The Indian Economy was in the doldrums even before Covid struck. A hasty and ill advised Demonetization knocked the sails of a healthy economy and put it in the hospital. An equally botched Goods and Services Tax nationwide rollout ensured that the economy went into the Intensive Care Unit. Now, with the Triple Whammy of Covid, there is no hope for the Indian Economy and it would indeed take a miracle for it to recover. Not that the headline numbers in terms of growth and other parameters of economic progress do not tell the story. Even with the “massaged” statistics, all indicators are in the red and point to a serious malaise in the structural aspects of the economy.
On the other hand, the Uber Rich in India are partying like there is no tomorrow, oblivious to the suffering of the masses. Moreover, like in the United States and elsewhere, the Rich have become Richer and the Poor Poorer in the last year or so when the Pandemic was at its peak. While Western nations and especially the US, under the Biden Harris Administration are addressing the glaring inequities due to the Pandemic, the Indian Policymaking elite and the Politicians are busy with their politicking and the state polls, that shows a “disconnect” from their priorities and that of the masses.
This situation, if allowed to continue, risks India becoming a Basket Case, which is anyway a Functioning Anarchy, and would take a Tiny Spark to set i motion Social Unrest. There are any number of reasons why this is not Doomsday Prophesy, starting with the very real aspect of Millions of Jobless Youth and the Pandemic induced joblessness among the Middle Aged and White and Blue Collar professionals and workers. Already the much vaunted Demographic Advantage has turned into a Demographic Nightmare, since both the Central and the State governments could not turn the “bounty” of a Youthful Population into an asset, by creating jobs. Now, with an estimated 200 Million people out of work and an equal number of Indians being “pushed” into poverty, it is anybody’s guess as to where this present situation is leading to.
Moreover, there is no “valve” through which the authorities can release some of the “stress” in the Indian Economy. For instance, Banks and Financial Institutions are saddled with a Large Pile of Bad Debts, that are unlikely to be resolved soon, even after the Bad Debts Bank, which was constituted recently, started functioning. Indeed, given the notorious lethargy of the Indian Judicial System and the Huge Backlog of cases, there is no guarantee that disputes related to settlement of debts and creditors claims, would be solved anytime soon. Look at the way in which the Bankruptcy Law, that was touted as a “game changer” has been floundering for these very reasons. So, essentially, the Central government cannot “count on” on the Banks to lend more, even after record low rates, and an obedient Reserve Bank of India, doing its bidding, by transferring Dividends and other Payouts to the former.
Of course, governments can always “print money” to finance mega spending sprees, especially during these times when the Pandemic has made it imperative for nations worldwide to do this. However, for some reason, deficit financing by printing money, seems to be “anathema” to the present dispensation, even after leading economists, including Nobel Laureates such as Amartya Sen and Abhijit Bannerjee, explicitly advised the Indian Government to do so. In addition, even the modest stimulus that was rolled out is mostly “window dressing” at its best, and a mockery of the poor, at its worst. So, what we have in essence, is an uncaring state machinery, that has left its citizenry to their own devices, and seems unwilling or unable to help them.
What is equally alarming is that the Taxes on Petrol and Diesel as well as Cooking Gas, have been raised so many times, that one has lost count, and these revenues are being channeled into worthless and wasteful project, some of which are the “pet projects” like the Central Vista Complex, of the Powers That Be. While India has always had governments that were indifferent to the suffering of the common people, the present situation beats the predecessors hollow. With all the structural and the other problems in the Indian Economy, one can only hope for a “miracle” for it to recover.
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