As elections loom, one thing has been clear for some time: our government is great at rhetoric, hopeless at the delivery of public services and the implementation of its grand policy pronouncements.
Take its schemes for the poor. In FY 2021-22, 90 lakh beneficiaries of the government’s flagship Pradhan Mantri Ujjwala Yojana did not refill their cylinders. Whereas a typical household would need at least seven cylinders a year to meet all its cooking energy needs, data revealed through an RTI showed that of the 9.58 crore PM Ujjwala Yojana households, 1.8 crore bought no refills last year, while another 1.51 cr. bought just one refill. But the government does nothing to make the cylinders more affordable. Headline management, bottom line mismanagement!
In fact most of the government's self-congratulatory claims of success are actually let-downs:
The Government claims that FDI inflow during 2014-23 doubled to $596 billion compared to the previous 10 years. This is yet another blatantly misleading assertion. In fact, FDI inflow as a ratio of GDP peaked in 2007-08 at around 3.5% and never regained that level. Net FDI to GDP ratio has fallen dramatically. In FY 2022-2023, RBI estimates that foreign investment was about $42 billion, which is about the same as in 2008-2009, fifteen years ago. Over those fifteen years, foreign investment has come down from about 3.6% of GDP to just above 1% of GDP. (In contrast, foreign direct investment to Vietnam is close to 4.5% of its GDP.) Gross FDI into India in the first half (April-September) of this financial year stood at just $10.1 billion. The last time it was lower than this was in the first half of 2007-08! Worse, much of the FDI has flown into services and only modestly in manufacturing, and that too for acquiring existing factories and companies, not for greenfield investment.
No wonder that so many who can are voting with their feet. The External Affairs Minister told Parliament that over 16 lakh Indians gave up their citizenship since 2011, including 2,25,000 in 2022 alone. High-net-worth Indians are leaving the country because of this government’s tax terrorism – 7,500 millionaires left India in 2022, 6,500 last year. They have taken their resources to invest them abroad and not in our country, where private investment is seriously down under NDA.
While this external picture is damning, internally our states are in turmoil about the government’s mistreatment, their dwindling resources and the use of financial tools to centralise power and ride roughshod over federalism. In 2022-23, transfers to states were reduced substantially; now they are down to ₹3,59, 470 crores in the interim Budget 2024-25. As for the devolution of tax revenues, the states’ share has been stuck between 30-33% in the past 5 years, a far cry from the 15th Finance Commission’s recommendation of 41%, let alone the 42% share promised by the 14th Finance Commission. (This at a time when most states had demanded a clear 50% by way of tax devolution). Similarly, under UPA, the share of cesses and surcharges was 8.16 per cent of gross tax revenue. Under this government, that number has tripled to 28.08 per cent.
Over the last three budgets, India has seen a rising trend in the capital expenditure (capex) budget, with its budget ballooning by 33–37% each year in the hope of what the Finance Minister called “a large multiplier impact on growth and employment”. This government still believes in trickle-down economics, even if its grand projects have failed to make a positive impact on growth or employment. The alternative is trickle-up: if our economy produces the things that people wish to consume at affordable prices, the aam aadmi will not only live better but will become a full participant in the economy. Our objective should be to make ordinary people into consumers and stakeholders in India’s economic prosperity. But our government does not see them at all.
Lofty rhetoric cannot gloss over all of these inefficiencies and iniquities. The Finance Minister reserving an amount of ₹11,111,111cr for capital expenditure shows there is nothing particularly scientific about the calculations in her budget. A minister who chooses a lucky number is heading an economy that needs all the luck it can get!
The government’s penchant for rosy acronyms popped up again in this year’s budget speech, labelling GDP as “Governance, Development and Performance (GDP)”. Instead of increasing the actual GDP in a way that equitably enhances the capabilities of those who drive our economic growth and safeguards those who deserve the state’s protection, the government coins hollow acronyms that create headlines, but no tangible outcomes. In fact, the government’s record in the past ten years shows a different kind of GDP, where G stands for government intrusion and tax terrorism, D for Demographic betrayal, and P for Poverty prolonged.
This actual ‘GDP’ also jettisons the trinity of ‘demography, democracy and diversity’ that the government claims to be serving. The demographic dividend is on the cusp of becoming a demographic disaster with the unemployment crisis, K-shaped growth, and the ever-widening schism between the rich and poor. Democracy is suffering through this government’s arrogant contempt for institutions. A government that suspended 146 MPs rather than be held accountable for a security breach, that bulldozes laws as per its own whims and fancies with no regard for parliamentary procedure, that requires a no-confidence motion to be moved before its leaders speak on vital issues of national security like Manipur, should ideally refrain from claiming to be the messiah of democracy, let alone its “mother”. And when it comes to diversity, the record hasn’t been great, either, with increasing attacks on religious minorities, the ruthless dispensing of ‘bulldozer justice’, mob lynching, communal violence and worse. Combined with the disregard for states and their contributions through a skewed and centralising “co-operative federalism”, under which the states are meant to “co-operate” but the centre “operates” as it pleases, the government has failed gravely on all the counts where it pats its own back.
The government’s economic claims are a game of smoke-and-mirrors, with nearly no redressal of the crises plaguing our economy. It is high time that voters show their shallow rhetoric for what it is – all talk and no action.
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Rhetoric vs Reality
9
1
03.03.2024
As elections loom, one thing has been clear for some time: our government is great at rhetoric, hopeless at the delivery of public services and the implementation of its grand policy pronouncements.
Take its schemes for the poor. In FY 2021-22, 90 lakh beneficiaries of the government’s flagship Pradhan Mantri Ujjwala Yojana did not refill their cylinders. Whereas a typical household would need at least seven cylinders a year to meet all its cooking energy needs, data revealed through an RTI showed that of the 9.58 crore PM Ujjwala Yojana households, 1.8 crore bought no refills last year, while another 1.51 cr. bought just one refill. But the government does nothing to make the cylinders more affordable. Headline management, bottom line mismanagement!
In fact most of the government's self-congratulatory claims of success are actually let-downs:
The Government claims that FDI inflow during 2014-23 doubled to $596 billion compared to the previous 10 years. This is yet another blatantly misleading assertion. In fact, FDI inflow as a ratio of GDP peaked in 2007-08 at around 3.5% and never regained that level. Net FDI to GDP ratio has fallen dramatically. In FY 2022-2023, RBI estimates that foreign investment was about $42 billion, which is about the same as in 2008-2009, fifteen years ago. Over those fifteen years, foreign investment has come down from about 3.6% of GDP to just above 1% of GDP. (In contrast, foreign direct investment to Vietnam is close to 4.5% of its GDP.) Gross FDI into India in the first half (April-September) of this financial year stood at just $10.1 billion. The last time it was lower than this was in the first half of 2007-08! Worse, much of the FDI has flown into services and only modestly........
© Mathrubhumi English
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