The day Prime Minister Narendra Modi announced demonetisation, he had promised that the radical move would ensure the eradication of black money, end terrorism and counterfeit currency. The country was thrown into utter chaos following demonetisation announcement that caused nearly 200 deaths, never ending queues outside ATMs and banks, confusion within the RBI and the banks with both behaving like headless chickens on how to handle the shortage of cash.
However, the country cooperated with the government and the PM in the hope that demonetisation may be a good step for India’s overall economy and the pain will be well worth it. The ensuing months showed just how hollow the promises turned out to be.
The country today still doesn’t know how much black money was unearthed, how Jammu and Kashmir and states affected by Maoist insurgency continue to see horrors of terrorism and how much the issue of the counterfeit currency has been addressed.
What is known is that the demon of demonetisation crippled the informal economy and the manufacturing hubs across the country. The fall in manufacturing is also shown in the GDP data.
Dr Manmohan Singh in his speech in Rajya Sabha had said that the way this scheme was implemented made it not just a monumental management failure but also a case of organised loot and legalised plunder.
Besides Dr Singh, many other economists too questioned the need for taking a step as drastic as demonetisation with almost all predicting considerable decline in growth. They weren’t far from the truth as the fourth quarter GDP figures now show.
The government kept mocking all those who questioned demonetisation move and predicted economic disaster. The electoral victory achieved through social engineering in Uttar Pradesh was touted as the endorsement for note ban from the people.
The numbers however don’t lie.
Though most economists have questioned the new methodology to calculate the GDP that transformed India’s economy into the best in the world in terms of growth. The new methodology gave the government the bragging rights as the fastest growing economy. India has, unfortunately, lost that bragging right too as China has now taken the lead with their GDP growing at 6.9 percent in the same quarter.
This disappointing fourth quarter GDP at 6.1% comes despite changing the the IIP and WPI to 2011-12 base, which was largely believed would give a boost to GDP data for fourth quarter. What is equally disappointing is that the GVA growth that in the Jan-Mar 2016 period was at 8.7% fell to 5.6% in Jan-Mar 2017 period.
The GDP data, should work as a reminder to the people of the country that Narendra Modi government has failed to deliver its 2014 campaign promises. The government’s vision-less policies have resulted in the country’s inability to revive investment, boost bank credit growth or create jobs.
The GDP data aside, the celebrations and false chest-thumping around Modi completing three years in office also remind me of the claims on new jobs creation the prime minister made while campaigning during the Lok Sabha elections in 2013. While addressing a rally in Agra, Modi had famously claimed that his party will create 1 crore new jobs after it comes to power.
Three years into the government, there’s no trace of new jobs with unemployment rate going in upward direction.
The government’s own data, as reported by IANS, says that the unemployment rate in 2015-16 was 5% of the labour force, up from 4.9% in 2013-14, when the Congress-led UPA governed the country.
India’s private sector too paints an incredibly gloomy picture with the IBM joining the list of big IT firms now forced to lay off thousands of staff. IBM is expected to let go at least 5,000 staff after Infosys, Wipro and Cognizant made similar moves owing to downbeat economic scenario.
The district-wise celebration planned at completion of their three years at the Centre is yet another publicity drive at the expense of PSUs of the country. The numbers that show unemployment growing and GDP slowing is a damning indictment of the government’s failed economics. I wonder what exactly they are celebrating and at who’s expense!
(Priyanka Chaturvedi is a national spokesperson of Indian National Congress. The views expressed here are the author’s own and Janta Ka Report does not endorse them)