As it is election time in India, all sorts of promises are being made by political parties and the leaders. Nature of these promises clearly show that the parties are either ignorant about reality or they have lost touch with the people. Everyone is promising monetary benefits for the poor, knowing very well that the health of country’s economy is not in good shape. If we talk about the last five years, the Indian economy hasn’t moved even an inch forward. Rather it has recorded a downward trend in every sector.Agricultural growth is negative. Manufacturing sector is in doldrums. Only service sector has performed better than the mentioned two sectors. But the progress is not up to the mark. This is why in the run up to the general elections we are hearing more and more chest thumping jingoism and less talk about the economy by the ruling party. As a matter of fact, failure to make the economy healthy was admitted by the government when it offered various sops to almost all sections of society just before the elections were announced.
For the record, the present growth in Agriculture sector is just 2.9 per cent, which was 4.3 per cent in 2014. Loans of small businesses have risen to 19.6 per cent from 0.5 per cent in 2018. Unemployment rate is about to touch 30 per cent in urban areas and in rural areas it is nearly 20 per cent. But rural wages have gone down considerably from 5.3 per cent to 4.7 per cent. Performances of Indian INCs are also not encouraging. Change in EBITDA of firms with sales below 25 crores, has gone down to -112.7 per cent. Clearly, the government has failed to utilise the gains from falling crude oil prices. Out of the three primary sectors of economy if Agriculture has done poorly, it is simply because of government apathy. Virtually no efforts were made during the last five years to improve Agriculture production and the livelihood of farmers despite the promise of doubling farm income by 2022. It may be mentioned here that more than 50 per cent of Indian work force is engaged in Agriculture. The farmers are burdened with various problems. If they produce less, they will not have enough money to fend themselves throughout the year. If there is bumper production, the farmers will not get proper price because of the simple demand and supply theory. But the biggest problem Indian farmers are facing since time immemorial is that even in the modern era they are still dependent on weather. In other words, Agriculture production in India depends on good monsoon. Successive regimes have neglected the need of establishing an adequate irrigation system.
The fall of manufacturing sector is being attributed to two vital blows to the economy namely demonetisation and Goods and Services Tax (GST). While demonetisation has failed to provide any good, GST was implemented hurriedly. The changes effected in GST law since its inception stand as a testimony to this fact. Surely, GST, the biggest tax reforms in independent India, required more thought and proper execution. The only bright spot for the government is the implementation of a couple of welfare schemes. But to sustain these schemes a steady growth of economy is required. Otherwise fiscal discipline will be disturbed beyond repair. There is a limit in providing sops. Clearly, the job will not be easy for the party/parties that form the next government.
