The first is the sky-rocketing prices of petrol and diesel that the common man uses almost on a daily basis. When the present government assumed office in May 2014, the price of petroleum crude in the international market was around US $105. The government was lucky and reaped a huge bonanza all these years because crude prices declined to as low as $26 per barrel and stayed below $30 per barrel for many months after it assumed office. In the course of time, prices started going up again and today may have reached around $73/75 per barrel. Earlier, when prices were climbing up, the burden was distributed three ways among the government which reduced its taxes, oil companies which assumed a part of the financial burden and the consumer who paid a higher price. By the same logic, when international oil prices declined, the benefit should have been shared equally among the three stakeholders. But the government was greedy and kept all the profit for itself. The consumer was left high and dry and continued to pay higher prices for petrol and diesel even when international prices had crashed.
On the other hand, the government was raising taxes and mopping up the entire benefit for itself. Again, when the prices have started going up, the government has allowed the oil companies to raise prices at the cost of the consumer. The recent depreciation of the rupee is another reason for the hike in petrol and diesel prices with the result that they have touched an all-time high. The Finance Secretary has already announced that the government would not reduce its taxes any time soon. Now, the prices are being revised on a daily basis so that the consumer does not feel the pinch. The government’s approach is clearly based on the principle–heads I win, tails you lose.
The other news which would have surely rattled many people is about counterfeit currency. It was claimed by no less a person than the Prime Minister himself that demonetization would break the back of the counterfeiters and there would be no fake currency in future. But according to a report prepared by the Financial Intelligence Unit of the government, the number of times fake notes have been deposited in banks has gone up to 7.33 lakh in 2016-17 compared to 4.10 lakh times in 2015-16. Obviously, the counterfeiters are one step ahead of the government at all times.
Similarly, banking frauds have nearly tripled in the last five years, the amount involved in these frauds rising from around 10,000 crores in 2013-14 to over 28,000 crores in 2017-18. The total amount involved in these frauds has crossed 90,000 crores during the last four years.
According to another report, the declining number of operators in every telecom circle in the country has led to large-scale job losses. The number of operators per circle has come down from an average of around 10 operators about a year and a half ago to only about six today. According to a report prepared by recruitment firm CIEL HR, some 80,000- 90,000 jobs could be lost as a result of this development. In the meanwhile, the government is bending over backwards to prove that new job opportunities are increasing at a fast pace and using the data available with the Employees Provident Fund Organization to prove its point. Many economists have challenged this claim of the government and have asserted that EPFO data is not employment data. It only represents formalization of those who are already in jobs by their registration under EPFO. But who can prevent the government from telling pure lies?
The government had appointed a task force led by the then NITI Ayog Vice Chairman Arvind Panagariya in May 2017 to suggest ways to improve employment data. This panel had pointed out the serious limitation in measuring job creation based on data from EPFO, ESIC and PFRDA. According to the panel, additions to the data collected by these three agencies need not represent creation of new jobs. They can only be used to measure the extent of formalization in the work force. To illustrate the point, it mentioned that companies which employed 20 workers or more were required to make provident fund contributions under the EPFO. Thus, if a firm had 19 workers, it would not be required to make contributions to the EPFO. But the moment the firm employed one more worker and the number went up from 19 to 20, it would have to enroll under EPFO and begin to contribute to it for all its 20 employees. Thus, the addition of only one employee will lead to the formalization of the 19 earlier employees. It will be a serious error therefore to count these 19 employees as fresh recruits. Earlier, it was the Labour Bureau which through its quarterly household surveys gave out data of fresh employment, but since this did not present a flattering picture of employment generation, the government is planning to ask the Labour Bureau not to bother about collecting new job creation statistics, so that it may fully depend on the misleading EPFO data for this purpose. Its policy is- shoot the messenger if he does not bring happy tidings. This is an example of the good governance of this government!
Another example of good governance for any government is presenting time and cost overruns of important infrastructural projects. Every government in the past has wrestled with this problem but not with much success. But is not the Modi government different from all the past governments? Is it not more efficient than all of them? Then why is it that, according to a report put out by the ministry of statistics and program implementation, the cost overrun in 356 large infrastructure projects is to the extent of 2.19 lakh crore? 258 projects, out of these 356, have also suffered from time overruns.
We criticized the UPA government for time and cost overruns of the projects under execution then because this is also one of the major contributory factors for bank NPAs. Obviously, the picture has not changed dramatically after the advent of the Modi government and it is business as usual.
In the meanwhile, there is some reassuring (?) news on the non-economic front. Navinder Gupta, the newly-appointed BJP deputy chief minister of Jammu and Kashmir, has described the rape and murder of the Kathua 8-year-old girl as “a chotti si baat” (a minor issue). The BJP has also appointed Rajeev Jasrotia, its MLA from Kathua who was largely responsible for the public protests in favour of the alleged rapists, as its new minister in that state.
(Yashwant Sinha is a former Union Minister of External Affairs.)