Narendra Modi's "modest" steps unlikely to bring Indian economy back on track, comments The Economist

By Our Representative
World’s top rating agency Standard & Poor may have lifted India's rating outlook to 'stable' from 'negative', with claims that this shows it acknowledges efforts by the Narendra Modi government to maintain fiscal discipline while reviving the economy and drumming up investment, influential British journal “The Economist” believes not enough has yet been done, and the new government’s “modest policies” will not bring back to nine per cent growth. The commentary comes when Modi is in the US, the stocks have returned following a three-day losing streak and the rupee showing signs of strengthening.
Continuing to offer strong views like before, The Economist, dated September 27 in an article titled “Reform à la Modi”, says, “When Narendra Modi’s Bharatiya Janata Party won a thumping majority for its pro-growth promises in India’s elections in May, hopes swelled that the new government would adopt economic reforms that had proved beyond the brittle coalitions of the past. Yet in defiance of the maxim that the boldest steps are best taken early, Modi has so far eschewed dramatic change.”
The Economist particularly notes, that the “cuts to subsidies (such as on fuel and fertilisers), which cost 2.3 per cent of GDP last year, have been deferred” and there is so far “no firm timetable for a national goods-and-services tax, which would boost GDP substantially by removing barriers to trade between India’s many states.”
The journal also takes objection to the fact that “caps on foreign direct investment in many areas, including supermarkets, remain in place.” Instead of taking strong decisions, it says, “the government has taken a series of small steps, ginning up India’s sluggish bureaucracy, for instance.”
Wondering if the chance to reshape India’s economy is “slipping away already”, the commentary says, despite a series of measures, the economy has been growing at 5.7 per cent “year-on-year”, but “that is not a sparkling rate for an economy that until a few years ago was growing at 9 per cent a year.” Though this is “a good deal better than in most places”, “the foreign money that washed out of India last year has returned”, and the “stockmarket has risen to record levels”, it adds, “Inflation is too high, at 7.8 per cent” and “the impetus for reform has slowed.”
No doubt, the journal says, “Modi has cracked heads” in the bureaucracy, and “many permits can now be obtained online”, and the result is that, “by the start of September the government had approved 175 stalled projects, according to Citigroup.” Yet, it says, “This good work was set back when, on September 24, the Supreme Court cancelled 214 of the 218 coal-mining licenses sold between 1993 and 2010.”
While giving credit to the Reserve Bank of India, especially to its UPA-appointed governor Raghuram Rajan, for taking steps to bring down inflation, The Economist warns, the new stability should help growth to pick up by not more than one per cent, from around 5.5 per cent this year to perhaps 6.5 per cent next year, and “unless the government does its part by adopting more radical reforms, the 9 per cent annual growth that India briefly enjoyed before the financial crisis is hard to imagine.”

Comments

Economist-editor's allegations on Narmada defamatory, baseless: Medha Patkar

Counterview Desk In a reply directly addressed to well-known economist, journalist and columnist Swaminathan S Anklesaria Aiyar’s two articles in the Times of India (republished here and here ), calling them defamatory and wondering whether they were borne out of “ignorance or a conspiracy through political alliance”, Narmada Bachao Andolan leader Medha Pakar has said that the Narmada Sardar Saravar Project and the people's movement by adivasis, farmers, labourers, fish workers, potters and all the generations’ old communities from the river valley have suddenly come to be focused on, since the Gujarat elections are in the doorstep. She believes that while the “defamatory accusations with baseless conceptions such as ‘urban naxals’ are to be laughed at as the electoral strategic moves, one gets shocked to read the articles by a known old columnist like Swaminathan Ankalesaria Aiyar, published in a reputed daily like the Times of India." According to her, Aiyar’s two articl

Hindutva groups threat to peace, freedom: US diaspora groups tell FBI, other govt depts

By Our Representative The Islamophobic and neo-Nazi ideology of Hindutva is a clear and present danger to peace and freedoms in the United States, a coalition of civil rights organizations told key officials of the U.S. Attorney General’s Office, the US Department of Justice (DOJ), and the Federal Bureau of Investigation (FBI) at a recent event in Edison, New Jersey. At the event titled United Against Hate, activists from American Muslims for Democracy (AMD), Hindus for Human Rights (HfHR) and Indian American Muslim Council (IAMC) made detailed presentations on this ideology of Hindu supremacism that is committing mass persecution of India’s Muslims and Christians and is rearing its ugly head in New Jersey as well as across the US. Attending the event were David S Leonardis, Special Investigator from the New Jersey Department of Law & Public Safety; Michael E Campion, Chief of the Civil Rights Division for the US Attorney General's Office; and Jonathan R Norbut of the U.S. Dep

Business back to normal? IIM-A survey says, sales expectations have sharply improved

By Our Representative The Indian Institute of Management’s Business Inflation Expectations Survey (BIES), which polls a panel of business leaders to find out their perception of slack in economy, including their inflation expectations, year-ahead cost expectations and the factors influencing price changes, such as profit and sales levels, etc., has said that the cost perceptions data indicates signs of moderation in price pressures. Carried out for September, the survey says, the cost pressure of the reporting firms has shifted from “very significant increase (over 6%) to moderate increase (3.1% to 6%).” It adds, “The percentage of firms perceiving over 10% cost increase y-o-y has declined. Over 21% of the firms in September 2022 round of the survey perceive that costs have increased very significantly (over 10%) – down from 26% recorded in August 2022.” Claiming to be a unique survey, in that it goes straight to businesses -- the price setters -- rather than to consumers or household

