Just the other day an eighty-year-old senior citizen died while walking from the aircraft to the terminal building at the Mumbai Airport. At eighty, the passenger was, no doubt, vulnerable. But what matters was that it could have been avoided if we, as a society, were slightly more sensitive in a world that is home to more older people. The airline, in this case Air India, was subsequently slapped with a fine of Rupees Thirty Lakhs. These are just mundane facts in one of the busiest airports in the country and the concerned passenger also have become part of statistical records of the airport and the airline. The death of the passenger and the subsequent developments raises some disquieting questions. Apparently, the passenger had asked for a wheelchair that was not available at the airport. The one wheelchair that he could manage to get when he landed at Mumbai, he offered to his wife who was also a senior citizen. It is also a fact that even passengers who are physically able to walk prefer to use a wheelchair duly assisted by an usher to conveniently negotiate the crowds at the airport. This in turn creates an avoidable shortage of wheelchairs. Even in the midst of this tragedy, let me applaud the chivalry displayed by the old man in offering the one chair that he had to his wife and preferring to walk. The DGCA, the regulator concerned, promptly imposed a fine of Rs 30 lakhs on the airline. The apparent reasons for such a penal action were that the airline did not act against the concerned employee and for failing to inform the regulator of how it would deal with such dire emergencies. I feel that the prompt (was it hurried?) action on the part of DGCA appears to be an action to push the sad episode away from the front pages of the newspaper columns. Which airline would want such morbid news circulating in the news feed? The point I make is that the penalty must be against the airline for not making available wheelchairs on landing irrespective of whether an intimation for one had been given to the airline or not. The penal action irrespective of the amount of penalty should be imposed on the airline concerned. It is a well-established legal dictum that the principal agency (the airline in this case) must carry the burden of constructive liability for such an untoward incident. This principle is enshrined in other laws governing, say for instance labour or mining, to cite a few examples. A man dying the way he did, and you take punitive action for nonperformance of some mundane administrative staff is a travesty to say the least. Sometimes you also wonder if Air India, despite the famed Tatas at the helm is still the dodgy and insensitive public sector behemoth that it had been. It takes time for the corporate culture to evolve in the changed circumstances. One hopes that it happens sooner than later.
India signed a long-term contract of twenty years for purchase of Liquified Natural Gas (LNG) from Quarter the other day. Eight condemned Indian nationals who were charged with spying were also released thereafter. Were this part of a quid pro quo deal, is something that we will never know. That is the basic principle of international diplomacy. The eight Indian nationals were imprisoned in Qatar since October 2022 and were accused of spying on a submarine programme. It is also rumored that the Indians were selling secrets of Qatari nuclear submarine programme to Israel. Once the accused Indians were released, the Indian Prime Minister visited Quatar to personally thank the Emir. It was an important diplomatic victory for India having succeeded in its negotiations to save the Indians from certain death. Quatar is the richest country in the world. They have Saudi Arabia and UAE as their neighbours. This tiny country with its enormous natural resources under their feet, has always managed to punch above their waist. Al Jazeera, the influential 24-hour news channel is owned by the Qatari Emirati. For historical reasons both India and Quatar have always looked at each other through the prism of Pakistan. All that appears to have changed. No wonder the Indian PM decided to personally go over to meet the Emir and thank him. That takes us to the subject of LNG. LNG is the best transitory fuel before finally eliminating carbon emissions. Moreover, LNG has only 40% of carbon content of coal. The new contract signed between India and Quatar is for a period of twenty long years. According to S&P Global Commodity Insights “For India, an extension of LNG supply contracts with Qatar will highlight its long-term LNG procurement strategy as the industry has changed significantly ever since the initial deals were signed with new suppliers like the US and Australia have gained significant market share and India’s own economic profile and outlook has evolved.” There is yet another sweetener in the deal. India will save more than it incurs on shipping as Qatar has agreed to convert the deal to Delivered Ex Ship (DES) from Free on Board (FOB) thereby undertaking the responsibility of shipping. Moreover, the new deal will allow the Indian buyers to decide which terminal in India will receive cargos. The freedom to decide on the arrival terminal will save on pipeline transportation costs within India”. In the end, you start wondering if diplomacy and commerce are two sides of the same coin!
The Government of India presented a White Paper on the economy of the country in the last session of the Parliament before the elections. Unfortunately for the politicians of the ruling party and the mandarins in the North Block it turned out to be a damp squib. The government’s intentions were clear – they wanted to compare their performance of the last ten years with that of the previous ten years under Dr Manmohan Singh, the architect of India’s famed financial liberalisation in 1991. This white paper was an information document issued by the government to highlight its performance compared to its predecessor. The Opposition on its part tried to steal the thunder from the government by presenting a Black Paper just before the White Paper. Except for some rhetorical flourishes it did nothing to enhance the understanding of the economy from the point of view of those who are opposed to the government initiatives. The Black Paper, however, highlights the government’s alleged “economic blunders” such as demonetisation, the flawed GST implementation, the unemployment situation with stagnant wage growth, farmers’ distress and high inflation despite crude oil prices being lower than under the UPA regime. The White Paper covers the period of ten years under the present government from 2004 to 2014 when the BJP was in power. As can be expected the White Paper on the economy is more in the nature of a collection of political statements of achievements of the BJP to serve as talking points during the impending election campaign. On the economic front the most consequential development during the period was demonetization of the high value of currency notes. The White Paper deals with this subject by ignoring this issue altogether.
