Monday, 30 November 2020

Economy Further Plunges UPA Recalcitrant

Updated: December 24, 2011 11:45 am

One day the markets are zooming with good news flashing around, the next day the world is falling flat. However, for the first time in quite a while even optimists have hopped on the doomsday bandwagon. At a time when the Parliament was literally frozen over the issue of the Opposition to 51 per cent FDI in retail, the official GDP data for the second quarter of this fiscal year (July-September 2011) painted a gloomy picture of the economic slowdown more vividly than they did in the previous quarter. The Central Statistics Office (CSO) data, pegging second quarter growth at 6.9 per cent, the lowest in the last two years, and sharply lower than the previous quarter’s 7.7 per cent, sends shivers down the spine of a commoner. The latest disappointing reading is attributable to high local borrowing costs and inertia on part of the government. What is perturbing is the fact that market experts are claiming that this slowdown would continue in the next quarters due to the same reasons. The deceleration in economic activity has been in evidence for quite some time now and seen across many sectors. Forecasters, both official and private, have been consistently revising downwards their projections for the year. It is worth mentioning some instances: During the quarter ended September 30, growth in the manufacturing sector tumbled to 2.7 per cent from 7.8 per cent in the same period last year. Farm output increased 3.2 per cent compared to 5.4 per cent growth in the corresponding period last fiscal. Production at factories, mines and utilities grew 1.9 per cent from a year earlier in September, lower than an onward revised 3.6 per cent growth a month ago. Further, growth in eight core infrastructure industries dipped to 0.1 per cent in October, the lowest in five years. Meanwhile, the Reserve Bank of India has also failed to support the economy as it struggles with inflation. Consequently, the RBI has hiked interest rates at least 13 times since March 2010 to tame demand and curb inflation. In fact, the economy is struggling under the weight of higher interest rates but this had failed to achieve the objective of cooling inflation, which has been hovering around 10-12 per cent mark since December 2010.

Ironically, when inflation is high, the growth rate is plummeting, the rupee is sinking at its lowest-ever level, new manufacturing output data are showing a much higher than expected slowdown in recent months, and the Indian economy, once seen as largely insulated from global financial woes, is not proving so robust, MPs, instead of debating issues on their merits, seem to be pandering to their particular vote-banks by disrupting the proceedings of the Parliament. It is noteworthy that in a parliamentary democracy, fruitful debate on the floor of the House can expose inactivity, lassitude or duplicity of a government department or identify the flip side of governmental action. Against this backdrop, it is quite disheartening to note that the present Lok Sabha appears to be the most disrupted in 25 years. According to a study conducted by PKS legislative research, in the 15th Lok Sabha many a bill was debated for less than five minutes. It is noteworthy that in the winter session of Parliament, which began on November 22, the Lok Sabha had to meet for 54 hours till December 2, 2011, but it used only three hours! The Rajya Sabha also did not lag behind, as it used merely two hours out of the allotted 45 hours within the same time frame. It is worth mentioning that the exchequer bears the burden of Rs 25 lakh for every disrupted hour! So taking into account six hours and five hours to be the normal working hours for the Lok Sabha and the Rajya Sabha respectively, disruption has bled the exchequer to a whopping sum of Rs 12 crore. In fact, the government’s accountability is ensured through a variety of parliamentary procedures, and healthy debate is one of the most effective instruments at the hands of the MPs to ensure a continuous assessment of the government. Parliament may not be functioning and its members may not be working, but, interestingly, just before the House adjourned the other day, the Privileges Committee managed to table its recommendations. And they all go towards increasing the status of the Members of Parliament. The panel recommends that the government issues fresh notifications, which are: Red light beacons should be allowed across the country on the MPs’ cars. MPs’ importance in the government list of VIPs should go from number 21 to no 17. If MPs are placed at number 17 of the Warrant of Precedence, they will be on a par with Chief Justices of High Courts and Chairpersons of CAT, Minorities Commission, National Commission for Scheduled Castes and National Commission of Scheduled Tribes, besides Judges of High Courts. At number 17, the MPs will be placed above Cabinet ministers of state governments who are placed at number 18. So, it seems that this session of Parliament is cutting out no shape to make things better. Rather there are multiple political theatrics playing out at once.

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