea of India as enshrined in the Constitution.
At another level, the protests are intended to challenge Indian society’s collective prejudices that divide people in terms of religion, caste, language and region.
The protests, therefore, confront unresolved questions on identity, citizenship, constitutional rights and their role in creating a substantive democracy.
It is the need to preserve the idea of India that is aligned with values, norms and democratic rights upheld by the Constitution which has united people against the CAA and NRC.
The ruling establishment’s effort to redefine Indian nationhood and create social schism is what has created a popular upsurge. What has stunned the ruling party and its ideological mentor, the RSS, is the fact that the protests, in defence of unity and constitutional democracy, negotiate social, economic and religious differences.
Since the CAA, NRC and NPR (national population register), seen as inter-linked to each other, are being viewed as the ruling party’s policy instruments to implement its larger socio-political agenda, the protests exemplify a democratic fight to preserve equality and non-discrimination.
While the protests indicate a secular and inclusive message, the government appears determined to impose a value system that polarises people on religious lines.
Taken aback by the scale of pan-India secular protest, the BJP unsuccessfully tried to portray it as the protest of one community only, but later tried to discredit and dismiss it as imprudent and thoughtless exercise based on misinformation and distorted understanding of the CAA.
But the protestors have understood the real intent behind CAA, NPR and NRC: they not only target the Muslim community but also the poor among Hindus, the Schedule Castes and Scheduled Tribes.
While the government seems unmoved by the protests, the protestors, many of them students, are simultaneously sending several messages to the government. One of them is: focus on real governance and the disastrous state of the economy.
What cannot be denied is that the BJP’s socio-political agenda, the foundation of which was laid in 2003 by the Vajpayee government with the insertion of clause 14 in the Citizenship Act of 1955 for conducting NPR and NRC, is not only hugely disruptive, it is a recipe for socio-religious division and huge economic damage.
Already the economy is reeling under massive slowdown that has not been seen in three decades since the 1991 economic reforms. The severe growth slump that has gripped the Indian economy has surprised most economists and international economic agencies. As a result, the very agencies which were quite upbeat on India as the next economic powerhouse among emerging countries a few years ago, have turned pessimistic on the India-growth story.
Be it the Moody’s, Japanese brokerage firm Nomura or our own central bank, the RBI, they all have slashed growth forecast for 2019-20 to around 4.9 to 5 per cent. Significant downward revision for India is likely to come from the IMF next, as indicated by its chief economist Gita Gopinath recently.
That the economy is in a tailspin was fairly obvious from key economic indicators flashing distress signals for quite some time now. The massive slowdown was reflected in the second quarter GDP numbers at 4.5 per cent. The third quarter GDP is unlikely to be any better either.
In his latest paper, co-authored with Josh Felman, former head of IMF’s India office, Arvind Subramanian, Modi government’s former chief economic adviser, has said that India is facing a great slowdown with its economy headed for intensive care unit due to a ‘second wave’ of twin balance sheet crisis at banks.
In his view, India is facing ‘four balance sheet’ challenges – comprising banks, infrastructure plus NBFCs and real estate companies – and is trapped in an adverse interest growth dynamics.
“Since the global financial crisis,” Subramanian has said in his paper, “India’s long-term growth has slowed as the two engines propelling rapid growth – investments and exports – sputtered.
Today, the other engine – consumption – has also stalled. As a result, growth has plummeted precipitously over the last few quarters.” That the economy is locked in a downward spiral, in his opinion, is best captured by the astonishingly high interest-growth differential: the corporate cost of borrowing now exceeds GDP growth rate by 4 per cent. “This has caused a resurgence in the amount of stressed debt, a second wave of balance sheet crisis,” he said.
If this process is left unchecked, Subramanian said, “the economy will continue to spiral downward, as stress reduces growth, which then intensifies the stress.” Clearly urgent steps are needed to stabilise the economy and to get back on the path of rapid growth.
But in the current circumstances, in his view, the government cannot or should not use standard macroeconomic tools: it cannot provide significant fiscal stimulus, it should not increase GST rates and reduce personal income tax and easing monetary policy can have only a limited effect.
So what does the government need to do now? According to Subramanian, the first major action for righting the economy could be Data Big Bang – publication of unreleased reports (data) together with a strategy for improving official statistics in key areas like GDP, consumption, employment, fiscal accounts and stressed assets in the banking system – to instil confidence and produce a reliable basis for policy making.
Looking at several indicators like exports, imports, growth of consumer goods production, production of investment goods and government revenues, Subramanian says the current slowdown seems closer to 1991 slowdown than the 2000-2002 recession.
The last time India saw bold comprehensive reforms was in 1991, which were triggered by the balance of payment crisis; those reforms paid off across the board over a period of roughly two decades. The last decade has not been good for India and 2019 was a bad year for Indian economy; it looks like 2020 may be another difficult year, too.
The government has the political capital and opportunity to go for second-generation reforms. But instead of focusing on economy, the government seems to be preoccupied with its social and political agenda: CAA, NPR and NRC.
Given the economic challenges the government faces, it could well do without the contentious issues people are protesting against. But the government doesn’t seem to be inclined to listen to the people. It remains to be seen whether the government will stick to its social agenda at the cost of economy.
There doesn’t seem to be any sign of rethink for now. If the government pursues disruptive issues, it risks undermining growth and development as well as damaging India’s image globally.
The writer is an independent Mumbai-based senior journalist.
