For now, moderate growth along with people’s plight?

Recently global financial service provider Moody’s Analytics observed that India’s economy has managed to be back on track after the pandemic. It said. “Following a robust rebound of over 9 per cent in the year ending March 2022 (fiscal 2021), we expect real GDP to grow 8.2 per cent in fiscal 2022, the fastest expansion among G20 countries globally and partly reflecting ongoing base effects from pandemic-led disruptions.”

But we all know the people’s sufferings have not ebbed. With high prices of fuel and vegetables disrupting their lives, the rural people have been forced to slip back to use of older mode for cooking like firewood and cutting down on non-existential expenditure (for example, putting their children to state-runs schools instead of private ones). There are empirical proofs of all these happening.

So are we going to enter an era of economic growth sans betterment of people’s life?

Unlike the Moody’s, the annual report of the RBI made public on last Friday sounded sceptical about at least the near-term future. It said that the escalation of geopolitical tensions into war from late February 2022 has delivered a brutal blow to the world economy that was battered through 2021 by multiple waves of the pandemic, supply chain and logistics disruptions, elevated inflation and bouts of financial market turbulence.

According to RBI, The global macroeconomic outlook is still overcast with the economic costs of the war and sanctions, though India is better placed to overcome the shocks. However, it admitted that inflation and worries on economic growth have multiplied the risks of financial markets. It has also expressed its worries on the increasing cost of raw materials for industries, increasing transportation cost and supply crisis, as all these may accentuate the retail inflation by carrying forward to it the high rate of inflation (above 15 per cent) of the wholesale market.

The report has come in the wake of release of the data on last financial year’s growth figure in a few days. The Annual Report sounds much more cautious than the central banks general stand all along that could be summarised as a tone of ‘all is well’.

The union finance minister Nirmala Sitharaman has recently claimed that the inflation situation is within control. Now, the term ‘under control’ is a relative phrase. It can be so that the government is concerned solely with growth figures and statistics on overall recovery figures, which can theoretically look impressive while the people in general, and the poor in particular, rot

Statistics is something that always keeps the scope of hiding a lot open. A bad crop affects the lives of at least 40 per cent of the population of this country, but its reflection in growth figures is much less. So it is not impossible that we can have still growth figures of 7-8 percent (which is anyhow not impressive enough to recover the lost momentum) while a sizable section suffer.

Another tragedy for our system is that traditionally India is a country of underemployment, and a large segment of the rural and poor people is accustomed to bear the brunt of bad days. They do not protest much, and their plight is not necessarily reflected in electoral outcomes.

After all, public memory is short and the general election is still two years away. And then people can be won over by last moment lollypops of doles and some other emotive issues ranging from regional pride to Hinduness. Again, unlike 2014 when the election came after years of bad days, 2024 is not going to see any charismatic leader steering the opposition, and so the TINA factor will help the ruling party.

Altogether, the Narendra Modi government do not have much to fear about the political outcome of the economic distress of the common man. So, it is likely that it will follow the crude rightist track it has followed so far that ignores the demand side and put the whole thrust on augmenting supply, hoping the product will find market, either internally or externally. As Russia and China are emerging as villains of peace in modern times, almost the whole world is now eager to lessen dependence on Chinese supply chains, and that offers India good scope to fit in with new supply chains that will emerge in future. It expands the scope of selling whatever is produced.

And so, perhaps for a year or so, we may see a period of moderate growth along with continuation of people’s woes. Major sops for the people in the form of increasing their earnings are expected only in the next budget, and not before that. – INDIA NEWS STREAM