By Dr. Santosh Kumar Mohapatra*
China and India are the two emerging economies in the world. Since China and India are the two most populated countries, the comparison is made between both on different aspects especially GDP growth and development. The GDP of the world economy is driven by the growth of both countries. But China has grown faster than India. Forbes magazine (2019) pointed out that in the 1980s India and China were on par, but by 2018, China’s per capita income grew to 3.5 times India’s.
However as per the latest data, in 1987, the GDP (Nominal) of both countries was almost equal; even in PPP terms, China was slightly ahead of India in 1990. Now in 2021, China’s GDP is 5.46 times higher than India’s. On a PPP basis, the GDP of China is 2.61 times of India. China crossed the $1 trillion mark in 1998, while India crossed nine years later in 2007 on an exchange rate basis. The per capita rank of China and India is 56th and 144th, respectively. “Why China flew, India just grew?”
Forbes magazine (2019) answered that it was because of the barrier-free autocracy in China and nightmare democracy in India. To drive home its point, Forbes compared how China constructed the Three Gorges Dam on the Yangtze River with how India built the Narmada Dam. While China completed it in a decade, India took 48 years to complete the Narmada Dam due to Narmada Bachao Andolan (NBA). Forbes magazine attributes delays to democracy by stating that agitation is possible in democracy only.
Forbes pointed out that Democratic India’s Narmada Dam took five times longer to build compared to autocratic China’s. Why, then, wouldn’t China fly over just growing India, asked Forbes? However, the Economic commentator and Editor of Thuglak magazine S Gurumurthy, agree on certain points of Forbes but says the Forbes magazine missed the wood for the trees. He blames the coalition government and appreciates the Modi government in his article titled “ India 1989-2014 and after — a paradigm shift.
According to him, for 25 years (1989-2014) India had only been wobbly, compromising coalitions, which had debilitated the economy. This is what Forbes sadly missed, he stated. S Gurumurthy, who also happens to be a government nominee on the board of directors of the Reserve Bank of India (RBI), says in 10 years, 1989-1999, when globalisation was opening the lucrative Western markets to the rest, India saw four parliamentary polls and as many governments with seven prime ministers. V P Singh (11 months), Chandrashekhar (4 months), Narasimha Rao (5 years), Atal Bihari Vajpayee (13 days), Deve Gowda (11 months), Inder Kumar Gujral (11 months), and Vajpayee again.
He questions: would the West look at India, the duration of whose governments were measured in months and days, instead of China, which was firmly under one man, Deng Xiaoping? Hoping to make stable China a democracy rather than attempt to make the Indian democracy stable, the US began “positive engagement” with China in 1993. In brief, he has blamed coalition government for any ills of economy and indirectly supported Narendra Modi’s brutal majority being oblivious of fact that absolute power tends to ride roughshod on masses and cater to the interest of rich and corporates so as to sustain power for longer periods.
Gurumurthy had forgotten to mention that Bangladesh, which has democracy, has overtaken India in GDP per capita. Bangladesh’s per capita GDP was merely half of India’s in 2007, just before the global financial crisis. It was roughly 70 percent of India’s in 2014 and this gap closed rapidly in the last few years.
However, the coalition government is more successful and more pro-poor in approach. Contrary to his arguments, India had performed marvellously in UPA-1 in coalition government when the left had some influences. India had witnessed the highest ever growth rate and crossed 9% thrice. Savings, investment rates had touched a record high. The National Rural Employment Guarantee Act, 2005, Right to Information Act, 2005, Right to forest Act 2007, National Food Security Act (NFSA), 2013 were enacted which have an enormous positive impact.
Addressing a Washington audience in September 27, 2017, former RBI governor Yaga Venugopal Reddy had rightly said, coalition governments in India have produced better economic growth rates in the last three decades (from 1990 to 2014) than a strong majority government. Mr. Reddy, who was the RBI Governor from 2003 to 2008, said “The remarkable thing was that despite an unstable political situation, they managed a political consensus for whatever needs to be taken to manage it successfully.”
