Saturday 17 January 2015

Full of Sound and Fury, Signifying Nothing
Yesterday's Airtel and Economic Times Global Business Summit in Delhi, attended by the Prime Minister, the Union Finance Minister, the Union Minister of State for Finance and other Ministers, apart from CEOs of big companies and globally renowned economists, was, to put it in Shakespeare's words ( see Macbeth ), " A tale, ( I will not say told by an idiot, because there were many 'wise men' at the function ), full of sound and fury, signifying nothing " ( see page 30 in today's ' Times of India ').
 The Prime Minister said that we can convert our 2 trillion dollar economy into a 20 trillion dollar one, Obviously he has a magic wand or Alladin's magic lamp for doing so. The Finance Minister, another one given to high sounding and irrelevant rhetoric, said that the government is 'committed to non aggressive tax reform'. Vineet Jain said that India can become a 'second engine' in the world economy ( after the U.S. ). Obviously he regards Germany, China, etc as non entities. Paul Krugman,the Nobel Prize winner, said that 'India is a country of the future' ( whatever that may mean ).
 The Prime Minister said " I believe in speed. I will push these changes at a fast pace. Development has to result in jobs. What we need is not mere production, but mass production and production by the masses."
 Very brave words, Mr. Modi, but please see page 13 of the Hindustan Times of today. It is reported there that 10 more farmers committed suicide in Vidarbha region of Maharashtra ( a state now ruled by your party ) in the last 48 hours. There were 29 farmers suicides in Vidarbha in January ( and we are only in the middle of the month ), and 56 in December.
The figures of farmers suicides given above are just in one part of one state. One does not know about the number of farmers suicides in the rest of India.
 Do you call this development Mr. Modi ?
 Mr. Modi is perhaps envious of the rise of China as a manufacturing giant. India has lagged behind for several decades, and he wants It to catch up.
 The problem is that despite all the hoopla and cheering at various functions Modi attends ( like yesterday's summit ), the growth of manufacturing in the July-September quarter was just 0.1%. The growth of fixed investment, the foundation of future production, was virtually zero.( see my articles ' Vikaas ', ' The Dream has Evaporated ', ' Jai Ho ', ' Thumbs Up ', ' The Trickle Down Theory ', ' The Coming Second Emergency ', " The New Janus ', Niti Ayog ', ' Unemployment in India ', ' Malnutrition in India ', and ' Healthcare in India ' on my blog ). It is because fuel prices have drastically gone down that we have not had a major economic crisis as a result result of your moonshine economic policies, Mr. Modi.
 Businessmen are not ' Making in India' nor investing in India. Why should they ? They are working for profit, not for charity. Without proper infrastructure ( roads, electricity, water, etc ) and pro-business, corruption-free environment, who would like to ' Make in India' or invest in India ?
 One industrialist, who did not want to be named, asked " Why will foreigners come to invest here when Indians are not investing ? ". A U.S. businessman said during Modi's U.S. visit " There's a lot of sizzle, but where's the steak ? ".
 The Doing Business Report of the World bank and IFC for 2015 ranks India 184th among the countries of the world in ease of getting a construction permit, 134th in getting electricity connections, 121st in registering property, 156th in paying taxes, 122nd in ease of foreign trade, 137th in resolving insolvency, and 186th in enforcing contracts. The Modi Government  has shown little or no action on these fronts. Many of these issues fall within the jurisdiction of state governments, and  Modi has neither the means nor inclination to impose tough regulations in this connection.
 As regards corruption, it is true we have not yet seen the macro scams which were a regular feature in the UPA regime, but corruption is as rampant as ever in India, as I have been informed by many businessmen I met. Moreover, as the Urdu poet Josh said in his poem ' Rishwat', " Agar hum rishwat naheen lenge to phir khayenge kya ? ".
 But the basic economic problem in India is how to raise the purchasing power of the masses ? Without doing so, there is no question of mass production, which Modi talks constantly about, because how will the goods produced be sold ? Of this, the Modi government has no inkling. All that it caters for is a small coterie of big businessmen who have benefited from his ascent to power


  1. wow! It's amazing post. thanks for shearing it.


  2. I feel Markandeya Katu has deliberately, with a bias towards Modi,overcritised
    Modi's plans,his dynamic & ambitious policies and activities.Though Katju has
    indicated some stastistics of poor 'maufacturing' growth in 2nd quarter of 2014-15
    and fixed investment having been zero,there have been many plus points in Modi's
    plans,expectations(which could fructify) and schemes launched.One should not
    pooh-pooh at the well-conceived well planned and ambitious vision of Modi just
    like that.Businessmen - whether foreign or Indian will definitely invest and
    manufacture,subsequent to certain relaxations of strict rules and providing of
    investment-friendly & doing-business-friendly environment.And they will make money and earn profit.Let us all,we Indians including Katju see the glass half
    filled with water as half full and not as half empty.Let us be optimistic !