{"id":7638,"date":"2015-11-14T08:57:48","date_gmt":"2015-11-14T08:57:48","guid":{"rendered":"http:\/\/indialegalonline.com\/?p=7638"},"modified":"2015-11-14T08:57:48","modified_gmt":"2015-11-14T08:57:48","slug":"namos-freakonomics","status":"publish","type":"post","link":"https:\/\/www.indialegallive.com\/cover-story-articles\/lead-updates\/namos-freakonomics\/","title":{"rendered":"NAMO\u2019s Freakonomics"},"content":{"rendered":"
Rural India has been off the policy radar since the NDA came to power. Will this change in the aftermath of the Bihar verdict? Or will inclusive growth remain just a politically convenient slogan? <\/span><\/p>\n By Ajith Pillai<\/span><\/p>\n Two days before the results of the Bihar assembly elections left the government shell-shocked, the prime minister spoke a truism that we all know\u2014if growth is not inclusive, it is no growth at all. In fact, in what can best be described as a politically correct speech, Narendra Modi spoke of safety nets through social security schemes, he waxed eloquent about empowering the poor and stressed the need to take economic reforms to the villages. He concluded by saying that \u201cthe goal of reforms is not better headlines in the pink papers, but better lives for our people\u201d. <\/span><\/p>\n Well said, you would say. But three days after the PM\u2019s reassuring speech comes the news that the government has put a ceiling of 60 percent on central funding to 17 social welfare programs, including the Sarva Shiksha Abhiyan and the Mid-Day Meal Scheme. This move is likely to adversely hit and limit these schemes. It comes against the backdrop of 50 percent cuts announced in this year\u2019s budget to 15 central agricultural schemes such as the Rashtriya Krishi Vikas Yojana and the National Mission for Sustainable Agriculture. Remember, funds were also slashed by `9,278 crore for programs under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).<\/span><\/p>\n DIFFERENT VOICES<\/span> <\/span> While the PM says he is not chasing GDP highs or kudos from the pink papers, his finance ministry seems to be wallowing in praise from the press and gloats about the high (often suspect) rankings given to India by international rating agencies. While Modi speaks of taking \u201cvikas\u201d to the villages, his government sees the farmer as a subsidy guzzling creature who does not require any further policy indulgence. In fact, rural development is, for all practical purposes, a politically profitable promise during poll time. <\/span><\/p>\n Vikas or development is a much-abused term. It is a refrain that one hears whenever politicians speak. But who is this vikas for? Is it as inclusive as the PM claims it is? The state of the rural economy certainly does not reflect this. Five states\u2014Madhya Pradesh, Maharashtra, Karnataka, Andhra Pradesh and Odisha\u2014have been hit by drought. Sowing for the rabi season has also been affected. Food inflation\u2014particularly the prices of pulses\u2014has severely strained family budgets in urban and rural India. Spending power has thus been hit, which in turn, has impacted the overall economy.<\/span><\/p>\n NO GROWTH<\/span>
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\nTherein lies the rub. Modi promises several things from the public platform, while his government delivers differently on every count. It seems to be working on a different plane and on an agenda that is far removed from the one articulated by the PM. That is Freakonomics for you, Modi style.<\/span><\/p>\n
\nScan the reportage in economic papers in recent months and a rather grim picture emerges. Tractor sales have reportedly fallen by as much as 20 percent in the first six months of the year. The demand for motorcycles is down by four percent during April-October. In the quarter ending September, sales of consumer goods (read toothpaste, soaps, shampoo, creams, etc) fell despite manufacturers slashing prices to generate demand. Some economists partly attribute this depressed buying power to budgetary cuts in rural employment schemes in a drought year. <\/span><\/p>\n