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Ashoka Mody Writes: The Budget’s Sound and Fury

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Pundits yell their views on television. Analysts dissect incomprehensible statistics. Others torture the data to reconcile fake GDP growth numbers with joblessness alongside anaemic consumption and private investment. They wonder why foreign investors are turning away when the GDP is growing so rapidly. Excitement ebbs, and a vigil begins for the next Budget.

I remain strangely detached from the Budget’s sound and fury. Alas, if calm dispassion were so easy, I would be a jivanmukt by now. I believe the explanation for my curious behaviour lies in my Swamiji’s question: aapki drishti kahan hai (where is your gaze)? If your drishti is on the country’s policy direction, the Budget—despite its pretence—is not the place to look.

Even the July 1991 Budget is famous mainly for Manmohan Singh’s paraphrasing of Victor Hugo: India was an idea whose time had come. The key trade policy decisions were taken earlier in June, and industrial policy deregulation occurred in a separate parliamentary vote on Budget day. The February 1992 Budget coincided with a stock market bull run: while analysts scoured the Budget documents to find a correlation, the Reserve Bank was asleep even as Harshad Mehta stole from banks to pump up the stock market.

My drishti is on three policy areas that will determine if India coheres as a society. The Budget skims them, typically to perpetuate their bleak history. I present three exhibits.

Exhibit 1: Anant Ambani’s wedding

Put aside the vulgarity, and focus on the chronology. First came the $120-million pre-wedding bash at Jamnagar. Indian authorities upgraded Jamnagar airport to receive international flights for weary travellers arriving in private jets. Yes, Jamnagar is where dad Mukesh processes imported Russian oil—stepped up since the Ukraine war began in 2022—to export petrochemicals to countries that cannot buy directly from Russia. No, Indian foreign policy is likely not set in Jamnagar. The coincidence, though, is impressive.

The 29-year-old Anant then attended Prime Minister Modi’s third swearing-in. The Prime Minister reciprocated by attending the young man’s wedding. What gifts did he bring for the new couple?

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We can trace Anant’s star back to his grandad, Dhirubhai. Rajiv Gandhi, elected as Mr. Clean, distanced himself at first from Indian business. In pursuit of that image of cleanliness, Rajiv’s Finance Minister V.P. Singh prosecuted many tycoons of the day—Dhirubhai particularly aggressively—for financial and regulatory misdeeds. That could not last in the environment of broken norms. Rajiv became buddies with Dhirubhai, turning policies in his favour. To mark his soaring fortune, Dhirubhai moved into Sea Wind, the multi-storied building housing the Ambani family on Cuffe Parade, a precursor to Mukesh’s grotesque Antilla on Altamount Road.

The story goes further back. After Indira Gandhi roared back as Prime Minister in January 1980, Dhirubhai hosted a reception for her at Ashoka Hotel. They sat together for two hours, receiving—as if in joint celebration—the parade of guests. Sanjay Gandhi nearly gutted Nusli Wadia to favour Dhirubhai.

Read Hamish McDonald’s biography of the Ambani family, not Budget documents, to understand the unceasing increase in Indian income and wealth inequality. True, the Budget gives glimpses. India’s rich bear low rates of direct taxation; on the other hand, heavy reliance on indirect taxes, which fall on consumption, reduces even the meagre purchasing power of the weak and vulnerable. Recently, in place of reduced corporate tax rates (benefiting rich company owners), increased reliance on personal income taxes has cast a wider net.

The Ambanis fatten the high end of Indian income and wealth distributions. Systemic neglect of education—the cornerstone of opportunity—hurts those at the spectrum’s other end.

Exhibit 2: The evisceration of Delhi University

Delhi University’s decline, described poignantly by the historian Mukul Kesavan, offers a preview of the fate that awaits Indian education. India’s public universities are trending towards the shambolic future we see in Allahabad University, once the Oxford of the East. Besides a few elite colleges with limited intake capacity, the vast majority suffer from the fundamental problem that their students learn so little in school.

