Growth Rate, Demonetisation, and GST: Jaitley’s Strange Logic


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If a minister is busy with two important portfolios, he is bound to make blunders. Jaitley is handling two major portfolios of finance and defense. It must be difficult for him to give justice to these two portfolios. The skirmishes on Indo-Pak border are enough to keep one busy for 24 hours as it has become an important pastime across the borders to claim the daily count of deceased soldiers and civilians on both the sides. The news channels on both the sides are giving such an important coverage to these encounters that the problems of the common man are buried. Given the movement and business in the area of defense, it will be the best that one man manages the affairs fully with concentration. Else a person in the position of Jaitley will have to work so hard that he will not have time to think through important surgical strikes within India like demonetisation.

Citing the reasons fo the slowdown in the growth rate of Indian economy, Jaitley attributed it to the global market slow down. Actually, the BJP/RSS Government is better placed that the previous government when it comes to external shocks. India’s biggest import is oil and the oil prices have hit the bottom and they are so low that India had a chance to revamp the economy. Instead of the lowered prices of the oil in the international market, the BJP/RSS Government did not share the dividends from these gains to the common citizens. The citizens are charged more than what they deserve for the gas, petrol, and diesel. It has been proved that demonetisation has indeed weakened the growth, and the growth slowed down considerably. To this, Jaitley’s response is this: demonetisation has set a new norm. It is a normative statement. Which new norm? What has the norm to do with the economic progress in India at this moment? Well, if the Government fails in something, there is no harm in admitting that something went wrong.

The decision of the demonetisation was an exercise in public relation, Modi needed to be itched in the minds of the Indians who were forgetting him, so Modi creates something shocking to be in the news. And people clap “Modi, Modi, Modi”. If you challenge the decisions, they respond, “Can’t you see he is doing something?”. Then Modi positions himself as a “New Robinhood”. Rob the riches and pay the poor. But in reality, Modi’s working is completely different: Rob the poor and pay the rich and make them richer. But the poor Indians hypnotised by India media are made to believe that Modi is doing something for them. Ask what? The answer is difficult to get.

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So coming back to Jaitley’s logic of demonetisation being a norm, and GST as the engine of GDP growth are completely unbecoming of a finance minister of the world’s largest democracy. Playing with numbers, manipulating base years, statistical maneuvers, and most important economic rhetoric will not feed the hungry mouths and it will not create the solid economy. GST was a welcome initiative of the previous Government and to BJP/RSS’s credit for taking it forward to adjust to new international norms is commendable, but that the common market achieved through common tax regime will lead to economic surge is doubtful. What India needs are targeted policies to bring the entire diverse mass of citizens into economic processes. The caste system pushes millions out of economic system and the economic system in India is arranged on caste lines, so that only a chunk of population (read Brahmins and Banias) benefit from any reforms.

This must change.

Also the Government must concentrate on hard development and not on soft developments like tax reforms and money replacing and digitisation. Hard reforms must include free education to all, making the workplaces and economies diverse, protecting and bringing women into workforce and concentrating of farmers. Above all, the poor must at the centre of the economic policies, because in the absence of that the Justice as a goal for this nation becomes illusive.

Author – Mangesh Dahiwale, Human Rights Activist

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