The New Miracle Man

Just as Narendra Modi was regarded a miracle man at one time, and Arvind Kejriwal later, some people are perceiving and projecting Nitish Kumar as the miracle man now, the modern Moses who will lead India into a land of milk and honey.

 I submit that this is only a pipe dream, which will soon disappear. Leave aside the fact that the new Bihar government is saddled with the stranglehold of the RJD, and assuming Nitish is personally honest, what can he achieve ?

  The main problems of Bihar, as also the whole of India, are massive poverty, unemployment, malnutrition, lack of healthcare, good education, etc. I am afraid Nitish has no idea how to solve these problems.

 Take, for example, the question of unemployment. Now jobs can be created and poverty abolished when the economy is rapidly expanding. For that massive industrialization is necessary. There is no difficulty in increasing production, because India today has a huge pool of competent engineers, technicians, scientists,etc ( which it did not have in 1947 ) and has also immense natural resources. 

The problem is: how will these additional goods produced be sold ? People in India, including Bihar, are too poor and have little purchasing power, and with rise in prices of foodstuffs, etc this purchasing power has further been reduced. After all, the goods produced have to be sold, but how can they be sold when people are too poor to buy them ?

 So the basic question is not how to increase production ( that can easily be done ) but how to increase the purchasing power of the masses ?

 Under the Nazi regime unemployment was largely abolished by a programme of massive rearmament ( see William Shirer's ' Rise and Fall of the Third Reich ' ), which was financed by certain Western powers. But that is hardly possible in India today.

 The other method for abolishing unemployment was that adopted in the Soviet Union in the 1930s. At a time when Western economies were going through a depression following the Wall Street Slump of 1929, the Soviet economy was rapidly expanding. How was this achieved ? The methodology followed there was this : the Central Government fixed all prices of goods. Thereafter they steadily reduced prices of goods by about 5-10% every 2 years or so, and sometimes raised wages by 5-10%. In this way by state action the purchasing power of the people was steadily increased. When prices are reduced, the real wages automatically increase, because incomes are relative to the price index. Simultaneously production was increased, and the increased goods produced were absorbed in the domestic market, because the people had more purchasing power. But this method cannot be used under the prevalent system in India.

 So our 'miracle man', who like a good politician had promised 'vikas' during the Bihar elections, will be compelled, like Modi and Kejriwal, to resort to stunts and jumlas. But sooner or later people will see through these gimmicks, making him very unpopular.