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Demonetization To Crash In Commodity Prices Where BJP Stands In 2019 Elections

Demonetization To Crash In Commodity Prices Where BJP Stands In 2019 Elections


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Tasneem Kabir

Four years ago, India’s democratic set-up saw, as far as power is concerned, a major and clean change of hands: the UPA alliance’s defeat paved way for the NDA’s power. At the stronghold of this alliance was, undeniably, Narendra Modi.

With four years of an intricate series of successes and failures, the BJP as the chief member of the NDA alliance, can be seen hustling hard to keep its footing firm in the political arena, even if sometimes a bit too obviously.

As the 2019 Assembly elections draw near, the public, the smartest element of a democracy, seems to be taking advantage of the fact that at this point of time, with barely months left for the Assembly elections; the parties are most vulnerable and most conceding.

As a result, the resistances, protests and rallies against the BJP’s regime have intensified, the most recent being an assemblage of farmers marching all the way from Uttar Pradesh towards the capital.

Reeling from a crash in commodity prices, more than 50,000 farmers from Uttar Pradesh, a top producer of wheat and cane, blocked part of the main highway to the capital.

They also sought loan waivers, cheaper power and tougher action to get sugar mills to pay dues owed for their cane, as discontent in rural areas turns to anger against Prime Minister Narendra Modi.

What received international coverage, however, was how the police dispersed the crowd: Police on Tuesday fired teargas and water cannons to halt and scatter the march! This seems to be the ultimate punctuation to the BJP’s pre-election anxiety.

Nonetheless, let us attempt to follow the BJP’s journey through these four bygone years and unearth their legacy or, if the case may be, lack thereof.

Let’s pick up this journey from where it all started. When the Narendra Modi-led National Democratic Alliance (NDA) government took charge of the country’s course four years ago, the Indian economy was still recovering from the mini-crisis of 2013—when the rupee had crashed after India’s twin deficits (current account deficit and fiscal deficit, which had ballooned out of control).

Since then, the government has succeeded in consolidating the steps taken during the end of the previous government’s term to control the twin deficits, and to bring down inflation. Moreover, India has received a relatively larger share of FDI inflows under Modi government.

The domestic investment cycle has however disappointed, and so have exports. While the government had the good fortune of lower oil prices for most of its term, it had also had the misfortune of inheriting a messy bad debt problem, which have slowed down investments.

The slowdown in exports, particularly in small-scale labour intensive sectors, may however have been a self-inflicted wound. These sectors bore the brunt of the government’s attempts to formalize the Indian economy.

As for economic reforms, the much debated-over GST Bill, that the UPA had only managed to propose, the BJP is credited for having formally introduced and inducted it into the economy.

“A good and simple tax” is how Narendra Modi describes it, but the deliberations run much deeper. GST came in to the picture in the Indian Economy under Prime Minister Narendra Modi’s Government. GST came in as a replacement for existing indirect taxes.

While it has proven its mettle in aiding Removal of cascading tax effect, i.e. tax on tax, an Increase in the demand and supply of goods and services, and an overall increase in production, it has brought forth several challenges that, we are told, would get better in the long run.

These include an Impact on pricing of goods and services due to subsumed taxes, the presence of States in India that still lack IT Infrastructure, continuation of specific exemptions on central GST and state GST, and a general increase in prices of goods and services.

Early on in its manifesto, the BJP declared an open war on corruption, and paved way for the bittersweet phenomenon of demonetization in tune with its promise.

The objective of demonetization as claimed by Government of India was to curtail the black money running as shadow economy and to stop the use of counterfeit cash to fund illegal activity and terrorism.

The sudden nature of the announcement—and the prolonged cash shortages in the weeks that followed—created significant disruption throughout the economy, threatening economic output.

While the most forthright achievement of demonetization has been seen in the drastic curb of terrorist activities as it has stopped the funding the terrorism which used to get a boost due to inflow of unaccounted cash and fake currency in large volume, this has been possible by upping the ante – India is an agriculture based economy and due to the cash crunch, the farmers’(especially small and marginal who largely depend on cash to buy seeds, fertilizers and to pay for sowing, borrowing water for irrigation and for other related agriculture) equipment remained worst affected.

Further, since small branches of the banks were also not supplied with adequate cash within time of sowing season of the crop, farmers could not get their crop loans disbursed.

This added to the woes of the farmers leading to a weak agriculture production the coming year. Lastly, many Economists are of the view that Rs.2000 currency note will be much easier to hide and can be used to store black money in shorter space.

With a multitude of comic strips and cartoons about the various trips abroad that Modi took in these four years, it is hard to see them in a utilitarian light.

Yet, the nation saw significant results, both positive and negative. While the nation saw impressive deals ranging from defense to IT Cooperation, the most recent being a S-400 deal with Russia, there are two external affairs matters that command our attention.

The cardinal one is the recent COMCASA signed between the USA and India: This pact, in the eyes of the public, has dubbed the government ‘servile’ to the US, for the incessant demands of the USA to increase imports from the United States and give up on oil imports from Iran have the potential to greatly harm the Indian economy.

And yet, the BJP seems utterly euphoric for having struck this deal.

The second issue is that of the infamous Rafale deal, about which the BJP is being very stealthy.

The Rafale deal, having brought the NDA alliance under the scanner for large-scale corruption, has also consolidated the adage that was so far only a floating claim – the NDA’s intimate association with top industrialists like the Ambanis, and its attempts to further their causes.

What’s more, the fact that the Centre keeps reiterating that they have closed the deal at a rate 9% lower than the one proposed by UPA, they are constantly dodging the question of how the prices of the fighter jets went up, and the number of shipments went down.

This constant evasion of the elephant in the room places the BJP in a compromising situation in the public eye. Yet, amidst all this sticky quicksand of a situation, the Finance Ministry, in a welcome and humane move, decided to reduce the taxes on oil amidst rising global prices and the spiralling depreciation of the rupee and many states followed suit.

This was a much-needed move, both for public welfare as well as the semi-eroded reputation of the Centre.

Lastly, we ought to recognize the fact that deadlines bring out the best in each of us, as the nearing elections have done for the incumbent government.

The journalistic circle is confounded at the hasty Triple Talaq bill that the BJP approved as an ordinance, despite its passage being pending in the Rajya Sabha.

This is clearly seen as an attempt on part of the Hindutva-harboring, centers-right BJP to hit a chord with the Muslim voter’s right before the polls. Further, any discussion of the BJP regime would be incomplete without the Ayushmaan Bharat scheme, famed to be one of the largest in the world and popularly dubbed as Modicare (in analogy to the United States’ Obamacare).

The cycle of BJP’s shenanigans to put up a good image in the pre-election scenario comes full circle when we consider why such an excellent health-care scheme was introduced by a government towards the end of its tenure. Surely, a sound government would have introduced it early on, and worked on it throughout the time of its political power. Clearly, that wasn’t the Centre’s agenda, for the show has begun.

In tune with the endeavours at repositioning its image, it seems that the BJP has been pressurizing its RSS wing to realign itself with the party’s stratagem – the RSS has been going around delivering speeches that it is not anti-Islam, and that it promotes tolerance.

Right, and that’s how you justify years of hate-crime against the Muslim population and the hardline Hindutva statements that have hurt thousands of sentiments over the years.

How the RSS expects the citizen to buy these tales of deceit remains beyond comprehension, as does the patchwork of public welfare schemes, economic reforms and major repositioning/rebranding and attempts at pre-election brownie-points procurements that the BJP seems to be putting out on the line!


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