The government has fallen short in meeting the people’s expectations. People wanted an economic stimulus package to create jobs and spur growth, that has slowed of late. While it is working on a package for small and medium enterprises and exporters, we will have to see what shape this takes. The government also plans to upgrade educational and health services, but it’s still all on paper. Rural India is expected to see an improvement in its quality of life with 24x7 electricity supply. The SME sector is a major job creator and accounts for 40 per cent of India’s exports. One hopes the government will do hand-holding with self-help groups like Sewa to empower people to become self-employed.
There’s a lot of distress in India Inc’s ranks and its vital for the government to meet their representatives and see what can be done to remove the hurdles to growth. Meeting each sector separately is desirable as their issues differ, so that solutions can be worked out fast. A similar exercise is needed regarding private investment, which has dried up and may not revive for at least a year or two.
Perhaps some jobs can be created after work begins on the Sardar Sarovar Dam on the Narmada. But this won’t be enough to satisfy the 11-12 million people who enter the job market annually. Unless jobs are created, there could be discontent, that could erupt into protests. It is disappointing that the government kicked the can down the road by creating an Economic Advisory Council to give a structural direction to the economy. Does this mean the economy had no direction till now? It definitely reflects the huge mistake the Narendra Modi government made in disbanding institutions like the Planning Commission. It resulted in a drought of advice by economists and other experts, to the government’s detriment.
It’s surprising that the Niti Aayog, which replaced the Planning Commission, wasn’t up to the mark in giving economic direction. It was expected the government already had a plan as various ministries had been asked for suggestions last week. Mr Modi’s party colleague Subramanian Swamy has claimed that the PM has not been kept abreast about the state of the economy. The government owes it to the people to come out with a stimulus package to revive the economy given that this nemesis of slowing growth was brought about by demonetisation and the hasty implementation of the Goods and Services Tax, which former PM Manmohan Singh called “monumental mismanagement” and “organised loot”. The GST was expected to push GDP up by 1-2 per cent, but it seems to have had the opposite effect — maybe because, as West Bengal’s finance minister Amit Mitra earlier warned — it was flawed.