‘SabkaSaath-SabkaVikas’ Promise of BJP 2.0 Still Elusive

Created: Mar 18, 2019, 10:26 IST | Updated: Mar 18, 2019, 13:48 IST

The announcement of seven phase Lok Sabha Elections by the Election Commission of India (ECI) formally brings down political curtains on the BJP 2.0 government, which came to power in 2014 with an electoral promise of ‘SabkaSaath-SabkaVikas' (Collective Efforts Inclusive Growth). The model code of conduct forbids the central and state governments for launching new programmes, projects, and offer sops, as it could unduly influence the gullibility of Indian voters and compromise the free and fair dimension of the national elections. The ECI, which in recent years committed several faux pas, once again found itself at the receiving end as the opposition parties, which questioned and critiqued the raison d'etre of holding a five phase election in Odisha (21 seats) and a seven phase election in West Bengal (42 seats). However, the decision of the ECI to have a Voter-Verifiable Paper Audit Trail (VVPAT) machines at all the polling booths in the country puts a lid on the controversy of EVM tampering and the national elections 2019 promises to be a benchmark in the largest democratic exercise in the world.

The BJP led by Narendra Modi not only provided a stable and proactive government for five years, but also created an unparalleled political hegemony, as the saffron party as its peak ruled in 22 out of the 29 states on its own or with alliance partners. The BJP lost the state elections in Madhya Pradesh, Rajasthan and Chhattisgarh in 2018, but its election winning record continues to be exemplary, and the recent success of the air strikes in wiping out the terrorist bases in Pakistan has boosted its falling political stock. The air strikes not only raised the public image of Modi and nationalistic fervour in the country, but also sublimated the on-going controversy on Rafale aircraft deal, gratuitously churned up by the opposition for electoral gains.

Populist Policy Engagements

The Modi government on taking centrestage in 2014 initiated inclusive public polices, which included revamping public hygiene and sanitation across the country-with 10 crore new toilets being built and the ‘Swacchh Bharat Abiyan’ in swing--cleaning up railway stations and other public places; the ‘UjwalaYojana’ providing 6 crore women with LPG connection and empowering Muslim women with the scrapping of the medieval and archaic instant triple Talaq through The Muslim Women (Protection of Rights on Marriage) Bill.The other populist measures included health insurance of Rs. 5 lakh to 50 crore people through ‘Ayushman Bharat’; reservation on the basis of economic criterion to the general category of the population and increasing the income-tax exemption to Rs. 5 lakh for the salaried citizens.The efficacy and the sustainability of the policies may be contestable, but the outreach of electricity to 18000 villages and to 2.5 crore people who had been languishing in darkness since independence of India is surely a beacon of positive change and will yield electoral dividends for the saffron party.

The implementation of Goods and Services Tax (GST) and the subsequent rationalisation of the tax-structure and the exemption from income tax for businesses with a turnover up to 60 lakh rupees under the ‘Ease of doing business’ for traders and small entrepreneurs is a progressive and reformist legislation. The GST to some extent, negated the short-term deleterious consequences of the ill-conceived and haphazardly implemented Demonetisation drive in the country. Yet on the flip side, and happily so, remonetisation of the Indian economy, apart from the unearthing of black money, if only temporarily, had significantly aided Digitalisation, with a quantum leap in the number of people making online transactions and a spate of new bank accounts, thereby bringing in more people in the fold of the formal banking system.

The defense sector has been revamped and modernised and the external image of India has received an upgrade, thanks to the untiring effort of Prime Minister Modi. If the uniform civil code and the scrapping of article 370, which unduly confers special status to Kashmir, and certain other election promises, have not been fulfilled then it is not the party in power, which is lacking in political will but the often unreasonable obstructions thrown up by the opposition.If these sound like a leaf from Golden Age--what then has alienated a large section of the Indian citizens? To analyse this we have to delve into the niceties of economic data for the devil lies in the details!

