Not Nationalism, It’s The Economy, Stupid!
By strongly defending its track record on the economy, the National Democratic Alliance government admitted today that it is not politics, but ‘it’s the economy, stupid’ as far as the next Lok Sabha elections are concerned.
For now, the Gujarat election is weighing heavily on the government’s mind. This was evident when it held a one-of-its-kind press conference.
Finance Minister Arun Jaitley, flanked by his top officials, bombarded data – through a long slide-show presentation – to say that India was the fastest growing economy, big reforms like the Goods and Services Tax may have a short-term impact but will be beneficial in the long term; and that the government will respond to challenges appropriately. The peg was the Cabinet’s decision on Tuesday to spend Rs 5.35 lakh crore on the new ‘Bharatmala’ plan for highways, and a new repackaged Rs 2.11 lakh crore recapitalisation plan for stressed public sector banks.
The press conference went beyond the usual practice of the finance ministry detailing macroeconomic numbers. A detailed presentation was given on various infrastructure projects – roads, railways, ports, the Gram Sadak Yojana, not to forget the Saubhagya and Ujjawala schemes. While doing so, Secretaries appropriately switched to Hindi.
Recapitalisation of banks came as a smart mix of bonds worth Rs 1.35 lakh crore that banks would buy from the government, and Rs 76,000 crore from the capital markets and budgetary support.
The finance minister said that the nitty gritties of the recapitalisation bond were still being worked on, and would be shared later.
Jaitley concluded the presentation by saying that the banks would be asked to lend to the micro, small and medium enterprise sector. The MSME sector, which is under severe stress, is electorally very critical for the Bharatiya Janata Party. In fact, during the entire press conference, the emphasis was on how these measures will generate jobs, create demand, kickstart business, and help the common man (read voter).
Barring the bank recapitalisation plan, the 100-plus minute press conference was a recap and reiteration of various past government actions. All assumptions are based on hope. Then why this press conference? It seems the government has realised that it is always not possible to steer public chatter in a certain direction.
Despite its best efforts to push a hyper-nationalistic agenda laced with religious fervour, there is a definite change in the public mood and the government has realised that its narrative on the note ban and GST have not been fully bought into by the public. People are getting increasingly disappointed and are asking questions which are purely economic – about jobs and growth.
The government might have believed, wrongly, that its preferred emotional cards are always effective but it might have forgotten that the emotions attached to money are much more powerful.
If there is no real feeling of economic well-being, if there an erosion in income, if there are job losses — the impact will be felt by everyone. That’s a secular fact which requires no debate. Political parties want to believe that the narrative or propaganda they want to impose can always work. But that’s not the case. This press conference showed that worry. That is why the idea behind this was to send a message that all was well on the economic front.
Clearly, that’s not enough. Real work to put the economy back on the growth track will need to be visible, going forward.
Sanjay Pugalia is Editorial Director at Quintillion Media.