Dear Prime Minister,
Since this is the season for open letters, I thought I would pen one too. At the very outset, let me congratulate you on the remarkable win in the 2019 elections. It is a truly staggering victory, one which should be largely credited to the strength of your personality-driven politics and Amit Shah’s relentless organizational push. We have already seen the impact of the scale of your victory on a bedraggled opposition. Every day, in some part of the country, we hear of opposition leaders switching to the BJP. I don’t think this can be solely attributed to the misuse of the enforcement agencies as the opposition alleges. We are a country of the ‘ugta suraj’ (rising sun) syndrome where opportunistic politicians move rapidly in the direction of power. Its happened before in the Indira era when the Congress was the dominant party, its happening now when the BJP is the new political hegemon. We’ve already seen how this hegemonical politics has virtually rendered parliament infructuous: with an overwhelming majority in the Lok Sabha and a ‘manufactured’ majority in the Rajya Sabha, you can now pass every contentious bill without parliamentary oversight.
But I shall not delve too deeply on the issue of political immorality and the ‘Aya Ram Gaya Ram’ culture that reveals a complete breakdown of the party system. Nor shall I spend this column venting on the creeping majoritarianism around us. You surely know of several instances of lynching and mob violence linked to religious extremism. When a BJP Jharkhand minister is caught on video insisting that a local Congress MLA chant Jai Shri Ram, then you know just why a simple religious invocation has so rapidly become a provocative war-cry to intimidate fearful minorities. But again, I do not wish to focus on this despairingly polarizing issue since I know what the response will be: law and order is a state subject and the central government can do little to stop the violence beyond the occasional advisory. Moreover, I do not wish to be labelled an ‘urban Maoist’, ‘Khan Market tukde tukde gang-ster’ ‘anti-national’, and worse for speaking up for faceless fellow Indian citizens: in any case, the predictable narrative of ‘what-aboutery’ (what about Partition/1984/Kashmiri Pandits etc) has left me mentally exhausted.
No sir, I will neither lament on politics becoming a one party, two men show nor agonise on the not so silent fracturing of communal relations. Instead, I wish to draw your attention to the ‘real’ issue of our times: the health of our economy. It perhaps reflects the moral and intellectual bankruptcy of the media, and the tv media in particular, that we have expended so little mind-space discussing just why, nearly a month after the budget, the mood has turned so grim in the business community. I do not claim to be an economic expert but have been listening to credible voices warning of the deepening fiscal crisis and the impact this could have on government spending. Or on the long-simmering banking crisis that has engulfed more and more financial institutions, NBFCs in particular. Or on the failure to incentivize private investment and boost consumer demand. Or indeed reports of the steady flight in foreign capital.
Many of these concerns have been privately whispered pre-budget too, its only now that some of our industrial elite are beginning to slowly find their voice. After all, there is nothing like falling stock markets and a high tax regime on the ‘not more than 5,000 people in the super-rich category’ to make Indian industry suddenly discover their vocal chords. Their concerns are perhaps self-serving but they also do reflect a growing disquiet at the manner in which bureaucrats and policy makers in North Block are seemingly oblivious to the challenges being posed by onerous global headwinds and faltering domestic indices. It is almost as if the constant drumbeat of having won such a big electoral victory means that the ‘professional pessimists’ (your words sir, not mine) are to be kept away at arms length, fearing that they could gate-crash the continuing celebrations. The feel-food factor, after all, is addictive, why do you need the nay-sayers to even mildly suggest that the Emperor for once may be losing his well-tailored clothes or that the 5 trillion dollar economy is only a dream?
It is true that so far sir your government has been remarkably successful in separating the economy from politics, a situation where economic health has little or no bearing on electoral success. Critics argue that this has been done by either fudging or suppressing crucial data or by shifting the blame all too easily on the inherited 70 years of flawed Nehruvian economics. My own view is that your own relentless emphasis on pro-poor ‘welfarism’ has created a large political constituency of potential beneficiaries of government programmes who don’t really care if the GDP is six or eight per cent so long as they get, or at least can aspire for a pucca house, an LPG cylinder or a toilet. But someone must pay for vote bank welfarism, and sooner or later, the numbers do begin to catch up. The discrepancy is already reflected in the mystery over the Rs 1.7 lakh crore missing in the budget documents: clearly, tax collections in the last financial year have been much less than expected and with a slowing economy, the fear is the numbers could only get worse.
Which is why the government needs to come clean on the fiscal crisis. Making the finance secretary the fall guy for the politically contentious decision to raise monies abroad isn’t a solution. Nor can the answer lie in forcing (or should one say ‘robbing’) the Reserve Bank of India to part with its well-protected funds (will LIC be next?). Nor can it lie in so-called disinvestment where one public sector giant is encouraged to buy out another. Or indeed in hiking fuel prices to a point where the middle class starts to really hurt. Or by imposing a multitude of direct and indirect taxes which eventually become a disincentive to investment and growth. Nor can it lie in astute headline management where emotive issues like Article 35 A or mandir-masjid hijack the news agenda. No sir, the first step to addressing the crisis is to snap out of denial and accept that the ‘achche din’ are over. Then, get down to the ‘real’ business of getting business back on track.
Post-script: This open letter should ideally be written by 50 top industrialists who should call for a structured dialogue with the government on the economy. Sadly, with one or two notable exceptions, I rather doubt that the cheerleaders from Indian industry who almost reflexively give every budget 10 marks on 10 would dare show the mirror to government.