Economic Governance

The true mirror of society, as economists contend, is the status of its Human Capital development.Sadly, the outlay on education is now just 2.7% of GDP (compared to 3.1% six years ago) and health less than 1.5% of GDP, so far. This can only suggest no perceptible improvement in the productivity of the workforce, its employability and the consequent quality of life. The fundamental shortage of health care facilities and providers casts a shadow on the viability of the much vaunted Ayushman Bharat. The functional health and quality of education in the country languishes as ever through the tenure of this government.

Coming to agriculture the spree of starvation deaths and agrarian distress continue to hog the highlights for much of this tenure. The NDA government has raised minimum support price (MSP) to 1.5 times the production cost, widened insurance cover in PM Fasal Bima Yojana,claims to have invested much in farm mechanisation, irrigation and modernisation, and has increased import duty on several commodities to tackle the problem. This, plus the slate of loan waivers seeks to alleviate the agrarian crisis. Yet, evidence shows that farmers at large are unhappy and short-run sops are not going to work in the union government’s favour, which is vindicated by the electoral loss of the BJP in the elections in the Hindi heartland states. The average annual growth rate in agriculture during the NDA years is 2.5% as compared to 3.6% in UPA years. Most of the schemes benefit the large and middle-income farmers without perceptible effect on the poor and marginal farmer, who have to fall back on NREGA and small-scale employment to supplement their income.

But as regards NREGA, budgetary allocation fell in real terms in 2018-19. Additionally, leakages, non-payment of minimum wages and non-productive infrastructural development, apart from the structural bottlenecks inherent in over-centralisation of the schemes, clearly stands to undermine the relative virtues it otherwise possesses. This, coupled with scams in the PDS--which provides subsidised food-grains to the poor, is an area, which the NDA Government is seeking to redress.

Further job creation hasn’t grown apace with industrial growth. Employment elasticity – a measure of the percentage change in employment with a 1 percentage point change in economic growth, is at its lowest, at about 0.17%. Partly, this is because India’s growth, dominated by the services sector and not labour-intensive manufacturing, has had a bias for skilled workers. It appears that the state of jobless growth is continuing despite the governments’ assertion to the contrary. It remains to be seen, now that the economy is coming to grips after demonetisation, which certainly provided a jolt to informal employment sectors and temporarily to the formal economy.

During the past four years, the Index of Industrial Production has declined steadily from 9 % in October 2015 to 0.5 % in November 2017--reflecting, to a degree, the impact of demonetisation and GST. Since then it has grown to about 5%. Industrial growth was at 7.1 percent under NDA, marginally higher than the 6.4% logged during UPA II.

The services sector logged an average growth of 8.8 percent during the four years of the NDA government, as against 8.3 percent under UPA II. There has been a major spurt in FDI inflows but sadly, India’s exports-to-gross-domestic-product (GDP) ratio at 11.44% in 2017 was the lowest since 2005 and trade deficit increased from $137 billion in 2014-15 to $162 billion in 2017-18, the highest since 2012-13. The GST and flaws in the incentive system seem to have had an adverse impact on small and medium enterprises specialising in export commodities.Inflation is under control and the government has shown commendable fiscal conservatism with the fiscal deficit under check. The unified goods and services tax (GST) is yet to show its full effect but data shows better tax-compliance which has resulted in higher revenues in 2018.

Finally, inequality of income and wealth seems to have grown and good growth figures have not translated to redistributive justice. The parlous state of affairs in NREGA, in the PDS, and low spending in health and education along with the low employment-absorbing capacity of the economy has tended to undermine whatever gains India has made during the 5 years of BJP-led NDA government. To conclude, the farming community and the employable youth seems to be the outlier in the ‘SabkaSaath-SabkaVikas' progress achieved during the BJP 2.0 regime. The agrarian distress and high unemployment in India are the most visible red lines in the otherwise satisfactory report card of the incumbent NDA II government.

However, Modi is expected to leverage the breakdown in patronage based party system prevailing in the country by connecting directly with the citizens through mass media and mega election rallies, with minimum use of institutionalized party structure in his populist election campaign for seeking yet another term in the 2019 elections.