The growth rate of Gross Domestic Products (GDP) has again proved that the country’s economy is on the decline. According to the figures, the GDP’s rate has shrunk to 5.3 percent in the fourth quarter of the last financial year. This rate is even one percent below the government’s own expectations and it is obvious that even people having little understanding about economy are familiar with the fact that one percent decline in growth rate can worsen the situation. Shockingly, the quarterly result of the GDP has hit a new low of 5.3 percent in the last nine years which corroborates the fact that the economy is in deep crisis. It is irony that the Centre is trying to distance away from the reality by holding the global economic mess responsible for it. This is the outcome of the lackadaisical approach and policy paralysis of the ruling dispensation that not only the GDP is sliding but also a sharp decline in domestic and foreign investment is also being witnessed. In the same vein, the export of the country is shrinking in comparison to import. The UPA government looks complete helpless as it is neither able to contain the inflation nor making concrete strategy so that the GDP could spiral up.

The policy makers of the Centre are of the view that the strategic standoff regarding environment has hamstrung the investment in mining sector which has resulted in decline in production of steel in the country, but they avoid talking about the initiatives being taken to sort out these strategic hurdles. They are also overlooking the fact that the mining sector has not only been hit by the environmental hitches rather the government’s failure to stem rampant corruption is also considered to be a potent reason behind it. The irregularities in the mining sector are rampant in so many states but no promptness is being seen on parts of the government to stub it out. Whenever, a big case of corruption surfaces in the country, the bureaucracy opts to become inactive for their own safety. This attitude of the bureaucracy is one of the main reasons for the inconsistency in the decision making process which is being perceived nowadays. Unfortunately, the irresponsible attitude of the political leadership provides a room to the bureaucracy to cover up their flaws.

Given the worsening economic situation and widening fiscal deficit, the Centre has launched a drive to curtail its expanses, but only these measures are not going to help. These initiatives are just symbolic as they may emanate a political message to the people that government is serious on curbing extravagance, but this can’t provide solution to the serious challenges before the economy. The crisis of the economy has become so serious because the government not only avoided to take right decisions at right time but even the decisions taken by the government also proved to be wrong. The excessive subsidies given on petroleum products, food grains and fertilizers are an example in this regard. The nation is suffering due to the growing burden of subsidy on the economy. For the past few months, the government is promising to take some bold decisions which still remain to be taken. The government has not been able to come out of its present state of predicament as it has been trying to avoid taking bold steps by citing the electoral compulsions or sometimes in the name of avoiding criticism of the opposition parties.

It is the result of the wrong decisions of the government that we have been repeatedly experiencing the disappointing developments on the front of foreign capital investment. Despite the Supreme Court’s ruling, the government’s decision to change the process of taxation on trade deals with foreign companies and its decision to levy taxes from back date, it is bound to have a bad impact on the front of foreign investment. It is quite natural that foreign investors are not only slamming this decision of the government but they are also saying that the future of foreign investment in India is in danger. The government needs to review its decision. Besides, it should also allow foreign investment in the areas like civil aviation, insurance and retail sector. It will not only encourage the foreign investors but it will also help strengthen the Rupee against dollar. To raise the production in the country, the government needs to put its efforts to reduce the interest rates as early as possible.

It also needs to devise ways to curb inflation and enhance investment in infrastructure sector. Though, the Congress which is leading the UPA government is itself responsible for the indecisiveness and policy paralysis, but it should also not be overlooked that its own allies especially the Trinamool Congress has left no stone unturned to ensure failure of the government on the economic front. Despite being a part of the UPA government at the Centre, Trinamool Congress Chief Mamata Banerjee seems to be busy in promoting her political agenda in West Bengal. This has culminated into the government’s failure to take bold decisions to strengthen the economic growth. It will be better if Mamata Banerjee agrees to understand that the economic situation has worsened to the extent that it could cause difficulties in the next general elections not only for the Congress but also for the Trinamool Congress. The Centre is left with less than two years of time and challenges on the economic front are scaling up. Keeping in view the present political and economic situation, the UPA government will hardly be able to escape anti-incumbency factor in the next general elections. The UPA allies need to understand that bold economic decisions are necessary for improving the economic situation as well as their poll prospects. It is no longer a time to continue sops like heavy subsidy or carrying forward MNREGA to appease the people rather it’s time to increase production and investment. They economy can be brought back on the track by sticking to such farsighted approaches. At the same time, the opposition parties should also not try to draw political mileage out of the present economic crisis. The all India bandh organized by the NDA and other parties was unwarranted. It is highly required that the political parties reach a consensus to rationalize the prices of petroleum products. Similarly, if the UPA government is not in a position to come out of its present state of predicament on taking decisions, then it will be better for it to face mid-term polls. Though, the option of a mid-term poll is a costly option but at the same time it seems that UPA government’s idleness on taking vital decisions could plunge the Indian economy in such a trouble which could take the economy years to come out of it.

(An original copy of the article published in Hindi on June 3, 2012 translated by the English Editorial. The author is Group Editor of Dainik Jagran)