India’s economic fortunes are far from what they once were.
A new book on the nation’s economic prospects and its political fortunes by economist Amitabh Kant argues that the country is struggling to adapt to its changing economic environment.
The new book by Amitabhar Kant, ‘Modiomics’, is being hailed by many for providing a fresh perspective on India’s transformation into a modern, modernising nation, according to Amitabha Kant, a political analyst.
“India is a country that is in transition from a socialist model to a liberal one.
It has seen a huge growth of the middle class, which has also seen the rise of the working class, the poor, the educated, and the poor have been left behind,” Mr Kant told The Times of Indian.”
Modi’s economic reforms have not gone down well with the masses.
But, in fact, the reform process has been much more successful in reducing poverty and poverty-related deaths,” he said.
Mr Kant’s book argues that India’s growth has been based on a combination of government subsidies and corporate tax cuts, both of which have helped boost the economy.
“The government has been subsidising the middle classes.
The tax rates are lower.
It is now possible to buy a car without paying income tax.
In fact, it is easier to buy a car than to pay taxes,” Mr Kant told The Times.
Modi has also promised to bring down the cost of living for the middle and upper classes, and the book argues India has been successful in doing so.
While the author points to the country’s massive manufacturing sector and huge increase in exports, he also criticises the government for keeping the economy afloat.
Mr Kant says India’s government is failing to take into account the economic impacts of these policies.
“The Modi government has a policy of ‘zero tariffs, zero taxes, zero regulations’ and has reduced the burden of taxation.
But the real burden has been borne by the middle- and upper-middle classes, who have been subjected to a vicious circle of low productivity growth, high inflation, and lower living standards,” he added.”
It has not been possible for India to attract foreign investment.
It is clear that foreign investors have not come because of the economic reforms.
Instead, they came because India has become a pariah state in the eyes of investors.
As a result, we have lost billions of dollars in investment.
This is not only an economic tragedy, it is also a political tragedy.”
Modis economic policy has resulted in a severe and rapid drop in inflation, Mr Kant said.
This has also led to the sharpest fall in wages in recent times.
According to the New Economic Policy Project, a think-tank with an India Focus mission, India’s middle-class incomes have fallen by an average of 12 per cent since 2007, while the working-class income has fallen by 10 per cent.
Over the same period, the working and middle classes have seen a substantial rise in disposable incomes. Moreover, a new wave of low-wage jobs has emerged as India becomes a less attractive place to work, according to New Indian Economy project which also analysed the India Jobs Survey, a monthly survey by the World Bank.
“A major reason for this is that India is a signatory to the WTO Agreement, a treaty which states that foreign trade can only be conducted within certain parameters, such as standards, conditions, tariffs, etc. These parameters have not been met,” Mr Kotak said.
“What this has meant is that even though India has ratified the WTO agreement, there is no mechanism for the government to enforce this agreement on its own.”
Mr Kotak added that this has made it difficult for foreign investors to invest in India.
“Foreign investors are being deterred from coming to India because of these rules.
They cannot invest in the country because the country has become such a parochial state,” he told The Times of India.
India is one of the world economies most dependent on foreign aid, according the World Development Indicators, with over 20 per cent of the country dependent on foreign assistance.
Amitabh Kan, who co-authored the book, told the Times of India that India has been able to avoid being a paragon of socialism and liberalism, by ensuring its middle class and lower-class class remain well off, despite being one of its poorest nations.
“But the middle- and lower-class classes have not benefited.
The rich have not done better, the middle Class has not done well, the poor have not gotten richer,” he explained.”
So what is the next step for the Indian