Govt review overlooks Modi’s greatest failure

India’s commerce minister Piyush Goyal’s faux pas over the discovery of gravity could not have come at a worse moment – just as the Modi government was gearing up to “celebrate” 100 days in power after winning a historic majority for a second term.

Goyal, who served briefly as a finance minister in Modi’s first term, was trying to defend Doomsday predictions of the Indian economy suffering a structural and systemic slowdown. In regard to concern about the slump in the country’s Gross Domestic Product (GDP), Goyal got Albert Einstein mixed up with Issac Newton’s contributions to modern science.

“If you’re looking at a $5 trillion-economy, [the] country will have to grow at 12%, [but] today it is growing at 6-7 %. Don’t get into those calculations. Mathematics never helped Einstein discover gravity,” Goyal said. When people began to point out that his – Newton’s discovery occurred in 1687, long before Einstein was born, Goyal kept issuing clarifications pointing out that while Einstein did use maths, it had little to do with his “discovery of gravity”.

Meanwhile, his cabinet colleague and union Finance Minister Nirmala Sitharaman tried to play down the crash in automobile sales for several quarters. Instead, she blamed it on “millennials” who “preferred taxis” instead of owning cars.

These gaffes took the headlines from an elaborate “report card ” that the Modi government had prepared to toast their 100 days in power. The national Information and Broadcasting Ministry released a booklet of its “historic and landmark decisions at an unprecedented scale.”

The Modi 2.0 government said that its first 100 days have seen “development, trust and big changes”. But the details reveal more misses than hits.

Economic slowdown

The most crucial setback for the BJP has been the fall in India’s GDP, which slipped to 5% – the lowest in six years – in the first quarter of the 2019-20 fiscal year.

Indeed, the country currently faces a major economic slowdown because as many as eight sectors have recorded growth of less than 2%. The automobile sector, which is on an all-time low was one of the early indicators. India’s biggest carmaker, Maruti Suzuki, shut down its passenger vehicle manufacturing at two plants for two days in September, after cutting production by one-third in August.

Meanwhile, the Indian rupee has become the worst-performing Asian currency after depreciating 3.65% against the US dollar in August.

The government’s plan to merge 10 public sector banks into four entities has also raised concerns about further job losses. With unemployment at 6.1% – a 45-year high – the current economic climate is harsh. The Modi government has also been accused of suppressing data on unemployment. Experts have blamed demonetization, followed by poor implementation of the Goods and Services Tax as reasons for the economic slowdown.

Former prime minister and noted economist Dr Manmohan Singh predicted this slowdown two years ago. After the new GDP numbers came out, he made an even more dire prediction: “In my estimate, it will take a few years to get out of this slowdown, provided the government acts sensibly now. We must not forget though, that it was the blunder of demonetization, followed by faulty implementation of the GST, that triggered this slowdown.”

Singh also said that Reserve Bank of India (RBI) data shows that gross bank exposure to loans for consumer goods has seen a steep and constant decline since late 2016 — that is, following demonetization.

The BJP government, in an unprecedented move, also dipped into the RBI’s resources, receiving a transfer of 1,700 billion rupees (about US$25 billion) to boost the economy. This has now left the central bank with less reserves in the event of a financial crisis.

In its first budget, the BJP said it would make India a $5-trillion economy by 2024 through focus on behavioral change, increasing private investment, structural reforms in agriculture and growth of Small to Medium Enterprises. But it later announced a roll-back in surcharges on income tax for foreign investors. This came soon after foreign portfolio investors (FPIs) pulled out over 200 million rupees from India’s equity markets in July and August.

The Kashmir imbroglio

The BJP’s booklet hailed the ”full integration of Kashmir into India” after the abrogation of Article 370 in the Constitution. It claimed that the northern region will now be on par with other states and union territories in terms of development. But an analysis of government data showed that Jammu and Kashmir fared better than most others on development indicators, from life expectancy to infant mortality, literacy and poverty.

Indeed, a number of market watchers are now saying that the move on Kashmir was ill-timed, given the country’s ongoing economic slowdown. With the global economy on tenterhooks, investors pointed out that the slowdown is likely to destabilize the region even further and scare investment away from India.

Kashmir has been under an unprecedented lockdown since August 5. Political leaders have been put under house arrest and communication has been suspended in many places. The government’s claim of people being overjoyed at the move was challenged after international media reported protests and unrest. National Security Adviser Ajit Doval claimed that not even a bullet had been fired in the region, until news reports surfaced of people with pellet injuries and the death of a teenager.

Two-thirds of parliamentarians in the lower and upper house backed the move, but there has also been considerable criticism. And in response to petitions challenging the constitutional validity of the decision, the Supreme Court decided to convene a bench to consider the matter. Yesterday, it said that Delhi must ensure that normal life is restored in the valley. The United Nations Human Rights Council has also urged India to end the lockdown.

The BJP is a Hindu nationalist party and its second tenure has also seen a rise in intolerance and crimes against Muslim minorities. Incidents of mob-lynching have increased and some victims were forced to say the Hindu chant ‘Jai Shri Ram’ (Glory to Lord Ram).

According to the hate-crime watchdog, crimes against Muslims have risen in recent years. As many as 254 religious identity-based hate crimes were reported between January 1, 2009 and October 29, 2018. And 90% of these were reported after May 2014, when the BJP came to power.

Bills rushed

Modi, meanwhile, claimed that a record amount of work was done in Parliament, with 30 bills passed by the lower and upper houses. However, many were passed in a rush, with the BJP cleverly using its majority in the upper house.

It passed the Muslim Woman (Protection of Rights) Bill, which made “triple talaq” – instant divorce among Muslims – a criminal offense. The BJP called it a landmark decision despite the fact the Supreme Court had already ruled the practice illegal. It had repeatedly tried to pass a bill criminalizing the practice, but it was always blocked by the upper house. Civil society groups said the bill was targeted at a Muslim minority and criminalizing the practice was unfair.

This was one of 14 bills, including the abrogation of Article 370 relating to Kashmir, that was approved with zero scrutiny by a select parliamentary commission.

Finally, the National Register for Citizens (NRC), aimed at identifying ‘illegal immigrants’ in the northeast state of Assam, rendered some 1.9 million people stateless.

The ruling party has consistently pushed for this. Indeed, former BJP president Amit Shah expressed interest in implementing it across the country if the BJP was returned to power. At a rally in West Bengal, before the 2019 elections, he said: “The BJP will remove all infiltrators from the county. [And] all the Hindus and Buddhist refugees..we will find each of them, give them Indian citizenship and make them residents here.”

Assam has witnessed immigration since it was split from East Pakistan (now Bangladesh) after India won independence in 1947. While the 1.9 million people left off the NRC list try to prove their citizenship, India has started building the first of 10 huge detention centers.

How much these ‘achievements’ deserve celebrating is another thing altogether.