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

As polls approach, electorate 'failing to realise': Gujarat model is in a shambles

By DN Rath* Gujarat assembly elections, scheduled to be held on 1 and 5 December 2022, is viewed by many as dress rehearsal for the 2024 Lok Sabha elections. When the suffering people have been pointing towards redressal of some local issues like absence of cleanliness, sewage problem, shortage of water supply, troubles created by stray cattle, insufficiency of streetlights, etc., it is evident that they are not fully aware that assembly elections are being fought on ideological standpoints and policy decisions. Nor is there the realisation that the state is in a shambles and the much-trumpeted ‘Gujarat model’ of development has proved to be a hoax. Like other states, the people of Gujarat are also back-broken by steep rise in prices to the tune of 400% in last 20 years. It is not that the government cannot control the spurt in prices if it so wants. Apart from the fact that price rise is an inevitability in a capitalist economy, artificial shortage triggered by massive hoarding, b

Amit Shah accused of inciting communal passion: Demand to postpone Gujarat polls

Counterview Desk In an email representation to the Election Commission of India (ECI), Dr EAS Sarma, former secretary to the Government of India, has objected to the statement reported to have been made by Union home minister Amit Shah, who allegedly justified the 2002 Gujarat riots stating that certain sections of people “taught a lesson” to the rioters. Noting that the statement, if correct, “in effect implies those other than the law enforcement authorities had taken law into their hands”, Sarma says, “Shah's statement needs to be viewed by the ECI in conjunction with the reported fact that it was the Union Home Ministry that cleared the release of the eleven rape convicts in the Bilkis Bano case, directly related to the infamous Godhra incidents in 2002, which triggered the shameful sequence of events that shook the nation's conscience.” According to Sarma, if the statement is true, “I am constrained to draw the inevitable inference that it would have already impacted th

BJP poll gimmick? Bilkis Bano rape case 'pardon' vs Rajiv assassins' release

By Sandeep Pandey* Supreme Court has released six convicts in the Rajiv Gandhi assassination case. This was bound to happen as earlier AG Perarivalan was released in the same case, setting a precedent. Even though four of them are Sri Lankans but a popular Tamil sentiment favoured the release of these convicts which is why Tamil political parties supported this and resolutions were passed by different governments in Tamil Nadu to his effect. Rajiv Gandhi paid the price of sending Indian Peace Keeping Force to Sri Lanka where it got entangled with Liberation Tigers of Tamil Eelam and eventually the whole operation ended up is a fiasco. However, most importantly Sonia and Priyanka Gandhi and probably Rahul too do not have any objections to the release of these convicts. In fact, Sonia Gandhi played an important role in getting the death sentence of the only lady among the convicts Nalini commuted to life term through the Tamil Nadu Governor. Priyanka visited Nalini in Vellore Jail and

What's behind public sector banks showing huge profits in 2nd quarter of 2022-23?

By Thomas Franco* The quarter two results of the public sector banks (PSBs) appear to be noteworthy compared to a few years ago. All these banks showed good profits in the financial year 2021-22. Twelve PSBs made a net profit of Rs 25,685 crore in quarter 2 of FY23 and a total of Rs 40,991 crore in the first half of 2023. The combined profit of 12 banks in March 2022 was Rs 66,539 crore which was 110% more than 2021 – Rs. 31,816 crore. The Asset Quality Review of 2015 saw a surge in NPAs of PSBs jumping to Rs 8.96 lakh crore in March 2018 from Rs 2.17 lakh crore in March 2014. This was simply because the norms for NPAs were changed from 180 days to 90 days, and all restructuring of even genuine accounts was done away with. In 2018 NPA of SBI was 5.73% which has come down to 0.8% in Q2 of FY23. The NPA of Canara Bank has come down to 2.19% from 7.48% in Mar 2018. The same trend is seen in all public banks. Now SBI has seen a jump of 74% in its net profit, while Canara Bank’s profit is

Diminishing returns: Hydro projects contribute less than 10% of India's power generation

Counterview Desk Pointing out that India’s hydro generation remains around 10% for the last six years, the advocacy group South Asia Network on Dams, Rivers and People (SANDRP) has said that power generation from hydropower projects continues to show diminishing returns, as has been the story close to three decades now. Yet, says SANDRP in a note, the Government of India continues to push large hydro by announcing a slew of additional subsidies for hydropower projects, more for political economy reason. In fact, attempts are being made to flog unviable hydropower projects with various kind of manipulations, illegalities and violations, it adds. Text : In last six years, from 2016-17 to 2021-22, India’s large hydropower projects (projects above 25 MW installed capacity) have contributed just around 10% of the total power generation, going as low as 9.68% in 2017-18. In fact, in three of these six years, large hydro contributed less than 10% and recovering only marginally in the rest,

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Search This Blog