Will Jaitley play rescuer or will the Opposition prevail?

Photo: AFP
Photo: AFP

India is now described as the world’s fastest economy with a growth rate of 7.3 percent despite slowdowns faced by Europe and the rest of BRIC countries – Brazil, Russia and China. However, what is the reality behind this glossy picture as the NDA government prepares to announce their second budget?

Reports from different areas on the economic front indicate that the country is facing huge crisis and uncertainties. The lack of private investment, rising unemployment, growing fiscal deficit, declining exports, widening disparity between the rich and the poor, rising food inflation and most importantly the crisis in the country’s farming and agricultural sector and distress in rural areas; do not offer a vision of impending Acchhe Din.

Just like the past two parliament sessions, opposition parties has already made it clear that they have enough ammunition to take on the government this time. KC Tyagi, the national spokesperson and Rajya Sabha MP of Janata Dal (United), tells TEHELKA, “We are not against reforms, but it should not target some set of people. We will not support disinvestment and other privatisation plans.”

“There are a number of issues which the opposition parties want to raise in the house. Dalit student Rohith Vemula’s suicide, saffronisation of higher education, the government’s inability to provide relief for farmers, role of the governor in Arunachal crisis, the government’s flip-flop on foreign policy especially its relation with Pakistan and the corruption allegations against Gujarat chief minister,” he says. It’s clear that the budget session will be a stormy one and the Opposition may not allow the government to pass many crucial bills.

Economy is also not an exemption from this scenario. Many of the Indian corporate captains expressed anguish about the current atmosphere. So considering the political climate and the growing disenchantment among people against the Modi government for the last 20 months, it needs to prove that it can deliver as it promised. For instance, the government does not have high hopes of passing the Bill this time in Rajya Sabha, where ruling party does not have a majority.

Many point out that the Modi government’s inability to address issues facing rural areas and farmers is the biggest concern. The government’s quarterly estimate of GDP says that while the country’s growth rate is 7.3 percent, in the third quarter, from October-December, the rural farming sector faced a one percent contraction and the current finance year only 1.1 percent growth rate is expected.

In Maharashtra alone, 3228 farmers committed suicide last year. According to many critics there have been no remedial measures to address this. Viju Krishnan, joint secretary of All India Kisan Sabha says that the greatest betrayal of Narendra Modi-led BJP Government has been on the agrarian front.

“The government has informed the Supreme Court that they are unable to meet their promise of fixing Minimum Support Price (MSP) at least 50 percent above the cost of production as recommended by Swaminathan Commission. It has earlier issued an order banning procurement of paddy and wheat from states which give bonus to farmers over and above the MSP, decontrolled agricultural inputs leading to high costs of cultivation, dismantled the extension and procurement mechanism, has not built any new irrigation infrastructure or storage facilities and has scaled down the MGNREGA,” he says. Two successive droughts have added to the distress. In the last financial year, the agricultural output contracted by 0.2 percent.

The general consensus is that unless an emphasis is given to address issues in farming sector, the projected GDP figures of 7.9-8.00 percent will remain a pipe dream. With a lack of demand in domestic as well as global economy, attracting private investment is also a problem for the government. In the current financial year, the country’s exports have declined by 12 percent, which is the lowest in four years. Several export-oriented sectors such as textile and steel are struggling because of the global slowdown.