Finance Minister, Punjab
EVERY Budget, I am reminded of the famous words of John M Keynes, who said that a master economist “must possess a rare combination of gifts. He must be a mathematician, historian, statesman, philosopher — in some degree”. One could argue that Keynes talked of these qualities in the context of an economist, and the Budget is ostensibly a fiscal exercise. But Keynes’ view provides a beautiful prism to look at the economic legacy of any government. Try and look at the Modi government’s overall performance on economics on any of these yardsticks and one gets a fair idea of its remarkable failures.
In the role of mathematicians, the economic and fiscal policy managers of a nation need to possess numerical exactitude and respect for statistics. The NDA rule has been marked by its love for inexactitudes. Statistical norms have been flouted, the numbers have been ‘revised’ as the government has an axe to grind. This statistical skullduggery means that the numbers the government now furnishes are viewed with skepticism. ‘Lies, damned lies and Modi statistics’ is the prevailing belief in the international media — a mighty fall for the land of PC Mahalanobis and the Indian Statistical Institute.
Economic management of a country requires an understanding of history, an appreciation of quality work done by the predecessors, respect for institutions and commitment to best practices and conventions. Modi’s PMO has shown an undisguised zeal to undermine the institutions which form the foundation of our great nation. From impairing the RBI’s autonomy to presenting an unprecedented sixth Budget in a five-year term via an interim Finance Minister, the government has set terribly bad examples. The government’s own economic adviser’s account seems to reveal that his counsel was ignored, or worse, that he was not in the know of some of the crucial decisions. Similarly, speaking from my personal experience, I can say that the GST Council — formed in true spirit of our consultative democracy — was rarely kept in the loop.
The economic policy requires a statesman’s vision — rising above petty politics, showing intellectual finesse and having your ear and feet to the ground. Most importantly, it involves keeping the honour of one’s promise. The Modi government was elected largely on the promise of creating meaningful jobs in the organised sector. Not only has it miserably failed in doing so, but it is also guilty of suppressing the National Sample Survey Office (NSSO) report that is a scathing indictment of its ineptitude. When the Prime Minister suggests that frying fritters (pakoras) is gainful employment or when the interim Finance Minister offers a pittance as relief to the marginal farmer, it comes across as a cruel joke. The disingenuous replies of the government’s spokespersons after the NSSO report was made public cannot hide the fact that India is seeing its biggest ever job crisis. If there is meaningful employment creation, its benefits are for everyone to see. I am often reminded of an instance that goes back around a decade when MNREGA had been implemented and was successful in creating jobs in rural India. Since meaningful jobs were being created for people in their own villages, migration reduced. As a result, there was a severe paucity of agricultural labour in Punjab. I remember then Finance Minister P Chidambaram commenting that if big agriculturists are struggling to find agricultural labour without revising the wages upwards, it shows that farm labour has got better opportunities. He couldn’t have been more right. The point is that when gainful employment is created, its evidence is too obvious to be missed. One doesn’t need to concoct ‘pakoranomics’ to convey that people are happy doing what they do.
Finally, good economic policy presupposes the policy-makers to be like Plato’s philosopher kings — possessing knowledge and showing sound judgement. Their decision-making is neither as non-transparent as the Rafale deal nor as quixotic as demonetisation. It calls for carefully considered decisions and meticulous planning, unlike the tinkering and poor execution which has been the hallmark of GST in India.
Conscious of its own failings, the Modi government breached constitutional propriety by presenting a ‘full-fledged’ Budget instead of a vote-on-account. It hoped that the tall promises for various sections of society would arrest the slide in its appeal. The citizens, however, have now seen through the sophistry. They understand the devilish details, the insufficiency and the poor timing of the whole affair. In a way, it is fitting that this feigned Budget is the final announcement of a regrettable five-year tenure — a clumsy icing on an unsavoury cake. Mr Modi may have come to power through his mantra of being high on rhetoric (and poor on delivery), but it is unlikely that he will get to do an encore. As Abraham Lincoln is reported to have said, “You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.”