If you thought climbing Mt Everest was tough, our new finance minister Nirmala Sitharaman’s task of presenting the Budget is up there.
After holding government posts, noted economists have returned to leafy Ivy league universities, and claimed that various GDP numbers are made up. I guess they should know, since they made them up.
Many large institutions can’t service their debt. Legitimate billionaires are looking for buyers, and economic fugitives would rather stay in foreign prison than attempt a legit comeback with a business in India.
Clearly, the trickle-down theory of economic success, which so many people in post-liberalised India hold dear, also works for economic failure. It appears that if one puts bankrupt promoters in jail, or threatens them continuously for unpaid loans, jobs disappear. Because no promoter wants to hire anyone.
Sure, it is, no doubt, a fantastic achievement to come back in government, with such an overwhelming majority that the Opposition has retired hurt. However, in terms of economics, it doesn’t look great for a party whose entire slogan was, ‘With everyone, for everyone’s economic growth’, to have, during its administration, a demonetisation scheme that felt like an unexpected punch to the nation; a goods and services tax (GST) more haphazard than the Pakistani cricket team’s performance record; India’s largest private airline go belly up; India’s largest mobile company also go bankrupt; and a whole host of non-banking financial companies (NBFCs) teetering on the edge.
I’m all for a strong, stable powerful government. However, based on the performance of the last few years, GoI’s slogan is looking more like, ‘With everyone, for everyone’s economic collapse’.
Sometimes, though, economics is luck, perception and belief — sort of like the Indian cricket team under Sourav Ganguly. The crazier US President Donald Trump gets, the more the US economy booms — which could actually just be the result of good economics unleashed by his predecessor Barack Obama, but what the hell, Trump will take the credit.
When the decade’s economic analysis is done, Trump will look like the hero and Obama will end up looking like his stunt double. I don’t doubt that the anti-corruption measures, the stabilisation of a unified tax regime, and the bankruptcy law are hugely beneficial in the long run, and will transform India as much as liberalisation did.
But, right now, to a young impatient nation, there aren’t any jobs, auditors fear policemen, Infrastructure Leasing & Financial Services (IL&FS) starts a domino effect, and every other thing said by the finance ministry and Reserve Bank of India (RBI) sound like just empty words.
As you read this, Sitharaman will be presenting her first Budget. Rumour has it that the finance ministry is hush-hush, and folks aren’t leaking anything. It remains to be seen if this is the worst-kept secret, or the best one.