Economists believe that although there is economic bullishness in government, there is economic gloom in reality in the country. Fiscal deficit as a percentage of GDP has declined from 4.5 percent in 2013-14 to 3.5 percent in 2016-17. Farm output is setting new records. India’s trade deficit fell from its highest level of $ 190.3 billion in 2012-13 to $ 118.7 billion in 2015-16, while FDI during April-December 2016-17 was $ 31.2 billion compared to $ 29.4 billion in the year-ago period. Our Associate Editor, Navodita, takes a hard look at the common man’s plight, in this backdrop. A rickshaw puller or a daily wage labourer can barely manage a meal a day. Here’s a new weekly column, every Monday, exclusively for Different Truths.
You step out of your house and you realise how tough it is to earn a living and to make both ends meet. The next thought is – it’s still easier for you, what about those earning so much lesser! At every corner, on the streets, you see the daily labourers congregate to get work on a daily basis. They might just have to go without work, which possibly means no food for the day or delayed payment of fees for their child. Their staple diet is, as I had heard, rotis, some onion or chillies or a potato vegetable. It is only occasionally that they try to make a green vegetable, which is expensive or a ‘luxury’ item on their list of edible items. On top of that the steep price rise!
Alarming food price rise recently has taken its toll on their daily food habits. Few labourers actually manage to get their ration cards ready for economical purchases. So when the prices rise, it is a nightmare for buyers, vendors, and citizens, all of them alike. The soaring prices have worried the citizens to the extent that they choose not to buy vegetables at all. People have now got to spend Rs. 80/- for a kilo to buy tomatoes in some areas and Rs. 60/- a kilo to buy onions from the market. The vegetable vendors in the city are worried where sales have dropped drastically. The vendors are worried and blame the lack of supplies and the Goods and Services Tax (GST) for the price hike.
My vegetable vendor Abhishek said, “The prices of onions and tomatoes have hiked from Rs. 40/- to Rs. 60/- per kg. Earlier, during the winter season, all these vegetables were available at a very low rate. With the price rise, the supply of onions is going down drastically.”
“It’s all because of the low supplies. The tomatoes never cost this much, but the lack of supplies is a major reason behind the price rise of tomatoes,” said another vendor.
One of the consumers, Ashrita, said, “Any dish is incomplete without onion or tomatoes but the price hike is hindering us to buy the most important ingredient of our meals.”
Another buyer said, “We thought the new government will bring positive changes but nothing is being done till now. These issues are dealt with every year, but it is the responsibility of the government to handle it efficiently.”
Economists believe that although there is economic bullishness in government, there is economic gloom in reality in the country. In the context of a subdued global economy, India is a bright spot among the major countries – growing at 7.1 percent in 2016-17 and projected to grow as per IMF estimates at 7.2 percent in 2017-18. The fiscal deficit (the difference between the government’s revenues and expenditure) as a percentage of GDP has declined from 4.5 percent in 2013-14 to 3.5 percent in 2016-17. Farm output is setting new records. India’s trade deficit ( the difference between exports and imports) fell from its highest level of $ 190.3 billion in 2012-13 to $ 118.7 billion in 2015-16, while FDI during April-December 2016-17 was $ 31.2 billion compared to $ 29.4 billion in the year-ago period. The positive sentiment has rubbed off on the stock exchanges, too, which are trading at all-time highs. However, all in the industry are not optimistic.
M.K. Venu, Founding Editor, thewire.in told NDTV, “Agriculture sector is bad, the construction sector is very sluggish and these are the two biggest employment providers in the economy.” With regard to the factors contributing to the rise in the general price-level, one may mention that on the demand side, the following factors have operated: the rapid growth of population, increase in incomes, rising non-development expenditure of the government and increase in money supply. On the supply side, the factors which have influenced price level are following: inadequacy of agricultural output, the inadequacy of industrial output and high-priced imports.
At the recently held HT Leadership Summit, Mukesh Ambani recalled that he in 2004 had predicted about India – then a $500 billion economy – hitting $5 trillion in 20 years. Ambani was optimistic that India can become more prosperous than the US and China within this century. He, however, went on to add that India’s developmental model will be ‘equitable and inclusive’, which is a definitely a big no-no. Even within the ‘Gujarat model’ of Narendra Modi, you can spot the ‘problem areas’ where there has been inequitable distribution and is far from ‘greater good of the greatest number’.
As Gujarat elections are underway, the ‘Gujarat model’ of development continues to pose problems for the local residents and citizens. In a 2011 Economic and Political Weekly paper, Hirway and Shah argued that the fruits of rising prosperity in Gujarat were not being shared widely. It was more of a pro-business model, which has fared poorly in social indicators of development like poverty alleviation and Human Quality of Life Index (HQLI). Good economics is good politics. So how the government projects its growth trajectory will be the determining factor in the upcoming elections – now, and in 2019, too.
Photos from the Internet
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people in Kanpur.
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