More than 50 million jobless in India, Gujarat model has failed, demonetisation helped rich: California economist

By Our Representative
A senior Indian American economist, Prof Pranab Bardhan, has said that, as against Prime Minister Narendra Modi's big promise of creating 100 million jobs to win the 2014 Lok Sabha elections, what one is witnessing today is a movement in just the opposite direction: "We have a total number of workers exceeding 50 million who are either unemployed or underemployed", he has said in a comprehensive interview.
"This", says Prof Bardhan, who is is at the graduate school in the department of economics at the University of California, Berkeley, "Doesn't count the hundreds of millions of women, who are outside the labour force." He adds, in India, in order to gauge unemployment, the surveyors only ask questions "about employment to only those who are part of the labour force".
Pointing out that "the Gujarat model of high growth was not a particular exemplar in job creation", Prof Bardhan says, the "Gujarat model, in spite of its high manufacturing growth, was particularly in sectors like petroleum refineries and petrochemicals, which are highly capital-intensive. They don't create that many jobs."
According to Prof Bardhan, "It is by now clear to many people that the pace of job creation has not been shining. In fact, some of the data -- like the annual data produced by the labour bureau surveys -- show that there may have been even some absolute decline in jobs", adding, though, " This is not new. Even for the last 40 years, job growth in India has been by and large rather sluggish."
Coming down heavily on demonetisation, Prof Bardhan says, a "This has turned out to be one of the grandest hoaxes ever in Indian political history", adding, surprisingly, the step came " after insignificant progress in getting the black money stashed in foreign accounts or from repeated announcements for tax amnesty".
"The announced objective was to vaporise the corrupt cash hoarded by the rich. But then other objectives were also mentioned -- to eliminate counterfeit money, to prevent terror funding. And when these things were not working, they talked about the need to digitise the economy. So, goalposts were changed over time."
"Looking back now", he says, " We can say that most of the money has come back. This means that black money hoarded in the form of cash was tiny. Or, even if it was not tiny, it has been deftly returned through the backdoor with the complicity of corrupt bank officials."
Prof Bardhan says, "Usually, most rich people do not keep their black money in cash. They use other means like real estate, gold, foreign account etc. I don't know what gave the government the idea that most black money was stashed in cash", adding, "To this day, the hardship that it caused has not been properly measured."
He underlines, "What was done was a cruel joke on the Indian poor, particularly those in the informal sector. I think demonetisation was a hastily-thought-out programme by some ignorant but arrogant people in Delhi and foisted on an unprepared and somewhat confused bank bureaucracy."
"We have now data -- not for whole of India though -- on the extent of losses in jobs and wages", Prof Bardhan opines, adding, "Take the textile hubs like Panipat in north India and Tiruppur in south India. Now, there is evidence of huge losses in trading as well as jobs. We also have evidence of small companies losing out and the informal sector failing to pay wages and workers going back to their villages."
Critiquing those who say that tax returns increased because of demonetisation, Prof Bardhan quotes the Economic Survey as saying that "the average income level of the new tax payers was Rs 2.7 lakh, slightly above the tax threshold", which suggests that "the new people brought under the tax net are not the superrich who have been evading tax all these years."
According to him, "They are more likely to be relatively small people who have come under the tax net because of pressure from the banks to link accounts with the Aadhaar card and the PAN card and the Goods and Services Tax (GST) bringing some people in. So, it is not that fat cats were disgorging their illicit hoards due to demonetisation."

Comments

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

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

Innovative, Hrishikesh Mukherjee's movies often banked on excessive sentimentalism

By Harsh Thakor* Late Hrishikesh Mukherjee more popularly known as Hrishi Da, whose birth centenary was celebrated recently, ranks amongst India’s most progressive and innovative film makers, exhibiting mastery in craft of making socially relevant themes. Mukherjee knitted plots together with great visualisation and sensitivity, be it in comedy, pathos, anger or romance, weaving every ingredient in proper proportion. Melodrama was restrained and scripts dissected with surgical skill. Without over romanticisation, Mukherjee would do complete justice to the role of the character. He did not champion art films, but gave commercial films an artistic touch. Rarely have artists transcended the medium of cinema to project the real essence of their cultural values so or film directors who narrate a simple tale of regular families that have characters of unique shades, characters which are bound to touch human emotions universally. His characters frequently underwent life-changing journeys

GoI's productivity linked incentives to corporates 'without independent analysis'

Counterview Desk Wondering how prudent is the Government of India's (GoI's) Productivity Linked Incentive (PLI) scheme, EAS Sarma, former secretary, GoI, in a representation to Nirmala Sitharaman, Union finance minister, has said it appears to be nothing more than subsidy to the private sector without any responsibility. Giving a specific example against the backdrop of announcement of 50% subsidy covering the project cost of the Vedanta Group's decision to set up a semiconductor fabrication plant in Gujarat, in collaboration with Foxconn, Sarma says, "The total cost of this project is reported to be Rs 1,54,000 crore. 50% of this works out to Rs 77,000 crore." Stating that this creates the impression that the entire subsidy allocation for the semiconductor manufacturing sector would be appropriated by this company, Sarma says, "The Gujarat government did not lag behind in liberally announcing similar incentives for the Vedanta-Foxconn project. It offered 7

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".

There aren't any hard data to prove forced conversion, why move for a Central law?

By Fr Cedric Prakash SJ* Srinivasan Jain, the popular TV anchor with NDTV, has done a tremendous service to the Constitution of India and, thereby, to the people of India! In a hard-hitting exposé on his weekly segment ‘Truth vs Hype’, released on 19 November, Jain talks about the so-called ‘Forced Conversions’ with incontrovertible facts and the falsehoods and myths that are built around the issue! A good part of his expose is an interview with Ashwin Kumar Upadhyay, the petitioner in the current case on ‘forced conversions’ in the Supreme Court. Jain directly takes on Upadhyay and the 65-page petition submitted by the latter to the Supreme Court. Jain emphatically states that not a single example cited by Upadhyay in the petition comes under the ambit of ‘forced conversion’. In fact, Jain proves that one of the examples is completely fake! Upadhyay, however, continues with his rant without being able to authenticate or substantiate or furnish a single bit of evidence to prove his

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

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