Is India moving towards a dark and uncertain future?

RN Malik
Raghuram Rajan is indisputably a world renowned economist. His predictions on state of economy never go wrong. Therefore, his statement that “India is moving towards a dark and uncertain future “ has to be taken seriously. The statement seems to be loaded with truth in view of faltering Indian economy coupled with lack of visionary approach in the Govt. GDP growth in the first quarter was 5 percent. SBI predicts a growth of 4.2 percent in the second quarter and signs of recovery are yet not visible. Besides this, the problems of rising unemployment, recessionary trends in trade, commerce and industry, stress and strains of banking sector(the backbone of all economic activities), dwindling exports and extremelyslow progress of infrastructure development are becoming intractable day by day In fact the country is in the midst of dangerously protracted slow down and it is not a onetime aberration. To cap it all, both Central and State govt. are least perturbed and concerned about these issues. They are busy in over emphasizing inane, unrealistic, inconsequential and uncalled for issues like abrogation of Article 370 or Indo-Pak hostilities or electioneering or 5-trillion dollar economy or doubling farmer’s income before 2022. In fact such issues are being used as lifelines to divert public attention from real burning issues. Look at how the PM and the government were conspicuous by their silence when poor people in five states were helplessly bearing the drudgery caused by floods. The same brazen silence is visible even now when people are gasping for breath in the poisonous air in urban areas of northern India. AQI on 16th November in Delhi was 800 as admitted in the Supreme Court (AQI beyond 500 is deemed as hazardous and calls for disastrous management measures). The insensitivity of Central and state governments in such situation is palpable and more annoying than the burning issues themselves. Hardly ten MPs were present when environmental issues were being discussed in Lok Sabha on 18th Nov, 2019.
Strangely the new Chief Minister of Andhra Pradesh has ordered the stoppage of 75 percent construction activities at the new capital complex at Amravati without bothering for the legal and unemployment consequences. He also spent Rs. 15 crore on the renovation of his official residence. In fact the Central govt. has absolutely no control over the arbitrary and profligate use of money by the State Chief Ministers. All political parties are brazenly busy in trading vote bank politics to the total exclusion of public issues and grievances look at the free drama going on in Maharashtra for the last three weeks. In fact the entire political class is the biggest road block in the progress in the country.
India is a very big underdeveloped country and hence needs to be governed very seriously. China was more underdeveloped than India till1978. Then Deng Xioping took the command and the rest is history. Now China is too far ahead of India. Great misfortune of India is that after Nehru she never had a Prime Minister who had a raging fire in the belly to beat China in the economic race and prepare a road map of economic development and place it on his table. The present Prime Minister even scrapped the Planning Commission and banished the planned development model of Five-Year Plans. Japanese always spend more time in planning than execution of the projects. Accordingly, dissolution of Planning Commission was the most fallacious (rather sinful) step of Shri. Narendra Modi so far (demonetization was the second). Now nobody knows what the substitute NITI AYOG is doing ( Its Vice-Chairman had written a book in the praise of the Prime Minister). Consequently, the government has been groping in the dark for the last 5 years and taking the country towards a dark and uncertain future. On recent sops of Finance Ministry, Prof. M. Ghatak of London School of Economics says,”. It is like re-arranging deck-chairs on the Titanic.
There are six keys that open the doors of prosperity for an underdeveloped country. These are strict population control, total sanitation program, massive infrastructure development, administrative and economic reforms, boosting exports or curbing imports and finally bringing FDI in torrents. This is exactly what China did after 1978. Both Central and State governments are virtually doing nothing to try any of these keys. They are rather busy in distributing freebies like free bus ride for ladies. Ruchir Sharma (another renowned economist) highlights in his book”Why nations fail”that countries relying on distributing freebies never progress.
The most painful part-of the present scenario is that both central and state governments are performing the role of silent spectators. We are adding one Australia every year. India will be beating China in 2025 to become the most populous country of the world. And still the governments have no program to tackle this issue.
In fact the explosion of the population bomb is the greatest danger to be economic an social stability of India. Swachh Bharat Abhyan is a commendable attempt of the GOI but this effort constitutes only 15% success of the Total Sanitation Program. There are hardly 10 cities in India where 100% sewerage and solid waste management with recycling facilities may be existing. Likewise, the government has never undertaken a program of administrative and far reaching economic reforms. For example, take the case of U. P. Its population is 20 crore. Only three countries in the world have larger population than UP.
