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Economic revival or target practice?
by Virendra Parekh on 14 Jun 2012 0 Comment

Alarmed by the economic growth hitting a nine-year low, the government has announced a slew of measures to stem the slide, place the economy firmly back on the road to 9 per cent growth, and boost exports. A large number of infrastructure projects requiring billions of rupees will be awarded this year or soon as part of the plan announced after a high-profile inter-ministerial meeting chaired by the prime minister.


As said in the article “GDP Numbers: A wakeup call in the wilderness” (June 9), for long, India’s policy makers took sturdy economic performance for granted. Double digit growth that would propel the country to economic superpower status was almost regarded as preordained. The bubble is now being burst rather cruelly. Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low, both in the March quarter at 5.3 per cent as well as in 2011-12 at 6.5 per cent. Industrial production virtually stagnated in April. With inflation edging up and GDP slipping, India is sliding into a stagflation from which it may be hard to recover.


Sharp observers like The Economist have been quick to hint that the fast period of 2004-07 was a one-off blip driven by a global boom, an uncharacteristic bout of tight fiscal policy and an unsustainable burst of corporate optimism; that India’s natural rate of growth is 6 per cent. Rating agencies are downgrading their forecasts for India’s growth.


The meeting convened by the prime minister was obviously an important visible attempt to do something in response to this challenging situation. It did not come a day too soon, for global and domestic investor sentiment about India is now at a tipping point. If the current state of listlessness and sloth continues, India is in danger of losing its standing and economic momentum built up over two decades through the hard work of successive governments and policymakers.


The meeting was attended by ministers and secretaries of what the Prime Minister’s Office (PMO) described as “key” infrastructure industries: power, railways, roads, shipping, civil aviation and coal. At the meeting, targets were collectively agreed on and finalised for the entire year.


As per the plans announced, two projects for brand new major ports will be taken up during the year in Andhra Pradesh and West Bengal at a total investment of Rs. 20,500 crore for an aggregate capacity of 116 million tonnes. 9500 km of roads will be awarded for construction and 4360 km of roads for maintenance in the current year. Work on Itanagar airport, costing Rs. 2100 crore, would be commenced and three new greenfield projects will be awarded in 2013-14. These will be  at Navi Mumbai, Goa and Kannur.


Besides, new international airports will be declared in 3 or 4 of the following cities -- Lucknow, Varanasi, Coimbatore, Trichy and Gaya. It has also been decided that an airline hub policy would be finalised and hubs would be operationalised at Delhi and Chennai by March 2013.


In power, the capacity addition target for this year has been fixed at 18,000 MW, including 2,000 MW to be added by the Kudankulam Atomic Power Project. Coal India will dispatch 470 million tonne of coal to all sectors, an increase of 8.8 per cent. PPP projects for railways include Dedicated Freight Corridor for the Sonnagar-Dankuni, and an Elevated Rail Corridor for Mumbai.


The plans are unexceptionable. Implemented, they would certainly increase investment expenditure in the short run and remove supply constraints in the long run. However, there is no mention of where the extra money will come from, no deadline for the completion of the projects. As usual, declaration of intent is regarded as a substitute for action.


Too many of the plans are no more than paper targets—awarding of contracts and finalizing of projects rather than real achievements. It is common knowledge what the true bottlenecks for new facilities are: land acquisition and environmental clearances. Both processes are political hot potatoes and are currently entangled in red tape. The land acquisition law continues to be debated.


The environment ministry is at war with the ministry of road transport and highways and, in fact, with practically most of the key infrastructure ministries. Many suspect that it is bringing back the hated licence-permit raj through the backdoor. Yet, the environment minister and the environment secretary did not attend the meeting. “Collective ownership” over infrastructure targets apparently does not include the ministry of environment and forests. Why?


The prime minister rightly said that growth had run into “turbulent weather” and would require a booster dose of massive investment in infrastructure. “Turbulent weather”, alas, could also be a great metaphor for evading responsibility, blaming Europe for the government’s red tape, regulatory dithering and the failure to provide a consistent policy environment. Even as the PM spoke of 9500 km of highways to be constructed and 4300 km to be maintained, the National Highways Authority of India does not have a head. Railways minister Mukul Roy conveyed his commitment by skipping the PM’s meet altogether. His Great Leader wants about Rs. 25,000 crore; otherwise she won’t say yes to anything. 


The prime minister realizes the problem of coordination between parts of the government. Verily, that may be defined as the central crisis of the UPA. Its ministries work at cross-purposes. The coal and power ministries, for instance, are sparring over fuel supply agreements. “I would expect,” he said, that ministries would “very expeditiously resolve any inter-ministerial differences or turf battles that may arise as we move forward.” This is optimism gone overboard. Quite often, the ministries have been set against each other—and Dr Singh has not stepped in to resolve the tussle. Instead of expecting his ministers to resolve their differences, he should have warned them that the PMO would resolve the issue for them, and not necessarily to the liking of either side.


