Lok Sabha Elections: Why economy can’t be PM Modi’s USP

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Updated: March 18, 2019 7:04:14 AM

The NDA can’t really claim it has brought back acchhe din; the economy certainly can’t be a talking point in the polls.

Why economy can't be PM Modi's USPWhy economy can’t be PM Modi’s USP

The headline numbers may look good but not too many sections of the population would say they are better off today than they were in 2014. Bumper harvests have led to a collapse in crop price leaving rural India in distress. And while the data on unemployment is statistically bewildering, even unreliable, the rosiest estimates fall short of the needs of one million people looking for livelihoods every month. The NDA can’t really claim it has brought back acchhe din; the economy certainly can’t be a talking point in the polls.

Indeed, had the government better utilized the gains from falling crude oil prices and not disrupted the economy with DeMo, knowing the GST rollout was scheduled, it might have fared better. Defending DeMo took the focus away from key reforms. While a host of social welfare schemes—Ujjwala, Swachh Bharat, Aawas Yojanas, Ayush—would no doubt, have made life easier for women and less-privileged households, the key priority from day one needed to be jobs.

The NDA was well aware it had inherited a twin balance sheet problem and while it deserves more than full credit for IBC it needed to have ensured that small businesses, especially in the informal sector, had access to adequate credit at affordable rates.

GST was aimed at formalizing the economy and rightly so but some support for was needed for small-scale units. Moreover, given how the delay in refunds to exporters crippled many businesses, it was clear the levy should have been rolled out after more preparation especially since DeMo had already hurt small businesses. The loss of traction in Indian industry is all too visible: growth plunged from 6.3% in November, 2017-October, 2018 to an average of1.5% in the three months to January. Neither has agriculture fared much better, the PM Kisan scheme is evidence there has been little reform although, till recently, BJP ruled 21 states.

Instead, the NDA resorted to populist measures such as significantly higher MSPs and loan waivers. The NDA may be right-thinking but its measures have been Leftist.

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