Bindu Dalmia Social commentator and author of national bestseller Diary of a Lutyens’ Princess
Since UPA times up to the NDA rule, inequality has been at its highest since 1922, and though ‘absolute poverty’ reduced progressively, ‘relative income inequality’ has risen incrementally.
That the BJP ‘has 2019 in the pocket, and now plans for 2024’ sounds like an idealistic goal, because much can change in a year despite Amit Shah’s minutiae perfection in strategising state or Central elections, as economic growth contracts to 5.7 per cent post-demonetisation. In its last lap of governance, the BJP has just a year to retrieve what was lost so as to deliver on jobs and economy.
While the reform built immense political capital for Narendra Modi as seen in the Uttar Pradesh elections, and made informal economic activity difficult, conversely, the BJP did little to restore its initial business-friendly traits. No government can antagonise business and create prosperity or jobs, because ‘governments don’t create wealth. Businesses do.’ Despite conducive macro-economic factors such as drop in inflation and lowering crude, we in a way, swam against the tide by ‘knocking and shocking’ the system.
Uttar Pradesh elections held in February was too soon to assess the cost-benefit of demonetisation, so the Modi wave was in full swing, perceived as he was, and still is, the Messiah of the Masses. Modi’s speech in November 2016 placated us all that this reform was ‘short-term pain for long-term gain’, so ‘We the People’ braved it out. But 10 months down the line, the stoicism of the masses is wearing thin, as long-term pain is a grim reality and the despair is eroding the BJP’s strongholds post the reform. Also, anti-incumbency building up in Rajasthan, Maharashtra, Madhya Pradesh and Haryana has made Shah look to virgin political territories to preempt regional losses and make-up for the swingshortfall in 2019. The Modi government can only regain momentum should the BJP manage to put the economy back on its feet. It’s little consolation that the party maintains its lead more because the Opposition is unable to catalyse, rather than actual delivery on the ground.
Strategically, enacting the last tranche of the reform by withdrawing `2,000 notes could be a masterstroke, as only the rich would be by now left holding big-ticket currency. That would surge Modi’s popularity ratings enough to take a political punt in preponing Lok Sabha elections, trashing all caste arithmetic of an Opposition in disarray, and siphon black currency reinfused from the markets.
However, a reform that increased the taxpayer-base by nine million new assesses has widened the adversarial stance between the state and citizens. Citizens have grown cynical since the UPA’s misdemeanors believing, “The state took more through taxes from the people than it gave back in terms of amenities, security, safety, infrastructure, education and public health.” Equally, the state mistrusts citizen-crooks who avoid taxes because ‘black money which was lying in people’s basements’ at inflation-negative rates has now round-tripped and found its way into the formal system, earning market interest rate. Optimising Data Analytics to keep tabs on the money trail is efficient administration, but the menacing powers conferred on the Income Tax Department shows a state on overdrive to prove itself right and citizens wrong, which is coercive and inimical to growth.
Finally, moving towards metrics of a Universal Basic Income is a practical, futuristic solution to solving inequality, where governments guarantee each individual a minimum income, providing access to basic goods and fair distribution of resources. Because only equitable progress and an upbeat economy will ‘wipe every tear from every eye’, and win Modi hearts and votes for 2019.