As regards exports, Commerce minister Anand Sharma has set an export target of $500 billion by 2013-14, assuming that the Indian exports that rose 21 per cent in the last fiscal to reach $304 billion will do better. Of the seven key measures the minister announced, two stand out. The duty-free scrips issued against exports can now be used for payment of excise duty on domestically sourced inputs. Currently, these scrips can only be used to pay duties on imported capital goods and raw materials. The new measure will provide a level playing field to local vendors vis-à-vis foreign suppliers of inputs. In another measure, interest subsidy for exporters has been extended by a year. No one will cavil at that either. While these measures, coming on top of rupee’s depreciation, are good for exporters’ bottom line, they provide no reason why trade will rise.



The author is Executive Editor, Corporate India, and lives in Mumbai
User Comments Post a Comment
The Hindus although 66% of the population once it is divided between the congress ,BJP etc they become a political minority. The King makers are the rest, the minorities. Politicians pander to the minorities and generally against the majority to stay in power. This political advantage is used to gain more economic power ably assisted by the Middle east and europe who cunningly use the situation with economic and other means such as secularism to undermine the power of the majority and make inroads into hindu society. In addition most majorities are farmers and the present economy is geared to the business community.The Hindus have to abandon secularism and start demanding economic rights from the government by energising the agricultural sector and reasserting their political power. Democracy unfortunately makes majorities minorities whilst the propaganda machine of the christians will be promoting an agenda complaining about a non existent majoritism. The hindu majority is only an illusion. This is true of all Asian countries. The result is to make a majority a minority as in South Korea.
vas
January 19, 2015
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@Vas very well said
Sitha
January 19, 2015
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WHen the urban hindus did not support jallikattu, what kind of tradition do they intend to save ?
senthil
January 19, 2015
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It has been my experience that those who are most hard-eyed about matters of faith are usually pretty ignorant about the tradition they ostensibly defend.

Hinduism has existed in a very long cycle of many thousands of years stretching back to the ordering of the Vedas. Our wisest sages foresaw how that cycle would go and prepared us with the teachings that now constitute the core of Hindu belief.

A singular part of that belief system is the four stage decline of virtue. We are now beginning to climb out of the darkest part of that cycle, the Kali Yuga.

That climb has been characterized by a growing appreciation of the wisdom of our core values and traditions, not just in India but globally.

Meanwhile, the virulent missionary strain of other belief systems, including that of Science, has begun to weaken.

Christianity is now virtually dead in much of Europe, with percentages of believers in national populations averaging below 10 in most countries. In the United States, the actively religious percentage of Christians in the population is larger but there too it has been in secular decline.

I need not waste time and space describing the state of the Muslim world. It is in a state of great disarray, with violence rampant in many societies.

Much of that violence is the result of foreign manipulation of jihadist politics. Historically, that began after the fall of the Ottoman Empire after World War I, when its Arabs territories came under British rule. Prime British instruments then were the Wahhabis in Saudi Arabia (a state Britain created), and the Egypt-based Muslim Brotherhood, which had its first base in the British "Canal Zone" of Egypt. After WW II, again under British tutelage, the Brotherhood became the prime terrorist weapon against communists (and everyone of liberal persuasion) in the Middle East. With the Russian invasion of Afghanistan in 1979 "Islamic terrorism" became a NATO project. The state of the Muslim world today, including in Western societies, is a direct karmic result.

Now, if we look at India more closely, the main Hindu revival came with Mahatma Gandhi. To fight that resurgence, the British promoted the Hindu Mahasabha, using it as a counter to the Muslim League to manipulate India into communal violence. That ended up creating Pakistan, which has been Britain's proxy ever since.

In such a situation, the virulent Hindu Mahasabha strain of "Hindu" is the greates danger to Hinduism. The celebration of the murderer Naturam Godse is apt indeed!

Hindus now need not fear for their faith. After the long decline of dharma in the Kali Yuga it is now resurgent. That means more and more Hindus becoming aware of the clarity and strength of their own faith. We need not attack other faiths or fear their efforts at conversion. But we do need to be aware of what is happening, and why. Realistically. Not fearfully.
Bhaskar Menon
January 19, 2015
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Brillant..
Ritu Datta
January 19, 2015
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A remarkably accurate account of the present situation. This article must be widely disseminated amidst the Hindu population, both English readers and the many non English readers.

I suggest that Shri Parekh have it translated into the vernaculars.
Dr. Vijaya Rajiva
January 19, 2015
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Virendra Parekh's article is a fitting reply to the likes of Bhaskar Menon. Well done.
KPN
January 19, 2015
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@Bhaskar Menon
Do you have any kind of political sense whatsoever or is wishful thinking your way of avoiding tackling the problem thereby making it worse. No surprise why the hindu population has declined so much in your native state.

Every point that you make is actually what the author is saying is a cause for concern.

