Even going by the 'Godi media' reports, the situation in rural areas, particularly in U.P. , Bihar, Rajasthan and Madhya Pradesh is so hopeless that most of the hospitals remain closed for want of doctors and para-medical staff for most of the time. Elsewhere , people have to stand in long ques for hours to get them vaccinated, yet there is a shortage of corona vaccination. This scenario shows the real picture of today's India.
It is to be noted that Modi is the only Indian PM who has enjoyed the comfort of a single-party majority in the Indian Parliament since the beginning of economic reforms in 1991. The political instability due to lack of clear majority was often cited as the main reason for the country failing to achieve its economic power potential.
By this logical, Modi government was expected to achieve spectacular growth. The first five-year term of Modi govt was seen by the people as "ache din" with pseudo-nationalism riding high on people's mind. As such, in 2019 Lok Sabha elections, Prime Minister and his party was given bigger mandate than in 2014. People even ignored the tragic deaths of more than 100 people due to demonetisation.
However, the GDP growth rate has been a point of growing weakness for the last five of the past seven years, contrary to the claim of Modi government.As per the RBI reports, Indian economy GDP growt saw upward growth from June 2013 toSeptember 2019. But thereafter, from December 2016 (after demonetisation) to June 2020, Indian economy went downwards and since than, its recover has gone from V to U shape.
A V-shaped recovery means that the economy bounces back quickly to its baseline before the crisis, with no hiccups along the way. Growth continues at the same rate as before. This is one of the most optimistic recovery patterns because it implies that the downturn did not cause any lasting damage to the economy.
U-shaped recovery represents the economic damage lasts for a longer period of time before eventually reaching the baseline level of growth again. The economy bounces back, but the damage at the bottom lingers for a while.
From 8.1% in 2014 the GDP had fallen to 4.2% in 2019-20 . In the first quarter of the 2020-21, the GDP was down to minus 24.1% and in the second quarter it is now minus 7.5%. It is estimated that in 2020-21 the GDP will be close to minus 8%,” estimates opposition Congress party.
Job creation or unemployment is the biggest concern in India. For a country where 1.2 crore people enter workforce every year, creating employment is a big challenge. Prime Minister Modi had promised to create 2 crore jobs every year. However, on an average only five lakh jobs could be created annually during last seven years, according to labour bureau data. As against the 2%-3% unemployment rate, India routinely witnessed unemployment rates close to 6%-7% in the years leading up to Covid-19. The pandemic, of course, made matters worse.
Now the job situation is so hopeless that early 3 in 5 or 62 per cent professionals in the country are willing to pivot their careers to navigate these testing times, according to LinkedIn's Workforce Confidence Index findings. The data shows that professionals from recreation and travel, retail, and corporate services look for jobs outside their current industry.
Mehangayi or high prices are at its peak, Petrol is selling at more than Rs 100 per litre while mustard oil sells Rs.200 per litre. The LPG is at Rs.809 per cylinder. The prices pulses are also skyrocketing.
The pandemic has weakened the “fundamentals of the economy . Not only gross domestic product, unemployment rate, inflation rate, but savings and investment rates in the economy, the domestic currency’s relative value against the US dollar, the balance of payment, the level of poverty and inequality etc. are all down. The fiscal deficit of the government, which is considered proxy for the health of government finances, is at its peak level.
Consumer demand is the biggest engine of GDP growth in India as it accounts for roughly 55% of all demand. It was already faltering right through 2019 (before Covid hit). Its collapse implies that existing capacities are not being utilized fully. There is a real danger that business profitability will struggle in the years to come.
The 7-year tenure of the Modi govt has seen many upheavals including demonetisation, protest after protest including more than six-month farmers' protest and will be written down in history a period of deadly pandemic killing more than 3,26 lakh with 2.79 crore cases.
(Chander Sharma)
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