There is a reason for cautious optimism. The manufacturing sector seems to have made a smart recovery and has recorded growth rates of 3.8 per cent and 6.4 per cent in the first two quarters of the current fiscal. Manufacturing is important. The brick and mortar segment of the industrial sector is the one most amenable to reasonably accurate measurement. It is the segment that unerringly points to either a recovery or a recession. There are other encouraging signs too. Non-oil imports have increased by 12 per cent in April-November. Total exports during this period of eight months have also recorded a healthy growth rate of 16 per cent. There has been a rise in non-food credit. Business sentiment has improved. All these point to an incipient recovery of the economy, riding on the back of the manufacturing sector.
The services sector also seems to be doing well. In the past, however, the CSO has attracted notoriety for drastically revising its projections, and no where more than in respect of the services sector. There is no evidence that financial services, real estate, hotels and tourism are doing better now than in the last year. Hence, it may be too early to celebrate a higher rate of growth in the services sector. We should be happy if this sector returns a growth rate no less than the growth rate in fiscal 2001-02.
Now, the bad news. The bad news is on the agricultural front. The CSO has estimated that the agriculture sector recorded zero growth in the second quarter. This is a direct consequence of the failure of the south-west monsoon and the drought conditions prevailing in large parts of the country.
The third and fourth quarters are likely to be worse. There was a brilliant analysis in the Business Standard of what happened in 2000-01, which was also a drought-affected year. The effect of the drought was felt in the second and third quarters when agricultural growth declined to a negative 0.8 per cent and further to a negative 4 per cent. Consequently, manufacturing which had registered impressive growth rates in the first three quarters also declined to 4.6 per cent in the last quarter, and remained depressed right through 2001-02.
The lesson that must be learnt is that the manufacturing sector should not be allowed to be dragged down by the decline in the agriculture sector. While the effect of poor agricultural production cannot be entirely avoided, corrective measure can be taken to maintain the momentum of the manufacturing sector. What needs to be done are obvious: ensure that interest rates remain low, quicken the pace of public investment and remove the roadblocks to private investment, both from domestic and foreign sources. This calls for close monitoring, paying attention to detail and working hard to ensure that projects are started and completed on schedule. What we really need is fifty more Sreedharans and fifty more projects like the Delhi Metro.
Instead, what we have are Praveen Togadia, Vinay Katiyar, Giriraj Kishore and their like. The fault does not lie with them, but with those who allow them to thrive and with those who do not shut them up. Why is there so much talk about Hinduism being in danger and about Hindutva
In a country where the overwhelming majority is Hindu, Hinduism can never be in danger. The threat to civil society comes from terrorism. The terrorist could be Hindu or Muslim or Sikh.
A terrorist threat is a secular threat (i.e. temporal, worldly, unspiritual) and must be dealt with by a secular State using its vast arsenal of powers.
If, at a given time, more persons professing Islam turn out to be terrorists, that threat is still a secular threat to society as a whole and ought not to be labeled as a threat to Hinduism.
Togadia vows death to those who oppose Hindutva. Kishore calls Vajpayee pseudo-Hindu. Katiyar demands that certain mosques in Kashi and Mathura, and Ramjanam Bhoomi, should be handed over to the Hindus. Apart from being mischievous and provocative, such rant has no place in public discourse. Unfortunately, no one in the BJP or the Central Government has the courage to ask them to shut up or to lock them up.
Vajpayees muse inspires him to quote from Rabindranath Tagore, Aurobindo and Swami Vivekananda. I wonder if the criminals who perpetrated Godhra or the massacres post-Godhra (make no mistake, both groups were criminals) have even heard of Tagore or Aurobindo or Vivekananda. They draw their inspiration from M.S. Golwalkar or Osama bin Laden, but they hide their animal passions under the garb of Hindutva or jehad. Vajpayee should have seen the reality on the ground and not harped on some elusive although elevating philosophy that he has gleaned from the great thinkers of India. He should have simply said, I will punish all those who rake up controversies in the name of religion.
That statement made, Vajpayee should have turned his attention to the tasks that have to be undertaken urgently to arrest the inevitable slowdown in the economy. On the contrary, by trying to redefine Hindutva in his own style and justify it, he has only whetted the appetite of the rapacious right-wing. He has also invited criticism from the Congress and the Left parties. Instead of beginning the new year with more goodwill and more consensus, the Prime Minister is beginning the year with more bitterness and more divisiveness. It does not bode well either for governance or for resurrecting the economy.
(The author is former Union finance minister)