CLAIMS

India is the fastest growing economy in the World.  It will become the fourth largest or the third largest in five years or ten years and so on…

GDP will reach 5 trillion or 10 trillion in this year or that…

‘Achche din’, ‘Amrit kaal’, ‘Shresthth Bharat’ etc. have come into existence and  the like.

TRUTH

The share market and the corporate world – both Indian and global – love this kind of talk because it creates golden visions of more super profits for them.

Many common people get taken in by this propaganda and start believing that India’s economy is roaring along and ‘Achche din’ (Good Times) are around the corner. This is a complete illusion, fostered by Modi’s  spin-masters.

High GDP growth and a big economy in itself do not mean that the country’s common people are benefitting. If realistic inflation rates are taken into account, India’s GDP growth in 2023-24 would drop from 7.3 percent to a level below 3 per cent. The real picture may be worse because we still do not have updated indicators to capture the state of the unorganized sector in the post-demonetization period in which it has suffered disproportionately.

India is a prime example of the fact that big GDP or high growth does not mean prosperous people. If you divide India’s GDP by its population – that is, calculate GDP per person – then the reality is immediately exposed.

India ranks 147^th among 213 countries/territories in terms of GDP per capita, in the company of poorest countries.  The truth is that India is home to one of world’s largest poor population.

India’s ranking in the Global Hunger Index slipped from 97 out of 118 countries in 2016 to 111 out of 125 in 2023.

As a proof of people’s prosperity the government showcases the increased bank accounts. 52 crore Jan Dhan accounts have been claimed to have been created – a number which is equal to half the adult Indian population. Deposits in these accounts have a measly share – less than 2.5 percent of the total deposits of banks held by individuals – and only 4.5 percent of all savings deposits held by individuals. The average balance in Jan Dhan accounts is just Rs 4227 as on 20.02.2024. Over 4.3 crore accounts have zero balance.

At the start of Modi rule, the infamous Rangarajan Committee said that anybody earning less than Rs 47 per day in urban areas or Rs 32 per day in rural areas is below the poverty line. It is this ridiculous definition that has influenced the recent announcement by the Niti Ayog that only 5 per cent of the people are poor.

How do they measure poverty?  Not by considering income or earning.  They use 12 indicators that include not having a toilet, drinking water, good cooking fuel, a bank account, or a phone.  The number of toilets built has been calculated by relying on Government data which is very unreliable. For example, many toilets have been found non-existent and many more are unusable because there is no water supply or sewer line available.

Mobile phones are now a necessity not an indicator of prosperity.  Bank accounts are mandatory to receive MGNREGS wages and Government benefits etc. and, because of extreme poverty, many have fallen into disuse. On paper, however, possession of these is used to demonstrate ‘reduction’ of poverty.  According to this definition a landless labourer earning Rs 240 per day for seasonal work will no longer be considered poor!

The Niti Aayog report itself is forced to admit that 32 per cent of people suffered nutritional deprivation, 44 per cent families didn’t use good cooking fuel, 30 per cent didn’t have proper sanitation and 41 per cent didn’t have adequate housing.

Consumption spending data for 2022-23 released recently shows that, in rural areas, the average monthly spending of a four-member family is Rs 8032, at 2011-12 prices or Rs 15,092 at current prices. Similarly, in urban areas, such a family spends on an average Rs 10,520 at 2011-12 prices or Rs.25,836 at current prices.

A government survey in 2018-19 revealed that average income of agricultural households was just Rs 10,218 per month i.e. less than their expenditure so it is probable that many of them are heavily in debt. The Periodic Labour Force Survey for 2022-23 said that while regular employees earned about Rs 20,000 per month, casual labourers got just Rs 12,000 per month and self employed earned Rs 13,000 per month, on an average. These incomes are far below the average consumption mentioned above.

The poor are further robbed by the government’s unwillingness to control price rise, despite promising to do so. According to latest government data on consumer price index, between June 2014 and January 2024, prices of cereals and products increased by 54 per cent, meat and fish by 73 per cent, eggs by 77 per cent, milk and products by 53 per cent, oils and fats by 48 per cent, vegetables by 48 per cent, pulses and products by 82 per cent, and spices by 112 per cent.

Besides these essential food items, healthcare costs have increased by 71 per cent and education is costlier by nearly 60 per cent. Overall, the general price index has increased by nearly 60 per cent in this period.