Still no government has ever bothered to split this state into three. Same is the fate of Maharashtra. Demonetization of higher currency notes in Nov, 2016 was carried out even without the knowledge of the then Finance Minister and this single step sowed the seeds of impending economic disaster. GST bill (a great economic reform in itself) was designed in a half-baked manner. It’s implementation again is tardy. As a result tax collections are always below target. Sadar Bazar of Delhi will show you the prevalence of old games of tax evasion (business in number2) is in full flow.
According to Jeffrey Sachhs, (the renowned authority on poverty eradication) tells that infrastructure development is the real engine of growth to eradicate poverty. Aggressive infrastructure development solves most of economic problems of the country like recession, unemployment and poverty. It is the infrastructure development that lifts the country to the next club of developed nations. President Roosvelt did exactly that to extricate U.S. out of the great depression in 1930s. There are eight major areas of essential infrastructure development. These are -:
1.    Water resources and hydro power development and massive extension of irrigation facilities in Central and Southern India.
2.     Expansion and electrification of Railway network
3.    National highways and expressways
4.    Exploration of hydrocarbons.
5.    Setting up modern SEZs (or technology parks) and modern ports along coastal areas to attract FDI.
6.    Exploitation of solar energy on a massive scale.
7.    Horticulture and dairy development in seven N-E states.
8.    Building sub-capitals in all the states with modern townships.
Not a single dam has been built across any river to store rainfall run-off and use it for irrigation during the last 5 years. Almost the entire run-off of river Yamuna is flowing wastefully to the sea during the rainy season which otherwise could have been used for irrigation of parched lands of Haryana.National Highway Authority made good progress during last five years. But now it is limping financially. 55% railways tracks are still grossly underutilized. The progress on other fronts is equally tardy. Only three examples are sufficient to prove this point. Firstly, 2000 MW hydro power project of NHPC across Subansiri river in Assam - Arunachal border is held up since 2011 because of writ petitions. Secondly the progress of two Freight Corridor projects (initiated by UPA government) is very slow. Thirdly, ONGC has not made even a single significant discovery of hydro-carbons during the last 25 years. There for all the infra-projects need to be executed on a real war footing to save the country from economic disaster.
Banking sector is the prime mover of the engine of growth. Now the entire banking sector is plagued with NPAs and scams. PMCBank has already failed. Many banks were saved from incipient failure by merging them with larger banks. Another bank failure would relive the days of 1929 Wall Street crash.
There are other agonizing issues plaguing the country which again receive least attention of the government. World Bank describes two types of poverty in India i.e. financial poverty and poor service delivery of existing infrastructure. Appalling conditions in government hospitals and falling standards of education particularly in engineering and medical streams amply prove this point. The farmers of Haryana put up only 4 main demands before the government-:
1.    Save us from the loot of private hospitals.
2.    Save us from the loot of private schools.
3.    Give us adequate flow of irrigation water.
4.    12-hour regular power supply and use of solar pumps for irrigation.
All these four essential demands have remained unattended and unfulfilled till now.
In-spite of the all-round depressing scenario the PM is still busy in selling unrealistic dreams. All economists unanimously and loudly say that 5-trillion dollar economy cannot be achieved before 2024 till the GDP growth maintains a steady rate of 10% per year against 5% now.
Likewise, the slogan of doubling farmer’s income by 2022 is equally ephemeral. Now it is widely accepted that political behavior of the Prime Minister is almost identical to that of Mrs. Indira Gandhi during pre-emergency years. Demonetization was nothing short of a financial emergency.
The crux of the whole issue is that we do not see a silver lining in otherwise gathering dark clouds as the country is faced with a long drawn out famine of statesmen or good leaders. The entire political class is engaged in vote bank politics and we do not observe/find any savior (like Nehru, Dang Xioping, Lee QuanYiew) who can sail the boat out of the troubled waters. Churchill had once said,”  A politician thinks of only next election whereas a statesman thinks of the next generation”. This statement is totally applicable in India today.
Alas! the prophecy of Raghuram Rajan may prove  right and  future of all us is in real danger. We should read the writings on the wall and do something to postpone and avoid the cataclysmic scenario of the future.
The writer is an Engineer in Chief (retd) based in Gurgaon and can be reached at 9911078502