Despite high economic growth, the fall of the rupee currency to record lows this year has led to a surge in prices of largely imported fuel, which is feeding into inflation.
Narendra Modi swept India’s 2014 general election with the slogan “Achhe din (good days) are coming”. Four years later, as Prime Minister Modi mobilises to win re-election in May, he and his Bharatiya Janata Party (BJP) are being buffeted for a lack of jobs, falling farm prices and rural wages, a tax reform that led to unemployment and a demonetisation exercise that sapped liquidity.
Despite high economic growth, the fall of the rupee currency to record lows this year has led to a surge in prices of largely imported fuel, which is feeding into inflation. Nationwide protests have broken out because of the price rise. “There’s no improvement in our life – we eat two basic meals a day but struggle to save for soap and detergent,” Misri Lal, 52, said in Bhomada village in central India’s Madhya Pradesh state, where he earns $2 a day watching over a yellowish-green soybean farm.
In a series of interviews in India’s political heartland, the northern and central plains, many people said they had been disappointed by Modi’s government. But in a nation of 1.3 billion people, it was difficult to estimate how far the disillusionment had spread and how much it could affect Modi and the BJP at the next general election. Despite its fitful performance on the economy, the BJP remains robustly Hindu nationalist, which plays well among many voters. Modi’s aides insist that the party will not suffer in the election next year and will repeat the 2014 performance.
They also say the BJP will do well in three big state elections due later in 2018, which could signal how things will go in the general election. Opinion polls predict Modi will return to power next year, but said the gap against the opposition was narrowing. But “achhe din”, which has become synonymous with Modi and his rule, is being mocked on social media in India.
A cartoon widely distributed on Facebook’s WhatsApp messaging platform had a man looking through a telescope for “good days”. Another had Modi sitting in front of a spinning wheel weaving “achhe din” stories. Some BJP officials privately say they are not quite sure of sentiment in the small towns and villages of rural India, where two-thirds of the people live. Lal, the farm hand, said he was a long-time BJP supporter but it was time for change. “We have always voted for them but people are angry now.
It appears things will change this time around,” Lal said, his wife and two grandchildren looking on from near their tin shed in the middle of the unfenced soybean fields. RURAL PAIN The Modi administration has acknowledged that farmers are suffering in a country where agriculture is the biggest employer, engaging 263 million people or 55 percent of the total number of workers.
“Trends in inflation clearly show that farmers are under distress due to un-remunerative prices and need to be compensated appropriately,” India’s farm ministry said in a report sent to states last month and seen by Reuters. Rural wages have weakened across India compared to a high growth period during the rule of the centre-left Congress party which aggressively promoted a rural jobs scheme that guaranteed every citizen paid work for at least 100 days in a year. Economists say its impact has now levelled out.
A boom in the construction sector had sustained the growth in wages but that has since slowed down dramatically, dragged by Modi’s November 2016 move to suck high value currency notes out of the system to combat corruption and then a sweeping goods and services tax (GST) that businesses are struggling to adapt to. Average inflation-adjusted growth in rural wages fell to 0.45 percent between 2015/16 and 2017/18, compared with 11.18 percent between 2012/13 and 2014/15, said India Ratings & Research, a unit of international agency Fitch.
The Reserve Bank of India says that high growth in rural wages from 2007/08 to 2012/13 was followed by a phase of “significant deceleration”. “GST and demonetisation have really depressed the construction industry. I get only 20 percent of the work I used to get before demonetisation,” said Chotelal Rajput, a construction contractor in the Madhya Pradesh capital Bhopal, as he stopped by a busy roundabout where dozens of labourers gathered to be hired for daily wages. In Wai, a small town south of Mumbai, migrant worker Mithilesh Yadav said he voted for Modi at the last election but would not do so again.
“The BJP was talking about bringing down inflation, bringing down petrol and diesel prices, but instead they are raising prices every day,” the 26-year-old said. “All tall claims made by Modi were just advertising and we fell for it. I won’t commit the mistake again.” IT’S JOBS Many political analysts say Modi’s failure to create tens of millions of jobs for the country’s youth – a promise which helped him secure the largest mandate in three decades in 2014 – would be the biggest threat to his bid for another term.
“No one here will vote for Modi,” said Rakesh Kumar, a college graduate in the town of Kasba Bonli in northern Rajasthan state who says he has worked as a house painter because he could not get any other employment. Kumar said he finally found a job as a teacher in a private college last month but his paltry monthly salary of 8,000 rupees (about $111) meant his six brothers worked as manual labourers. The town voted overwhelmingly for the BJP in 2014.
In Panipat, a town north of the capital Delhi, workers in textile mills said hundreds had been laid off because many small business owners could not cope with the complexities of the new GST regime and had shut shop. Gopal Krishna Agarwal, a BJP spokesman, said the country could not expect the Modi government to resolve all its problems in so short a time. “India has been independent for more than 70 years and we can’t say that problems that have persisted for around 65 years would go away in four and half years,” he said. “We’re not saying every problem has been solved but our focus and direction are correct.” The BJP is also confident about its prospects next year because of the fractured opposition. Rahul Gandhi of the Congress is Modi’s main opponent, but there are a host of regional parties that are likely to divide the opposition vote.
India Today news magazine published a survey last month predicting the BJP would lose seats compared to 2014, but retain just enough to form a government with allies if the opposition remained divided. It predicted the BJP would win 36 percent of the vote and Congress 31 percent, but said smaller parties would get 33 percent. Gandhi told a group of journalists last month that a “robust opposition alliance” would be in place before the 2019 election and that a candidate of a unified opposition would go up against the BJP in each constituency.
“More damage has been done to India by this government than any in the past and everyone recognises the over-riding need to thwart them,” Gandhi said, referring to the BJP’s Hindu nationalist agenda that critics say has targeted the country’s minorities. Subhanshu Sethia, a college student in the northern town of Meerut, said Modi’s singular failure had been the lack of jobs. “Achhe din is only for the rich, the businessmen who get fat contracts, for the rest of us it has been a let down,” he said. “There is a war out there for jobs.” ($1 = 71.9150 Indian rupees)