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As India turns 70, we need a bigger cake

Shivaji Sarkar
Shivaji SarkarAug 12, 2017 | 09:20

As India turns 70, we need a bigger cake

The 71st year of Independence begins with a call by Prime Minister Narendra Modi for eradication of corruption, poverty, terrorism, casteism and communalism to create a new India. This is significant to reshape the contours of Indian society and economy.

Since the first Independence Day, such calls are being given. It is true that the nation has made progress. The standard of living has improved. In the 1970s, even then PM Indira Gandhi said so. But it is also true that disparity has also increased.

It is a fact that social discontent is on the rise. Else, on the day of August Kranti, (August 9, 2017) Mumbai would not have witnessed a silent rally by reportedly five lakh Marathas.

Yes, clannish, casteist protests of supposedly powerful social groups like Patidars in Gujarat, Jats in Haryana, Gujjars in Rajasthan, farmers and other communities across the country have become the norm. They all are demanding jobs, reservations, loan waivers and other concessions.

This is despite a functional government since 2014. The Modi government has instilled hopes and flooded the nation with a number of programmes, from Skill India and Mudra to Make in India and so many others for almost every different group.

Modi’s August 9 call is significant. He wants to transform the nation. The accumulated problems, the burgeoning population, scarce resources, the vast expanse of the country come in the way.

So, would the nation’s wishes to change it in another five years remain a dream? It should not be so. But wishes alone cannot be horses. Why is it that in the last few decades the nation could not achieve what it wanted?

The answer is that the countrymen achieved it piecemeal. Some got it and many did not. Why? Because governments could not bake a cake that was big and sufficient for all. Those who could pounce got a slice or more while others just pined for it.

As they did not get their share, they got together in the name of castes, communities and other groups to express their discontent.

The socialistic slogans, licence-permit raj, high taxes that rob earners, neglect of agriculture and it being treated separate from the economic process, big industries, Planning Commission-NITI Aayog, liberalisation-globalisation, anti-China protests have not helped.

The cake has remained small. The equity remains elusive. The high earner is as dissatisfied at the taxes as the lowest one who also shells out as high an amount. India has not tried to get rid of its impoverishing income tax - an average salaried person loses four to five months’ wages.

Higher tax collection (19 per cent more direct tax now) has not added to the pace of growth. And the governments crib that production is slowing down! How can production go up if people have to pay irrational taxes and continuously face an inflationary situation? Except for 1998-2004, India rarely had a stable price regime or real low inflation with adequate productivity and high job growth.

Despite difficulties, India is awake and making strides almost in all spheres. Its GDP in 1950 was Rs 10,536 crore and is now Rs 1.68 lakh crore. The First Plan, a concept first espoused by Netaji Subhas Chandra Bose in 1938 when he was the president of the Congress, and later implemented by Jawaharlal Nehru as prime minister was considered to be revolutionary. It helped the nation achieve success in space technology, nuclear energy, industrialisation, IT, education, women’s emancipation and overall improvement in living conditions.

In 1947, life expectancy was 32, now it is 68, per capita income of Rs 249.6 has become Rs 1.03 lakh ($1575), and in terms of GDP India ranks third after China and the US.

In 1947, only 1,500 villages, 0.025 per cent, were electrified; now 97 per cent of villages reportedly have electricity. Only 12 per cent of the population had school education earlier and now 74 per cent are literate.

It is also true that the CAG has found fault with every government department big or small.

mods_081117072636.jpgThe Modi government has flooded the nation with a number of programmes.

The latest RBI consumer survey in six cities of Bangalore, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi for June 2017 showed the percentage of people who said their income growth was lower than in December 2013 and March 2014, when disenchantment with the UPA government was at its peak.

The net responses have been negative for six consecutive quarters now. Manufacturers have marginally increased employment.

The RBI survey despite this points out that the people are still hopeful of job and other conditions improving by next year.

The median forecast of gross fixed capital formation (GFCF) for 2018-19 is 29 per cent of GDP at current market prices, says RBI. The GFCF in 2013-14 at current prices was 31.3 per cent of GDP. Investment demand will get better, but it’s likely to be an uphill task.

It means the cake is getting smaller but the hope remains.

This is what that not just the government but also the Opposition, planners, policymakers and the common people have to give a concerted thought to.

The road ahead is well known though not marked. NITI Aayog was supposed to play a pivotal role. However, its vision document under Arvind Panagariya was flawed. It has to change its style of functioning. Instead of coming out with documents in a hurry, it should hold parleys across the country to find out solutions to social and economic ailments.

The GST is a beginning but unless other taxes and cess are drastically reduced and a humane approach to taxation is adopted, the projected transformation may not be there. The GST has also not eliminated tax on tax.

The solution is not simple. Neither is it complex. The goal has to be increasing opportunities, protecting bank deposits, making banking cost-free, keeping utility prices like electricity and petroleum low and taking investment out of private coffers. It needs a centric approach with people having differences coming together.

Modi has the acumen and charisma to create societal dialogue and make everyone move together. The road is ahead. It has to be trudged with all others. India is ready for the transformation. The threads have to be put together.

Last updated: August 12, 2017 | 09:20
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