Can the Indian Economy Swim Against the Tide of Scams, Scandals, Demonetisation and GST?

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Populist of Pragmatic Budgets before Eight State Elections in 2018-19? 

Navodita Pande

Scams and scandals often slow the growth rate of the Indian economy, which is already ailing. The latest figures released by the Central Statistics Office about GDP growth of 6.7% show a negative trend despite ’s farcical narrative of a turnaround. The investment climate remains just as bad; as the slowdown was exacerbated by demonetisation announced in the third quarter of 2016-17, and the goods and services tax (GST) that came into effect on July 1, 2017. The growth rate for financial, real estate and professional services remains low as for the agricultural sector have also been recorded the lowest in the second quarter of 2017-18, analyses Navodita, our Associate Editor, in the weekly column. A Different Truths exclusive.

As former telecom minister A. Raja and DMK Rajya Sabha MP Kanimozhi and others are acquitted in the 2G allocation scam, it has sent the CBI (Central Bureau of Investigation) and ED (Enforcement Directorate) up for some task ahead.

The Enforcement Directorate said the Delhi court appreciated the material evidence related to the offence of money laundering at the time of framing of charges, but the same material appeared to have not been considered while deciding the prosecution’s complaint under the PMLA (Prevention of Money Laundering Act). Accordingly, it will appeal against the judgement on a ‘number of grounds based on the facts as well as provisions’. CBI made similar complaints against the decision on 2G spectrum case saying the court had given precedence to oral evidence of the defence over the documentary evidence furnished by the prosecution, against the established law. As ED and CBI gear up to take the matter further for justice, one is really left wondering whether India as a ‘developing’ has become a hub of scams with some prominent names and celebrities also being questioned for amassing huge amounts of unaccounted wealth. It is the time in Indian law to actually re-define what is a financial irregularity and what is ‘criminal misconduct’ as this case proves that it is hard to investigate cases with notional inflated figures based on some thesis which may not stand the scrutiny of the law.

Scams and scandals often slow the growth rate of the Indian economy, which is already ailing. India is a vast country with different sectors recording growth at their own pace. The latest figures released by the Central Statistics Office about GDP growth of 6.7% show a negative trend despite government’s farcical narrative of a turnaround. The investment climate remains just as bad; as the slowdown was exacerbated by demonetisation announced in the third quarter of 2016-17, and the goods and services tax (GST) that came into effect on July 1, 2017. The growth rate for financial, real estate and professional services remains low as for the agricultural sector have also been recorded the lowest in the second quarter of 2017-18. It is only the manufacturing sector which registered a growth of 7% in the second quarter of 2017-18 as compared to 1.2% in the first quarter. Rightly so, then, the Indian government should focus on boosting the farm and the rural sectors in the budget for the coming fiscal.

In 2018 and early 2019, there will be eight state elections in the heartland, leading up to a national election of 2019. On February 1, Finance Minister Arun Jaitley is expected to present his last full-year budget, for the 2018-19 year that begins April 1. Jaitley has signaled that his priority will be allocating more funds for rural and infrastructure sectors. The government definitely can’t afford farmers’ anger anymore, and will try to boost the economic growth and pump in more funds in the farm sector. Higher procurement prices for different crops could be offered to farmers following lower output this year. Some officials from the finance ministry have also indicated that there might be more tax reforms coming the citizens’ way in the wake of the tax rate cut in the corporation tax by the US Senate.

Moreover recently, NITI Aayog has helped draft the government the first ranked list of 115 backward districts in the country. Backwardness is manifested in various parameters (and the lack of them) like health and education, infrastructure and employment, and poverty. Khagaria in , Pashchimi Singbhum in Jharkhand, Mewat in Haryana, and Shrawasti in Uttar Pradesh are some to name a few. With the gap between rural-urban prosperity widening, human development index and various development studies consistently demonstrating stark regional disparities hidden inside the growth story, the government aims to model a scheme as a special thrust to uplift the laggards and balance intra-regional development.

The government has also failed in making headway in the land acquisition and labour law changes which are important for pushing infrastructure development and job creation. Market expert, Ajay Srivastava of Dimensions Consulting told ET Now that the government is unlikely to make a populist budget despite the state election win in Gujarat and Himachal Pradesh because it has no scope to tinker with taxes after the implementation of GST, except for the tax. The government has been maintaining fiscal prudence as it is unlikely to derail from the fiscal consolidation roadmap maintained by it.

So as we eagerly wait for the upcoming budget in February, it seems the farmers are going to be one lot who will benefit more than even aam aadmi. Unemployment will be dealt with by a national employment policy, which is likely to be announced in 2018. However, how many people it will benefit in the long run is the main question. Another question is – will it be a populist or a pragmatic budget?

©Navodita Pande

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#Demonitisation #AamAdmi #Budget #CentralStatisticsOffice #Unemployment #ScamsAndScandals #PreventionOfMoneyLaunderingAct #AgriculturalSector #Aamonomics #DifferentTruths

Navodita Pande

Navodita Pande

Navodita Pande has been practicing yoga since she was 9 years old in Iyengar Yoga. In April 1995, she performed at the International Yoga Seminar. In January 2003, Navodita taught at Hare Rama Hare Krishna Mandir in New York. Navodita had a Yoga show on NDTV 24x7 and was also the official yoga trainer for Miss Delhi contestants in 2007. She currently teaches Yoga and Reiki to
people in Kanpur.
Navodita Pande
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