The week began with the International Monetary Fund lowering India’s GDP growth rate prospects to 4.8 percent, down from its own previous estimate of 6.1 percent, citing sharper than anticipated slowdown in demand and stress in the non-banking financial sector. The new forecast is even lower than the Reserve Bank of India’s estimate, which was pegged at 5 percent at the monetary policy committee meeting.

Facing criticism for all-round failure of the economy, the latest IMF report had the effect of rubbing salt to the wounds as the Modi government has been at a loss in finding credible explanations to justify its economic performance. It was a double whammy that this was accompanied by reports suggesting inflation was going out of control.

More embarrassment was on the way, when it was revealed that India’s corporate and income tax collection was likely to fall for the first time in two decades. The government had targeted tax collections levels of 13.5 trillion rupees, but collections till December 23 amounted to only 7.3 trillion, more than 5.5 percent lower than what was collected for the same period last year.

The dismal picture was further highlighted by remarks by RBI Governor Shaktikanta Das to the effect that the country was badly in need for structural reforms and more fiscal measures to revive consumption demand and the overall growth. He further asserted that monetary policy has its own limitations to achieve these objectives, reflecting on a tendency by the Modi government to pass the buck to the apex bank whenever faced with inconvenient issues.

The numbers were bad indeed. But the discomfiture over these figures was nothing compared to startling conclusions about its records on the political front.

The Economist’s annual Democracy Index dropped India by 10 points, down to the 51st place out of the total 165. The Economist survey may not be the best in class in terms of credibility, and the conclusions seemed to be drawn on the basis of media reporting trends, but the overall impact it created in combination with the conclusions of a few other think-tanks put the Modi government in an indefensible situation.

The timing of the Economist survey was particularly bad for the Modi government, the credibility of which has been increasingly facing question marks domestically in the wake of the nation-wide protests against the Citizenship Amendment Act and other citizenship laws.

Transparency International’s Corruption Perception Index, which came out in the same week, showed India slipping a couple of places from the previous year’s level, indicating further deterioration in the country’s sullen image as a country steeped in institutionalised corruption. The country was singled out for unfair and opaque political financing, undue influence in decision-making and lobbying by powerful corporate interest groups. The Modi government has been accused of all these by the opposition parties, which meant that the government was doubly embarrassed by the rankings.

The index was published at a time when the Modi government’s electoral bond scheme has been facing flak for perpetuating whatever tendencies the scheme was supposed to have been fighting. Details of funds collected by the BJP through the bonds showed that the scheme was being used to channelize black money into the ruling party’s kitty legally. The electoral bond scheme itself is being challenged in the Supreme Court.

The most stinging criticism of Prime Minister Modi and his government came from George Soros, the man who broke the back of British pound by betting against it in perhaps history’s most contrarian strategy and who is currently more known for his philanthropic activism.

Making his charge at the high-profile Davos Summit, where pronouncements are known to produce highly exaggerated impact, Soros accused Modi of trying to create a ‘Hindu nationalist state’. Referring to the citizenship law imbroglio and the government actions in Jammu-Kashmir, the big money man described Modi’s approach as the ‘great enemy of open societies around the world’.

The institutional value of what Soros says may not be much, but the man’s influence on global money flows by virtue of his appeal to those who control purse strings continues to be as strong as ever. It also packaged the past week as something Modi loyalists might consider as eminently forgettable. That they have not alleged a conspiracy yet does not water down the impact.(IPA Service)