It is a ‘real’ JAM for the government and the nation. Modi’s pet sloganeering around ‘development’ is being seen more as political blank fire than anything of much substance. In fact, the Modi government has not been able to release itself from the UPA-time project logjam. Over Rs. 10-lakh-crore worth projects are hanging fire since the UPA government left the office about 18 months ago. Little has been done to ensure that they took off within a reasonable time after the new government took charge in May, 2014. In addition, the freshly announced projects as 100 smart cities are yet to take off. There has been little new activity in the employment-intensive organized sectors covering core areas such as steel, coal and power, manufacturing, infrastructure, sanitation and mass housing since the government has left most of them for implementation by the private sector. And, in the government’s own admission, the private sector is still going slow in taking up investment projects. There is little progress around commercial corridors connecting Delhi and Mumbai or Chennai, Bengaluru and Mumbai. There is no new sea port or sea-linked port with big draft facility, which India needs badly, no large acquisition of ocean going vessels, no strong policy for ensuring at least 50 per cent of Indian cargo in Indian bottom, no additional airport, no new roads and no new steel plants, even old projects with Japan and Korea are not progressing.

Under the circumstances, the economic growth rate as being officially projected by the government may not provide the right picture of growth. Roughly, the agriculture, industry and services sectors contribute to the economic growth. The sum total of the growth figure divided by three provides the growth rate. Therefore, even a negative growth in manufacturing or agriculture can be overwhelmed by the services sector, which may be handling or be connected with imports or imported products. It is interesting to note that India’s services sector during the first half grew by some 22 per cent compared to the performance in the corresponding period last year. The outperformance of this sector could outshine the poor performance of both agriculture and industry in the national GDP growth rate calculation. It may not be out of place to mention that India’s export revenue is down for the 10 successive months since the end of last year. Imports are continuing to grow in volume and value, barring the cost of the energy import, led by oil, the value of almost all other items is up. The domestic prices of essential items have sky rocketed, further squeezing the pockets of the poor and the lower middle class. The rich were never happier with uncontrolled gold imports making the country the world’s No. 1 gold importer.

The growth of the economy is in a jam. India is yet to tap new coal block even after the case was out of the legal jam and the government auction. In the first seven months of the year, India imported a record 56 million tonnes of coal, breaking all previous records. The import growth is 18 per cent over the corresponding period. The oil import, which was 40 per cent lower in value in the first half of the year, continues to surge substantially. Domestic steel and other manufacturing sector producers are hurt by ‘dumping’ by other countries, led by China. Even the micro and small scale sectors, manufacturing such mundane items as earthen lamps, fireworks, candles, decorative plastic flowers, tiny decorative lamps, pots, etc., are finding tough to exist in the face of unfair competition from exporters from China.

Mobile phones, forming key to the success of JAM, are almost all imported. Industry is rotting. The private sector is not keen on expansion mainly because of its existing capacity underutilization and uncertain future. The foreign direct investment (FDI) is hardly taking place in the labour intensive manufacturing, core and infrastructure sectors. A good part of FDI, going into acquisitions of existing assets, may be hardly of immediate value.

The real economy – agriculture and industry – is under severe strain. This is obviously making BJP’s and the government’s rhetoric around development agenda unreliable. The government and BJP, now exercising power for over 17 months, is fast losing trust of the country’s youth who helped elevation of Modi and the party to the government. The results of the Bihar election and recent municipal elections in several parts of the country are probably influenced substantially by the government’s failure in the development front. EOM

Over seventeen months passed since the BJP-led NDA came to power to rule the country, the government is unable to think and talk about anything new other than JAM (Jan Dhan-Aadhaar-Mobile). If words could be a substitute for action, the current BJP-led NDA government at the centre would certainly score top marks. (IPA Service)