Tag Archives: RBI

Modi mocks ‘pessimists’, but RBI says a whole lot of Indians are pretty pessimistic about the economy

Last week, Prime Minister Modi gave an hour long speech denouncing ‘pessimists’ who refused to see the bright side of demonetisation and other transformations that his government’s able management had visited upon the economy.

We at Kafila, did a quick fact-check offering many reasons for pessimism, but as they say in Delhi – humari kya aukaat hai?

Now, a set of surveys by the Reserve Bank of India have concluded that 65% of the 5100 metropolitan households polled feel the economic situation has either worsened or stayed the same. It’s a small sample, but the results are revealing.  To quote :

Households’ current perceptions on the general economic situation remained in the pessimistic zone for four successive quarters, with the outlook worsening — RBI

For those you wondering – “four successive quarters” is a full year.

I would urge most readers to read the report in full, but here are some key takeaways:

Continue reading Modi mocks ‘pessimists’, but RBI says a whole lot of Indians are pretty pessimistic about the economy

Modi says the economy isn’t so bad; He’s right – it’s worse

by Samarth Bansal and Aman Sethi

On October 4, Prime Minister Narendra Modi offered a robust defence of his government’s management of the economy, shortly after the Reserve Bank of India lowered its Gross Value Added (GVA) growth estimates for the current fiscal year from 7.3% to 6.7%.

Since then, the ruling party has been pains to push a positive narrative on the economy,  extent of emailing clips of the speech to journalists who write about the economy.

So, what is the current state of the economy? Here’s a reality check.

How many jobs has the economy created?

Modi said: “Upto March 2014, the subscriber base of the Employees Provident Fund Organization (EPFO) stood at 3.26 crore. Over the last three years, the numbers increased to 4.8 crore. Some people forget that this number can’t increased without a corresponding increase in employment.”

Reality Check: EPFO numbers have increased, but this doesn’t necessarily mean that total employment has increased. In July this year, this jump in EPFO subscribers was attributed to a government amnesty scheme which allowed firms to come clean on their actual staff strength without being penalized. In a detailed note, Mahesh Vyas, Managing Director and CEO of the Centre for Monitoring Indian Economy (CMIE), explained why using EPFO data as a proxy for job creation is “fraught with danger.”

Referring to the jump in the subscriber base, Vyas wrote: “This is not new employment. It is merely enrollment of employed persons into EPFO.”

Continue reading Modi says the economy isn’t so bad; He’s right – it’s worse

Buying into Demonetisation- the Popular Ideological Receptors of Creeping Fascism: Sanjay Kumar

Guest Post by SANJAY KUMAR

The withdrawal of eighty six percent of currency notes by the Modi government has been an administrative fiasco. It is clear that little economic thought, and only a political urge has gone into the exercise. Informal sector of the economy, which accounts for 80% of the employment and 40% of the national output, has suffered short to medium term damage. All cash dependent transactions, wages, wholesale and retail trade, agricultural purchase and sale, are at a crawl. Workers are not getting wages, factories are closing, mandis are empty. Crores of young and old working people are spending hours in queues at banks and ATMs to withdraw their own money now gone scarce.  Press reports count more than eighty deaths. Parliament of the country is in a limbo, because the prime minister thinks it below his worth to reply to charges by the opposition party MPs. While ordinary people are suffering, the Nero like rulers are trumpeting the arrival of the nirvana of a cash less economy as the answer to India’s economic ills.

Even while Mr Modi’s government is solely responsible for this needless and widespread suffering, it would be naive to expect an automatic popular backlash against it. The politics of the ruling party does not fit into the patronage or identity driven models of its competitors. Its closest template is fascist politics, which  is a very particular kind of authoritarianism. What distinguishes a fascist regime from other modern authoritarian regimes like military dictatorships is the popular support it is able to garner for its policies and depredations. This is achieved by carefully working upon popular anxieties, prejudices, desires and fears, and refashioning them as grounds for aggression against selected minorities, and a belief in an imminent deliverance under the personalised rule of a leader. Continue reading Buying into Demonetisation- the Popular Ideological Receptors of Creeping Fascism: Sanjay Kumar