According to the White Paper the previous government had left the economy “deeply damaged”. To separate the grain from the chaff you need the expertise of an economist. Accordingly, I turn to Professor Arun Kumar, the economist, to understand the subject better. In his opinion, not all statements in the White Paper would stand scrutiny. I reproduce some of his comments duly paraphrased:
- Prices had gone up and so were the incomes during the UPA period. For him the impact of the increase in costs would have been more had the income not risen commensurately. He also questions the claim made in the Paper with facts and figures that the fiscal deficit had gone up only during the tenure of the UPA period.
- Fiscal Deficits were required to be increased in line with other economies because of the necessity arising during the period of both UPA and NDA to prevent the economy from going into recession. In fact, this deficit was as low as 3% during the UPA period in line with the FRBM norms. Comparing both the periods, his take is that fiscal management was better during the UPA period.
- The borrowing from the market was high under both the regimes. The statement that the borrowings earlier were heavy and now they are down, is not born out of facts available. He feels that crony capitalism is on the rise. Otherwise, the ratio of direct taxes to GDP rising as a result.
- Cronyism was there during the UPA period leading to lack of due diligence while granting loans especially in the infrastructure sector. There is not much to choose between the NDA period and the UPA period in this respect.
- As regards reforms are concerned the report card is also the same when it comes to disinvestment of public sector units, land and labour. Taxation reforms like GST led to huge pain and loss to the unorganized sector under NDA. He feels GST reform ended up damaging the economy.
- Investments in the economy peaked around 2008 going up to 36% before going down. Even the reductions of tax rates in the corporate sector have not helped in increasing investments. According to him the investment climate now leaves much to be desired. A large number of ultra net worth individuals are migrating abroad and that is a worrying trend in this regard.
- Arun Kumar segregates the shocks into two categories, viz., external shocks and policy induced shocks. The UPA government handled the external shocks quite well. Another issue was the out-of-pocket expenditure on health. While comparing these figures, he feels that you must keep the pandemic years out, for better comparison. Here he feels that there is not much difference between these two periods.
- The White Paper claims that the UPA government spent more on consumption than on productive investment. Kumar’s take on this is that it is based on the figures as per the Budget and not for the economy as a whole. According to him if you consider the combined investment by the Centre, States, and Public Sector enterprises the record of the UPA government is nothing much to write home about.
- Arun Kumar feels backed up by figures that by the time the NDA government had taken over, the economy was already on the road to recovery.
- He is caustic in his comment that GDP figures were not provided deliberately to preempt a comparison between the UPA and NDA periods. 38% of the industrial units to measure the GDP growth did not exist at all! He feels that the GDP data had been manipulated to show improved performance when the reality was otherwise. As figures of GDP growth are based on flawed base, the growth would be around 1% against 7%.
- The government is fighting shy of sharing the real figures of unemployment as it is rising especially since there are underemployment and disguised unemployment and those looking for work outside the labour force.
- Finally, he feels that the data shared by the government should not be meddled with leading to inaccurate conclusions.
Though the White Paper was generated by the government to help the ruling Party at the time of general elections, some of the findings as per the economists leave much to be desired. In the end, the Paper presented was neither White nor Black but Grey.
The ruling party got a pleasant surprise just as they are preparing to face the electorate in the impending elections to the Lok Sabha. Here comes the news that the country’s GDP grew by a whopping 8.40% in the December quarter. This has surpassed even the most optimistic expectations of the analysts. When Agriculture sector contracted by 0.80% the industrial and services sectors more than made up for this contraction. The National Statistics Office, in its Second Advance Estimates, pegged the country’s growth at 7.60% higher than the 7.30% growth projected in its First Advance Estimates. This performance by the Indian economy surpasses the estimates of the RBI too. India today remains the fastest growing major economy in the world according to gross domestic product (GDP) data released by the Statistics Ministry. The rise in GDP growth was supported by robust growth in manufacturing and construction sectors along with a strong domestic demand. The PM had this to say on the country’s performance on the economic front: “Robust 8.4 per cent GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!”.
Permit me to conclude this piece by penning eulogies for two outstanding Indians who touched us in two entirely different fields. Fali S Nariman, arguably the staunchest defender of our Constitution passed away at the ripe old age of 95. Nariman was a senior Supreme Court advocate who was a true icon of the legal world. He was a prolific writer and one of the best public speakers, lacing his speeches with anecdotes, wit and wisdom. Nariman was the last of a generation of lawyers from Bombay (now Mumbai) who shaped and molded the history of constitutional law in India. Amin Sayani was a radio and TV broadcaster with a distinctive voice and charismatic personality. He entertained people for seven decades and often said that music is the glue that held India together. Sayani’s voice was so popular that even if he was not immediately recognized, he immediately got mobbed when he began speaking. He made his distinct mark in his radio programme called Binaca Geet Mala. In the celestial world, the lawyer would learn a quick lesson or two in a sonorous voice on Hindi songs. In return the compere could learn some lessons from the best of lawyers India has seen till date. May the souls of these two great Indians rest in eternal peace!
Thank you.
Venkat R Venkitachalam