Stanford University’s Erik Hanushek estimates that only about 15 per cent of Indian schoolchildren have the basic reading and arithmetic abilities to participate in the global economy. Ill-prepared students enrol in colleges to receive certificates while they prepare at “coaching classes” for competitive government jobs. Meanwhile, administrators run universities as personal fiefdoms, the quality and number of instructors and professors remains severely deficient, and syllabuses prioritise Hindu nationalism over preparing students for the global marketplace.

And on this central development task of education, what does the Budget offer? Skilling schemes. No, you cannot skill an uneducated person. Schools are the bedrock of functional societies. They develop not just cognitive skills (reading and arithmetic) but also non-cognitive skills (social interaction, trust among peers, and professional ethic). India wants to reinvent the history of economic development by substituting “skilling schemes” for education.

“The Budget ducks its grave moral failure by talking of a high-minded green transition but not about wanton environmental damage or adaptation to the galloping effects of global warming.”

Occasionally, a flicker of understanding arises that even low-tech, labour-intensive production requires essential education for technical and professional literacy. Spokespersons for labour-intensive manufacturers are clamouring for more visas for Chinese supervisors and technicians, who can help overcome the productivity handicap caused by low industrial literacy. Of course, national security considerations and fanciful notions of Atmanirbhar Bharat prevent the infusion of expertise that no skilling scheme can impart.

A dirty little secret is that India cannot hope to provide the hundreds of millions of jobs that its young population desperately needs—now and for decades ahead—without exports of labour-intensive manufactured products. The Budget will not tell you that. Nor will it tell you that India needs a sharply weaker rupee to compensate for the low productivity and a huge boost in education quality to raise and sustain productivity growth.

The policy elite are uninterested in upgrading Indian education. Rich Indians, as Kesavan laments, have “seceded”. They send their children to exclusive high schools in India and universities abroad. Young Anant went to Brown University and his bride to New York University. When rich Indians secede from domestic education, they no longer speak for change and a better future for all.

Education has long been India’s Achilles heel, and today, it is crumbling. Looming environmental catastrophes will drive stakes through the country’s heart, delivering more blows to the weak, vulnerable, and voiceless.

Exhibit 3: Joshimath is sinking

What, you will ask, does Joshimath have to do with anything? A lot: it illustrates disdain for environmental destruction, which amplifies the increasingly dire effects of global warming.

Nestled in the Himalayas, Joshimath has been sinking for over half a century. Successive governments have hoped that the problem will go away. All the while, their so-called development projects—dams and roads—constructed against scientific advice, have made the town more vulnerable. The latest culprit is the Char Dham road project, connecting four Himalayan pilgrimage sites. As the scientists had warned, landslides have increased. Melting glaciers will make the problem worse. Joshimath’s residents will continue to suffer helplessly.

The three kids who drowned in a Delhi coaching class were of the same age as Anant and his bride. They were in the basement rooms when a downpour flooded and clogged the streets. The water flowed into the basement, trapping them in the death’s arms. Every Indian city has closed its drainage systems by building over its water bodies or dumping debris into them. Even glitzy Bengaluru floods when the rain comes down heavily. More heavy rainfall events—a signature of global warming—will interact viciously with pre-existing environmental damage.

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The nation’s broken conscience is on display. From Hasdeo in Chhattisgarh to the Western Ghats, pristine forests are being mowed down; from the Yamuna outside Delhi, to the Musi running through Hyderabad, and the Noyyal outside Tiruppur, rivers froth with dumped chemicals; from Kerala to Tamil Nadu, construction erodes the beaches. Meanwhile, air pollution together with reduced forest cover—encouraged by lax regulations—makes heatwaves worse. Rising sea levels destroy more coastline.

The Budget ducks this grave moral failure. It talks of a high-minded green transition but not about wanton environmental damage or adaptation to the galloping effects of global warming.

Some readers might protest that the Budget is not about matching GDP with reality. It is not about the nexus of wealth and power, or education pathologies, environmental destruction, and climate change. It is not a moral charter through which society reins in hyper-individuality to build a collective ethic in pursuit of the common good. If so, I can stay happily detached. Whatever else the Budget does, as Rhett Butler said in Gone With the Wind: “Frankly, my dear, I don’t give a damn.”

Ashoka Mody recently retired from Princeton University. He previously worked for the World Bank and the International Monetary Fund. He is the author of India is Broken: A People Betrayed, Independence to Today (2023).

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