The government’s direct role in deliberately increasing prices is seen in the case of petrol and diesel. Although international prices of crude oil (Indian basket) has fallen by 18 per cent between May 2014 and February 2024, domestic price of petrol has increased 35 per cent and diesel by 62 per cent. This is because the Modi government has imposed heavy taxes and duties thus keeping these prices high. It is a way of indirect taxation of the people.

It is estimated that total taxes recovered from petroleum products between 2014-15 and first half of 2023-24 is a mind boggling Rs 28.33 lakh crore of which over 82 per cent was on account of excise duty imposed by the central government. Cooking gas prices have reached levels where women of poor and lower middle class homes cannot get cylinders re-filled.  In February, the price per cylinder was increased by 25/-. The recent reduction in price of Rs. 100/- was, of course, an electoral sop.

Indirect taxes, which the poor pay every time they buy something, contribute to two thirds of government revenues in India while the top 10 percent of the rich – with more than half the national income – contribute only a third as direct taxes.

Among the 9.65 lakh plus companies who filed returns in 2021-22, while 5.81 lakhs companies reported losses or zero profits, just 520 companies accounted for over 56.4 per cent of the gross income of all companies and another 1757 accounted for an additional 18.7 per cent. Corporate profits are also highly concentrated!

In fact, the people of India are being mercilessly squeezed by raging inflation, persistent joblessness and low incomes – even as the corporate world, big traders and landlords are thriving, reaping super profits in an Amrit Kaal meant just for them.

In 2022, the richest 10 per cent of India’s population took away 57 per cent of the national income while the poorest 50 per cent could get only about 13 per cent, according to the World Inequality Database.

As far as ownership of wealth is concerned, the richest 10 per cent own nearly 67 per cent of the country’s private wealth while the middle 40 per cent accounts for only 29.5 per cent and the poorest 50 per cent less than 6 per cent. The top 10 per cent earns more than 20 times the bottom 50 per cent.

The high growth of the economy is not helping the poor or increasing employment but it is actually ensuring immense and growing inequality because its benefits are being cornered by a small section of the elite.

Because of the low incomes revealed by the consumer expenditure results, persistent unemployment and price rise, the economy is suffering from lack of demand despite the fact that a very large number of people are in need of better food and other basic necessities of life. Due to lack of effective demand there is no investment in productive facilities by the private sector despite the government giving them all kinds of gifts, incentives and concessions, including a massive cut in corporate tax in 2018 and write-offs of nearly Rs 15 lakh crore worth of bank loans.

The Government, however, refuses to do what it should to help the economy to recover which is boost its spending.  Modi believes that the Government should reduce its own spending and allow the private sector to run everything.  This blind belief in neo-liberal dogma has resulted in Government expenditure remaining at 10-11 per cent of GDP despite the pandemic and the economic crisis.

Expenditure on Central Government Schemes/Projects, came down from 6.8 percent of GDP to 4.9 percent between 2020-21 and 2023-24. Expenditure on Centrally Sponsored Schemes also came down from 1.9 percent to 1.6 percent.

In the last two years, 2022-23 and 2023-24, expenditures on PM-Kisan, Food Subsidy, Housing (PM-AWAS) and MGNREGA have experienced cuts in absolute amounts. The combined expenditure on these four heads in 2023-24 (Revised Estimates) was 24 percent less than the expenditure in 2021-22.

The PM-Ujwala Scheme has supposedly increased the number of LPG connections by over 10 crores since its original launch in May 2016, of which some 2.3 crores were added during Ujwala 2.0, i.e., from 2020 onwards. These 10 crore connections account for about 30 percent of all LPG connections in India. The increase in total LPG consumption in India rose by 34 percent between 2015-16 and 2019-20, not very much greater than the 28 percent increase that took place over the previous four years. During Ujjwala 2.0, the growth has been even slower – between 2019-20 and 2023-24, the increase has been barely 11 percent.

What should have been done by the government? It should have taxed the rich to raise resources, and spent the money in providing better education, health, food security etc to the people. It should have boosted industrial investment creating more and better jobs. It should have reined in inflation by expanding the public distribution system. It should have ensured more welfare spending for empowering Dalits and Adivasis. Instead, it has launched an attack on the people, increasing both their burdens and their exploitation and done everything to increase the profits and  exploitation of the corporate, both national and international

(Data Sources: World Bank; Niti Aayog; NSSO; MoSPI; WID; Parliament Questions.)

STRENGTHEN THE ECONOMY!  GIVE RELIEF TO THE POOR! 

DEFEAT BJP!

Published by Communist Party of India (Marxist)