Even on December 3, 2021, refuting India’s abysmal position in Global Hunger Index (GHI), in a written reply in the Rajya Sabha, Minister of State for Food and Consumer Affairs Sadhvi Niranjan Jyoti has cited the significance of the National Food Security Act (NFSA), 2013 of UPA-II, which provides for coverage of up to 75 percent of the rural population and up to 50 percent of the urban population, thus addressing the hunger alleviation of the bottom 67 percent of the population, which at Census 2011 is at a maximum of 81.35 crore persons.
But Gurumurthy, the votary of the swadeshi agenda and part of Swadeshi Jagaran Manch was opposed to the opening of the Indian economy and so-called reforms during the regime of Manmohan Singh, though he is supporting such policies of Modi government now.
During UPA, S Gurumurthy, long known for his advocacy of ‘swadeshi’ economics and known to provide intellectual advice for the Rashtriya Swayamsevak Sangh, vociferously opposed to FDI. He had said that he is not in favour of allowing foreign direct investment in any kind of retail, as it is a very important source of employment in India which produces entrepreneurs.
He was opposed to FDI in the financial sector and had described an increase of FDI beyond 26 percent in insurance against the national interest. Now, he supports FDI and privatisation policies of the Modi government.
But as opposed to privatisation during the Manmohan regime. He had stated in the past that the government policies will be to ensure that domestic production capacity is encouraged through the public sector and private sector. Opposed to the market economy, he was of the view that India also does not want it to be all equity flows because ownership is a sensitive matter, but debt-funded external deficits are not ideal because they are not stable, but fickle flows.
He makes a scathing attack as there was not much wrong with Sonia Gandhi influencing Manmohan’s government. But she was president of Congress and chairperson of UPA. and had the right to intervene. Sonia Gandhi had opposed a hike in the price of oil and advised that kerosene and LPG should not be touched (Outlook June 26, 2006). But oth Vajpayee and Narendra Modi’s governments were controlled by the Rashtriya Swayamsevak Sangh (RSS), Swadeshi Jagran Manch, Hindu Mahasabha, Viswa Hindu Parishad (VHP) which are extra-constitutional bodies. Religious thought influencing governance is a dangerous aspect of the present ruling class.
He has written that in 2014 when Narendra Modi won an absolute majority after 30 years, the paradigm shifted and stunned the world. Not just Modi, Indian democracy gained the world’s confidence to the extent that in 2019, US magazine Foreign Policy even said Indian democracy “is the silver lining, even golden lining of democracies” in the world.
But, the American magazine’s “TIME “has called Modi ‘India’s divider-in-chief’ in its international edition (May 20, 2019) Further, it was the US who had denied a visa when Narendra Modi was Chief Minister of Gujarat CM for his alleged involvement in Godhra massacre when India’s image was tarnished. India’s image is also being tarnished due to growing religious intolerance against minor communities.
The US State Department has said religious intolerance in India is growing under PM Modi’s right-wing government. The grim reality is that India has been dubbed as a “flawed democracy” and slipped to 53rd position in the 2020 Democracy Index’s global ranking, of the Economist Intelligence Unit from 27th (in 2014 when Narendra Modi came to power) as a result of democratic backsliding”, “crackdowns” on civil liberties under the current regime.
US-based non-profit “Freedom House” has also downgraded India from a free democracy to a “partially free democracy” and said civil liberties have been in decline since Narendra Modi came to power in 2014 due to a multiyear pattern in which the Hindu nationalist government and its allies have presided over rising violence and discriminatory policies affecting the Muslim population and pursued a crackdown on expressions of dissent by the media, academics, civil society groups, and protesters”.
