Congress Plenary 2018: A new model to get over last four year’s trauma, says Kapil Sibal

Cavalier decisions like demonetisation and GST, coupled with ill-conceived propaganda over 2G spectrum and coalmine allocation, have led to the banking crisis and a faltering economy

Hindustan Times via Getty Images
Hindustan Times via Getty Images

Kapil Sibal

This plenary session of the Congress party is historic in many senses. Rahul Gandhi as president of the Congress party will have to steer it forward in the years to come. He will have to provide a new direction with a new vision and galvanise the party to meet the challenges that confront it. The Congress party under his leadership must prepare itself for the upcoming 2019 Lok Sabha elections.

In the last Lok Sabha elections, the electoral results were very disappointing. The Congress party was reduced to only 44 seats and ever since, its presence in various states has been diminishing.

At the same time, the last four years have been traumatic for India in every sense. We have a Prime Minister who has diminished the idea of India. Our pluralistic culture has been severely damaged, our institutions have been captured by an ideology that is anachronistic. Even the judiciary is under threat. Institutions which never involved themselves in politics, mainly the office of the Governor, have been manned by RSS pracharaks. The office of Governor has been used time and again to destabilise and delegitimise elected governments.

Educational intuitions have been brought under the leadership of people nominated by the government who belong to a particular mindset. The move to appoint those affiliated with Sangh Parivar to various institutions of higher learning including the IITs is an attempt to push for cultural intervention in every sphere of governance. Vice Chancellors in universities and publicly funded institutions like Indian Council for Historical Research (ICHR), Indian Council for Cultural Relations (ICCR), Indian Council for Social Sciences Research (ICSSR) are being controlled by men who are committed to the cause of RSS or are sympathetic to it. The most worrisome aspect is the capitulation of a large section of electronic and print media to the diktat of this government.

An army of social media professionals, whose sole objective is to tarnish the Congress party’s image and denigrate our leadership by spreading falsehoods by the way of fake news, has been put into service on social media platforms.

Above all, this government has spread fear in the minds of the people. Investigative and enforcement agencies like the NIA, CBI, the ED as well as income tax authorities are being selectively used to target individuals, particularly those belonging to the Opposition. Many leaders of the Congress party have been targeted with the objective of tarnishing their image in the eyes of the public. While the government is doing all this, peoples’ woes are accumulating.

The recent march of over 40,000 farmers in Maharashtra clamouring for justice is symptomatic of the misery of the farming community. Narendra Modi, while he was aspiring to be the Prime Minister, promised farmers that he would ensure that they would get cost plus 50 percent as remuneration for their produce. But that was soon forgotten. In fact, Modi went back on his pre-poll promise and in an affidavit to Supreme Court in February 2015, the NDA said that such an increase would have adverse impact on the market. The 2018 Union Budget is no different. The Finance Minister’s proposal to increase MSP by 50% above input cost lacks clarity. It is apparent that this government is again misleading people by not defining what the input cost is and ignoring the cost of capital and imputed rent of land in its calculations. The Budget has failed to provide any succor to the rural economy.

The Long March & farmers

The alacrity with which Chief Minister Fadnavis has accepted the demands of the farmers is only to ward off the challenge. It is to be seen whether the promises made to the farmers of Maharashtra in writing are fulfilled. It is one thing to accept the demand of the farmers for loan waiver but the real challenge that confronts the farming community is the debt which they owe to private money lenders, which are not covered by the loan waiver commitment. According to Maharashtra’s Economic Survey, there was a 28.7 percent rise in loans given out by registered private lenders in 2016-17 as compared to 2015-16. This agreement is thus a temporary arrangement and there are many important issues that need to be addressed if the farmers are to get a fair compensation for their produce.

It is all very well to agree to implement the Forest Rights Act for Adivasis and give them rights over forest land by conferring ownership on such land. How and when this will be accomplished, is again a question at large.

Almost four years have passed and Narendra Modi government has failed to keep the commitments made to the farmers. The farming community not only in Maharashtra but also in many other parts of the country, like Rajasthan and Madhya Pradesh, are disenchanted with this government. Rahul Gandhi must give a clarion call to galvanise the farming community. The Congress party must commit itself to address not only issues that confront farmers but also make sure that outlays in the budget are geared towards boosting agricultural growth, when it comes to power.

Time for a new model

While loan waivers may give temporary reprieve to farmers, that by itself is not an answer to their woes. What is needed is increased level of productivity. It is important to recognise that two-thirds of farmers in India are marginal farmers with land holding of less than 2 hectares. There are no surpluses available to the farming community in the context of their land holdings. Therefore, the time has come to devise a new model of agriculture production through which our farmers receive not just cost plus 50 per cent but have the capacity to increase levels of production, generate surpluses that fuel the rural economy.