First, regarding falling numbers of christians in the.west,they may not be church going Christians but they still remain nominally and culturally Christian just as there are hindus.who do not goto temple but still identify as hindu.
Second, because of this drop in church going Christian s the vatican has decided to turn to places like India for new converts who will actively follow and spread the gospel which is at our expense I.e the hindus.
Third, the rising violence in muslim lands can very easily spread to our lands given the huge population in the Indian subcontinent. It is a fact that the hindu.space from Indonesia to Afghanistan has shrunk and no amount of philosophising can hide that truth.
And finally, partition was actually a good thing, the regret is that it did not happen completely. There would have been no chance of a Modi being elected in unpartioned India, as a 25 to 30 percent "minority" the y would simply not have allowed it.
Mr. Menon, you and other hindus like you need to wake up and start facing the harsh ground reality, your high sounding vedic philosophising will not be of much use in the face of these looming threats.
Obs
January 20, 2015
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" " The case of our liberals is no different . They denounce Hinduism in public, but consult astrologers in private and get 'PAATHS' and 'HAVANS' done in closets. They glorify the 'MASSES' but denounce the sentiment of the 'MASSES' for [Lord] Rama. They denounce our tradition, donning modernism, but hail every politician with a casteist plank . They proclaim 'INDIA IS NOT ONE NATION', and give as proof the Muslims' different perceptions of our past. And simultaneously proclaim ' MUSLIMS ARE AN INTEGRAL PART OF INDIA, THEY ARE AS LOYAL TO INDIA AS ANYONE ELSE ', and give as proof the performance of Muslim soldiers in wars against Pakistan. Every effort to remind us of our commonalities, they denounce as a design to swallow up the Minorities. And then the absence of fervour for those common elements they proclaim as proof of OUR NOT BEING ONE MATION ".
Arun Shourie - " A Secular Agenda " (Rupa & Co) - pp-26 ]
H.Balakrishnan
January 20, 2015
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Please compare Islamic demography of Europe with Indian subcontinent
to understand our precarious state of Hindus.
Shrikant PP
January 20, 2015
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Land from Afghanistan to Indonesia was once part of Hindu civilization.You are right.In next 100 years Hindus may become outsiders in their only land.Pl refer to the screaming head lines,breaking news and fuming debates about one BJP MP talking of four children.No one has ever spoken about "four wives" or churches in Kerala openly advocating more children.Only redeeming aspect is the implosions within Islam and dwindling numbers of faithful Christians in Europe and north America, awareness among Hindus about dangers of religious conversions and about 100 crore Hindus coming closer to 50 crore Buddhists living in Bhutan,Myanmar,Nepal,Sri lanka,Vietnam,Korea,Japan and China [ 24 crores].Much despised "clash of civilization" may take place in this century to settle the issues for this entire millennium.
Jitendra Desai
January 20, 2015
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Regarding Obs' statement to Bhaskar Menon: "your high sounding vedic philosophising will not be of much use in the face of these looming threats."

Correction, Bhaskar Menon's "philosophising" is New Age. It is not Vedic/Hindu. Vedic would be Sayanacharya and the likes.
anonymous
January 22, 2015
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To Senthil, who wrote: "WHen the urban hindus did not support jallikattu, what kind of tradition do they intend to save ?"

Not all "urban" hindus sided with Radha Rajan. On the other hand, it is true that these would have contributed little more than moral support or passing about links to your and others' articles on the subject to relatives.
anonymous
January 22, 2015
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Virendra Parekh's article ends by asking "The question is: what is the response of normal, average Hindu? On the answer to that question depends the survival of Hindu civilisation."

The answer is that every right-minded Hindu must participate in facilitating Ghar Wapasi. Every Hindu must actively engage in returning Indian converts to Hinduism. Too often, internet Hindus have issued comments about how RSS and VHP must look into this or that matter next, while washing their own hands clean once they've issued the command to others. But we are all responsible and we may all take up that responsibility. We are all part of the Hindu sangha who must serve the rashtra and the sangha. And the best, perhaps only, way this is served is by aiding the Ghar Wapasi movement in whatever way each of us can.

Do not passively accept that some Indians are now christians or muslims, because they certainly look at all Hindus as potential converts. This is a war they started but that at last every Hindu may participate in, to neutralise the enemies and regain what we have lost and protect the Dharma. Every Hindu must turn every occasion into an opportunity to help lost Indians return to the ancestral Sanatana Dharma. Or at the least, to liberate converts from the stranglehold of the destructive religions. Hindus must stop being passive. Be active for the Dharma. Try everything and develop means for liberating the enslaved minds, and share your successes with other Hindus, and the means you used.
anonymous
January 22, 2015
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The recommmendation of 'anonymous' to average Hindus to do all they can to facilitate 'ghar wapsi' of Indian Muslims and Christians is indeed very good. I would even go as far as to say that the survival of Hindu civilization in its original homeland depends largely on the success of the 'ghar wapsi' programme launched by VHP. Will the BJP governments at the centre and in the states dare to support and facilitate 'ghar wapsi'?
KPN
January 22, 2015
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