Thirukkural and ‘Thalinomics’

Thirukkural and ‘Thalinomics’

 of the first volume of Economic Survey 2019-20 which was tabled in Parliament on the first day of the Budget Session, in New Delhi, Friday, Jan. 31, 2020.  (Credit: PTI Photo)

The Economic Survey presents an overly optimistic picture, projecting a 6-6.5% GDP growth in 2020-21, indicating green shoots in the economy when none are visible and indeed new worries such as the potential impact of the spread of Coronavirus have to be reckoned with. Last year, Chief Economic Adviser (CEA) KV Subramanian had projected 7% growth in 2019-20. It is now expected to be 5%. The Survey articulated the Centre’s economic philosophy, calling for ‘ethical wealth creation’ as against scam-ridden businesses, complete with quotes from Kautilya’s Arthashastra and Thirukkural. There was the promise, or prescription, of ‘pro-business’ policy and building trust. There were action points for Finance Minister Nirmala Sitharaman’s Budget on Saturday — aggressive privatization and disinvestment in PSUs, labour intensive exports, moving up the manufacturing value chain. Subramanian mooted the Singapore model of floating a holding company to park the government’s stake in PSUs. He held up the Bengaluru airport as an example for other airports and ports to follow in removing hurdles to exports and imports for India to achieve an 8% share in world trade.

The Survey paid the mandatory obeisance to Prime Minister Narendra Modi’s “$5 trillion economy,” with just the date for achieving it starting to fade away into the future. In the process, it projected creation of 40 million well-paid jobs by then, doubling the number to 80 million by 2030. Skilfully, it avoided putting a figure to the number of jobs created, or lost, by the Modi government in the last six years. However, the government did reluctantly admit to job losses in 2018-19 and 2019-20. Absent a roadmap from here to 2030, the new jobs projection could remain a pipedream. Neither did the Survey address squarely the questions on over-estimation of growth by about 2.7%, as pointed out by eminent economists, including those who were in government before Subramanian, except to cite mis-estimation of growth numbers in other countries to justify possible errors in India’s numbers.

Most curious is the chapter on ‘Thalinomics’, Subramanian’s coinage for a study that portrays the economy working for the common man. Citing a massive survey conducted in 80 centres, Subramanian claimed that the cost of food per family had fallen steeply in the last four years. An average vegetable thali became affordable by 18% while a non-vegetarian thali became cheaper by 22%, as per the study. The estimated savings on food per family of five members – between Rs 10,887 and Rs 12,000 per year. Astonishingly, the Survey bets big on the rural economy and agriculture — banking on easy credit, insurance cover and the promise of better prices and eliminating middlemen — to revive consumption.

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