Propaganda over 2G and coal have cost banks dearly

We have seen in the recent past the Nirav Modi scam and how LOUs (letters of undertaking) were issued to companies resulting into defaults in payment to the banks. This is an excellent example of crony capitalism, against which when in opposition, the BJP cried hoarse. How is it that Nirav Modi was allowed to escape the long arms of the law is yet to be explained by this government. The NPAs resulting from loans given by banks without adequate collateral has brought the entire banking system into disrepute.

Recapitalisation of banks cannot be the answer. Restructuring the banking institutions and ensuring accountability of banks in disbursing loans needs to be addressed seriously. It is not understood how Punjab National Bank got into this mess despite the fact that a nominee of the Finance Ministry was on the board of the bank. He must have been aware of what was happening and in that context the Finance Ministry must have known about the transactions taking place. It is time that accountability is fixed.

The Non-Performing Assets (NPAs) of the banks is also the result of the irresponsible politics of the BJP when they were in opposition. The presumptive loss figures of Rs. 1.76 lakh crore as estimated by the CAG, was made an election slogan as UPA government did not auction 2G spectrum. The BJP in opposition clamoured for auction of the spectrum. The result was the subsequent bands of spectrum were auctioned. The resultant price paid by telecom companies was so exorbitant that they could not repay the banks because the revenues from the sector were not enough to service the loans.

Over and above that, the cancellation of 2G licenses by the Supreme Court contributed hugely to the NPAs. This was brought about by the irresponsible conduct of the BJP when in opposition. Today, this government is realising the crisis in the telecom sector—which has an accumulated debt of over Rs 5 lakh crores. It has decided to give some reprieve to the telecom companies by relaxing repayment schedules. It is because of the irresponsible opposition of the BJP that has brought the economy to such a sorry passé.

The CAG’s report once again, in the context of presumptive loss in the coal sector which was made out to be 2 lakh crores, resulted in the SC cancelling all allocation of coal. This again resulted in default by companies who had been allocated coal blocks and who had borrowed money from the banks for their business enterprises. Today, the result is that very few coal blocks are being auctioned because the private sector is not in a position to pay the exorbitant prices for the coal auctions. And where the coal auctions are happening, the companies are dishonouring the bids and are even willing to forgo the security deposits.

Why do we have surplus power?

This is a country where industry is hungry for power and yet we have surplus power. The only conclusion possible is that there is not enough demand in the market for power, consumption of which is fundamental to economic progress. It will take years to turn around this economy towards a growth path.

The decision of this government to demonetise Rs 500 and Rs 1000 denomination notes was taken without circumspection. It was a decision that Prime Minister Modi took without realising its consequences for the people at the bottom of the pyramid.

Modi should have realised that all cash is not illegal. In a country where 800-900 million people earn less than Rs 10,000 per month, freezing cash in their hands resulted in untold misery. Over 100 people died waiting in queues to withdraw the limited amounts they were entitled to according to the diktat of the government. Businesses stopped. There was no cash in hand. Patients died in hospitals. Small scale industry was battered.

The consequences of this ill-conceived decision was reflected in downturn of the economy. The reasons given were spurious. Cash is back in the system in volumes more than what existed when the decision of demonetisation was taken. Fake currency is still in circulation. Terrorism continues. So, what was achieved, except miseries for the common man? Similarly, the multi-layered GST has impacted business negatively. It will take some time before NDA realises that the GST conceived by the UPA was the only way forward.

Economy & inequality

In the last one year, 73 percent of wealth generated in the country fell into the hands of 1 percent of our population. This government, therefore, clearly is for the rich and has done very little for the poor.

Because of several reasons including demonetisation, our export performance has been dismal. During UPA, exports were galloping at the rate of over 18 percent per annum. Today, they are stagnant as the rate of growth is minimal. In the context of the crisis in the economy, banks are not willing to lend any more. Indian businesses are investing abroad. There is no credit offtake because of poor demand.

Unless our GDP growth reaches double digits, India will never become a power to reckon with. Whenever the NDA has come to power, the country’s economic performance has been abysmal. The country has always prospered when the Congress party has been at the helm of affairs. Economic prosperity can only come about in an environment of peace and tranquillity.

Narendra Modi is dividing the country for political dividends. He doesn’t realise that political dividends don’t necessarily result in economic prosperity. The Congress has always taken along with it all sections of society. It is time for people, cutting across all sections, to come together and install in 2019, a government that cares for them. A government that will bring prosperity to their homes. The present nightmare must get over. The sun must shine again!

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Published: 17 Mar 2018, 12:17 PM