India voted. As we emerge from that closed corridor of time, there is room to see more clearly. Some grim truths persist. India still has a job crisis, families are still struggling to make ends meet, and hate, as we have seen, does not make for a good economy.
Three specific lessons from the last 10 years are worth revisiting. The first is demonetisation. In 2016, the Government of India announced that all Rs 500 and Rs 1,000 currency notes were invalid. The decision crippled India’s cash-based economy for months. But it also left other fatal wounds. The country is already facing a jobs drought and in 2017-18, the unemployment rate of 6.1 percent was the highest we have seen in 45 years.
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Other bombings were underway. Manufacturing, a major component of jobs, was suffocating. Prime Minister Narendra Modi’s “Make in India” campaign was launched in 2014 with much fanfare. The goal? Increasing the share of manufacturing sector in the country’s economy from 16 percent to 25 percent by 2022. That year has passed, and the target has been reset to 2025. Since then, millions have joined the job search process.
For months and years, the BJP-led central government has consistently mocked data from the Center for Monitoring the Indian Economy, the International Labor Organization (ILO) and others, which pointed to fewer and fewer jobs, which was felt badly by India’s youth. The ILO’s most recent report noted: „India’s youth unemployment rate is now one of the highest in the world.” These are young people with secondary or higher education who are frustrated about where their opportunities lie. The „Pakora economy” doesn’t seem to have worked as well, as reports on the ground speak of more pressure around jobs and employment.
Time to fix the works rotten
But the Indian economy had a safety lever, the MSME or medium and small scale industry. Sharp, efficient and highly cash-dependent, the MSME sector fuels India’s economy and ensures things move both in terms of jobs and production.
Demonetisation has robbed the MSME sector of its quick turnaround. The hasty introduction of GST, for all its benefits, later bled any hope of recovery and thereby job creation. As private sector jobs dried up, unemployment continued to rise. Government jobs at the state or central level cannot accommodate self-exploding experiments like the number of job-seeking citizens and the Agniveer scheme.less. Not surprisingly, many voters spoke about their concerns about unemployment. It would be worth the present government’s time to take a hard and honest look at the reality of this unemployment crisis. It’s time to fix the jobs rotten.
A migrant arrives at the Habibganj railway station in Bhopal amid a pandemic lockdown in May 2020. Photo credit: FARUQUI AM
The second lesson came in 2020 when India, like the rest of the world, was hit by Covid. How did the government decide to respond? A complete denial of what the death toll was like and once again, the ill-conceived decision to lock down the country. By doing so, the majority of India’s population is left to fend for itself in favor of the elite and the entitled. Migrant workers ran across the length and breadth of the country like boundless human rivers, trying to reach their villages, where there would be some degree of safety, shelter and protection. Not surprisingly, the coming years will see the number of people working in agriculture increase from 42.5 percent in 2018-19 to 45.5 percent in 2021-22. Left with no other option, Indians turned to agriculture.
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And while opportunities for better jobs dwindled, housing costs continued to rise. India’s food inflation is rising in vegetables, pulses, milk and other staples. It has become more expensive and difficult to feed a family. Although it is a free food grain scheme for low-income families, it is an obligation of the Indian government—not a subsidy.
’Should everyone be poor?’
Finally, a sentence may have long remained in India’s political consciousness. Asked about India’s deep and growing income inequality, the Prime Minister responded with a sneer: “Should everyone be poor? Everyone must be poor, then there will be no difference. It was like this in the country earlier.” And the answer to that rhetorical question is recorded in India’s votes. Asking where is not for everyone to be poor, but for everyone to have a say. And everyone should have opportunities: to work, to study, to practice their own religion and to have a voice.
For the Indian stock market, the crown jewel and pride of this government, both pride and profitability have collapsed. In the past few weeks, both the Prime Minister and the Union Home Minister have predicted a big stock market rally on June 4, when the election results will be announced. Home Minister’s own words: “Buy before June 4, it (the market) will shoot”. On the day, Indian stocks posted their worst session in more than four years, while the Indian rupee fell 0.5 percent against the dollar.
As the day’s bloodshed begins to settle, as foreign and domestic buyers return to survey the wreckage, institutions like the Election Commission and Sebi must ask themselves who is to blame here. Likewise, ordinary citizens must ask whose interests they believe these institutions are upholding. No business channel or pink paper has raised questions about the deep divisions in the Indian economy and this blatant shilling of the market by political leaders.
Some good economic results
Two things stand in favor of the next government. One is a dividend of Rs 2.11 trillion from RBI. Second, a history lesson that shows us how some of the best economic decisions came from within coalition governments: B.V. Abolition of license permit raj from Narasimha Rao government, complete overhaul of taxation in HD Deve Gowda government. Loss-making PSUs under BJP’s own Atal Bihari Vajpayee-led government.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), introduced by the United Progressive Alliance (UPA) under Manmohan Singh, promised to provide minimum employment to the rural poor.
Religious hatred stirs emotions, but it won’t get you jobs. Attacking minorities may boost your support, but it won’t pay the bills. Growing business enterprises may win you influential friends, but it won’t win you votes. The last voter in line has spoken. It’s time to start listening.
Mithali Mukherjee is Director of Journalism Programs at the Reuters Institute for the Study of Journalism, University of Oxford. He is a political economy journalist with over two decades of experience in television, print and digital journalism. Mithali has co-founded two start-ups focusing on civil society and financial literacy and gender and climate change.