Finance Minister Nirmala Sitharaman has drawn a response from the reticent former prime minister Dr Manmohan Singh. The FM placed the blame for the current NPA crisis that threatens to scuttle the banking sector at the doors of the former PM. Singh, in his pointed statement, has made it clear that the government does not appear to have a clear prognosis of what ails the economy and was groping in the dark. He was spot on in identifying the fact that the government was more often than not looking to hide behind the fig leaf of the burden of decades-long Congress misrule when it is shown the mirror on many aspects. It is high time the government started taking responsibility for the state of the economy. A possible first step would be to concede that things are not alright despite any efforts taken as of now.
There is a huge gap between the expected returns and what has been realised. Perhaps the biggest miscalculation on the part of the government was with the general psyche. It pegged on sustained interest among people on its anti-corruption sloganeering. As days pass, though, the incumbent government, too, is evidently headed the same way as its predecessor. It may have taken a little while for the new faces of corruption to emerge but they are bound to emerge as days pass. It will take the FM more than just blaming the predecessor to show that the present government will be able to pull the country out of the quagmire that its past decisions have clearly led to. Most admirers conveniently forget that this government has already enjoyed a full 5 year term with complete majority from 2014 to 2019.
To add insult to injury it is rumoured that the government had stopped printing of the two-thousand rupee note as a prelude to a second round of demonetisation. This has to be observed with the post demonetization period of 2016-17. At that time, various secretaries and ministers of the government of India appeared on Live television virtually every evening, and spoke on change of the previous evening’s monetary policy. That instability created a mindset of fear and apprehension which led to more damage than demonetization itself. Unsure and ever changing government policies drive away investments and sincerity. It appears the government is still banking on the power of propaganda to rescue itself even as the ground realities are changing quickly. A large portion of the population that was enthused with the government’s various schemes may not be as thrilled at present times, given that job losses have mounted with the industry holding back investment and expansion. The industrial sector has withdrawn itself from fresh investments as the government showed signs of taking measures that could adversely impact its interests. The government may give sops to the industry in a bid to revive investment, but it cannot force such enthusiasm unless policies prove otherwise. Those policies also have to be kept away from constant tinkering and their consistency shall only be proven by passage of time.
If the government is indeed serious about getting its act together and lifting the economy back on track, it will have to look for solutions now rather than continuing with the blame game. It is quickly spending its corpus of trust, which can deepen pessimism and affect growth.