In its report titled “Autocratization Turns Viral.” the Varieties of Democracy (V-Dem) Institute demoted India from being a democracy to an “electoral autocracy. India has been placed abysmally at 142nd position among 180 countries in the latest World Press Freedom Index 2021. India’s rank was 133 in 2016 which has steadily climbed down to 142 in 2020.
The RSF report says India is one of the world’s most dangerous countries for journalists trying to do their job properly. They are exposed to every kind of attack, including police violence against reporters, ambushes by political activists, and reprisals instigated by criminal groups or corrupt local officials.
S Gurumurthy, is believed to have played a key role in many of Narendra Modi’s economic policies, such as demonetization that caused a lot of trouble to people. Within the Sangh Parivar, it is believed that Gurumurthy was among those who advised the prime minister to set up a new body in place of the Planning Commission. This change was announced in August 2014. In January 2015, he provided inputs during the drafting of the mission statement of the NITI (National Institution for Transforming India) Aayog in January 2015.
Actually, India’s economy is being devastated during the Modi regime. In reality, the recent economic crisis is the government’s own making. A mix of cronyism, ineptness, and nonchalance had destroyed the livelihoods and lives of people well before the pandemic afflicting the Indian economy.
Actually, the economy has been shattered and ravaged by economic misadventures such as harsh demonetization, defective GST, and some extraneous decisions like dismantling the planning commission, indulging statue politics, triggering the Nehru vs Patel debate, giving priority to emotional issues, blaming predecessors, camouflaging failures by comparing with worse of the previous regime or that of other countries while ignoring economic issues like poverty, hunger, unemployment, inequality especially living standards of people.
The pandemic and subsequent stringent, poorly planned lockdown has just exacerbated the already beleaguered economy. The pandemic has also exposed our broken system and how the Indian economy is brittle, ramshackle and feeble, and susceptible to any internal as well as external shocks. The draconian demonetization and a poorly planned and hastily implemented Goods and Services Tax (GST) crippled the Indian economy that was already struggling with massive bad loans in the banking system.
The mismanagement and poor governance of the Indian economy during Modi regime are reflected corroborated by certain facts and indicators. Consumer spending in India declined for the first time in more than four decades in 2017-18. The last time it had declined was in 1972-73. Unemployment has touched 45 years high of 6.8 percent in 2017-18, household consumption tumbled to four-decade lows, total employment in India dwindled by 9 million between 2011-12 and 2017-18, a first in the country’s history, as per paper published by Azim Premji
Apart from the global financial crisis of 2007-09, India had also experienced the currency crisis in 2013 marked by a rapid fall in the value of the rupee caused by persistent inflation of the past few years and the high current account deficit (CAD) of about $85 billion (4.5 percent of GDP). But average growth achieved in UPA-1 was 8.86 percent and 7.39 percent in UPA-II. In Modi-1.0, the growth rate achieved is 7.16 percent and will further plummet in the Modi-2.0 regime.
S Gurumurthy, has praised the Modi government by stating that-backed by the absolute majority from the people, Modi set such long-term goals, planned on such scales as not imagined in India earlier. As the result, in the seven years from 2014, he succeeded in executing massive schemes.
In reality, every government float various schemes, so Modi government. But what is the important size of expenditure especially social expenditure and the rise in the tax-GDP ratio matter most? What is reprehensible is that policies adopted by the Modi government are regressive and anti-people. Health, education have become unaffordable which has detrimental impact on living standards of people. He has reduced the corporate taxes to benefit corporate behemoths while increasing indirect taxes like excise on petroleum products to the detriments of the masses.
India is behind many countries in many international indicators, though its rulers claim to be a superpower. It is known as a consuming rather than producing country. Many multinational companies come to India as labour is cheap and tax is low and rules can be easily subverted to enhance their profit. The only area where India had supremacy was in GDP growth and this is now crumbling.
The author is an Odisha-based eminent columnist/economist and social thinker. He can be reached through e-mail at [email protected]
DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English