Source: Business Standard
Narendra Modi, characteristic of a true politician, found the right point to hit the government with - look what we got he said, and look what we gave he said. Whether true or not is not the point; he touched all and mighty with that simple statistic - look what I got, look what I did with it. And look what you did with what we gave you, he went on to say. True to form, the prime minister and his ilk had nothing to respond with, they do not like to fight and these days they are also not very comfortable with numbers. The number of times they have gone wrong is almost as great as the number of scams in and around them. But Chidambaram is made of different mettle, a good lawyer finds the right set of facts to counter with and he did it as was expected of him. Look at the averages and not just two points, said this illustrious member of the Congress, which has only two points, we might add, and many many non-averages.
Yashwant Sinha was told by the Bharatiya Janata Party brass to respond, for Modi does not respond to anyone but his own ambition. Like the great Shivaji from his neighbouring state, his role is to create chaos at one place and quickly move on to other. Others such as Yashwant Sinha had to quickly come up with a good repartee against Chidambaram. Do not act like a terrorist with numbers, you cannot take averages on such important matters, Sinha said. That is food for pleasant thought; if averages can be equated with terrorism then the whole Cabinet and the Parliament and the political ilk could be quickly assigned the Tihar residency.
Meanwhile, one of the two points in the Congress made a point of shooting lethal words at his own government. The biggest fallout of all of this, is that Modi has had two days without a headline to his name. Growth, economy and statistics have once again taken a back seat. Modi - the Shivaji is looking for his next item to create some hungama, to take the newspaper real estate back from Delhi's princeling. Trust his managers will come up with innovative use of statistics. And then the Chola will respond in his characteristic manner, and the Delhi sultanate and its clueless nobility will muddle, while Shivaji will manage to grab some more real estate from the rulers of Delhi. What fun terrorism with numbers can be!
But on to more serious matters. Has the United Progressive Alliance (UPA)/Congress made a mess of what it got? It may not have initially in the UPA-I days, when it had stronger coalition partners who could keep a check on the Congress. But in its UPA-II phase, the Congress has to be assigned complete responsibility for slowing growth in most sectors and negative growth in others. Admittedly, growth need not be seen as a year-on-year concept, but as a longer trend. However, the longer trend, in the case of UPA-II is doubtlessly that of a sustained fall. And this fall in growth is across most sectors. In some sectors such as mining it has become negative, and so will the manufacturing sector if the rupee does not fall enough to compensate for inflation. No wonder most manufacturing titans have explicitly or implicitly moved their support to Modi with his promises of achieving high-sustained manufacturing growth (rivalled only by Uttarakhand and Himachal Pradesh with their special tax-free status).
Point or averages, the Congress' economic managers have to take chief responsibility for falling growth in India. Their first flaw has been their unwillingness to stand up to the high command. Their second flaw has been their inability to adequately and properly advise the high command. By letting others gain control of the chief policymaker (Sonia Gandhi for the un-initiated) they had lost the only important role they needed to play. The third flaw has been their unwillingness to resign, once flaws one and two were apparent.
All in all, growth will continue to slide over the next few quarters. It may also slide into the negative in some sectors and in some quarters. And rather than take on Modi, Chidambaram will do better to take on the task of educating the Congress, Rahul and Sonia on the importance of growth. Modi, meanwhile, will keep on finding such points, there are too many for the picking for someone of Modi and his advisors calibre. But it is also high time Modi stopped beating a dead horse and came up with a more clear vision of what he will be doing apart from getting more investment into the economy.