Results of Assembly elections recently held in Delhi, Rajasthan, MP and Chhattisgarh were in the desired line. The results give an impression that people all over the country waiting for an opportunity to teach UPA and Congress party a lesson!
Few days back, just before the elections, when I reached Kerala from Delhi, my mother, a staunch Congress supporter, who never votes for any non-congress party or a candidate, told me that now she has to pay Rs. 1000 + for the gas cylinder. And she termed Aadhar linked direct subsidy as a foolish decision. Her comment is indeed in tune with the response of women living in the neighborhood. Many in Pathanamthitta district, which is one of the first 20 districts in the country, where Aadhar Direct transfer scheme was launched, in the first phase. Mothers seem to be angry and upset. There are other reasons as well, that we all know, such as price rise, for their anger. Onion prices have gone up. All vegetables are expensive! If you want to cultivate your land, then the labor cost is as high as Rs. 500 per day and goes up on a quarterly basis by Rs. 50 or more.
Agriculture and farming activities are affected. However in states like Punjab where large scale agriculture and farming prevails, farmers manage with machines and high-tech agro tools that need very less labor. But for Kerala that is not still the case. Workers are not available when farmers need them, as they get NREGA jobs back in their villages; farmers in Punjab have no other option other than going for mechanization.
Similarly, small scale industries are affected due to labor shortage and increasing labor input cost. And in the rural manufacturing sector, handicraftsmen, handloom enterprises, potters and several other small and tiny sectors, are opting out of those manufacturing ventures into services as well as other riskless livelihood options. And unorganized sector entrepreneurs in many cases managing with NREGA and subsidized food support programs.
Mr. M. L Dhawan, an entrepreneur, who represents a strong industry association from Delhi NCR region, while participating in a discussion organized by International Society for SMEs( ISSME) in Delhi, said, many of the units are getting closed down and they cannot survive due to labor shortage and other increasing expenses! Mr. Chandrshekhar Singh, a building industry product manufacturer, from Greater Noida, feels survival is difficult for his company as there are cheaper alternatives available in the market from China. Days ahead would be difficult for entrepreneurs and MSMEs, says Mr. Sunil Sharma, Secretary General of International Society for SMEs (ISSME).
Entrepreneurs across the spectrum blame government policies, which are purely vote bank oriented and populist. MSMEs across India started experiencing a severe crisis situation. Many feel that enterprises and entrepreneurs would have to encounter big tussle for survival as the crisis situation gets deepened in the coming days! I feel no government in the future would be able to address and rectify the situation, at least for some time. As addressing the causes would be politically detrimental, each ruling alliance would fear in the future and delay resolving the crisis, resulting in weakening of India’s manufacturing ability further and impacting productive job creation capacity considerably.
A more serious crisis has also being created in the process, which may be termed as a cultural crisis. Culture of entrepreneurship is in challenge in India. Too much of vote bank targeted policies are slowly going to erode the foundation of entrepreneurship and MSMEs. No hope for rural industries! Gandhian dream of Gram Swaraj is being challenged! When micro finance agencies failed in India, it was much due to the failure of micro finance getting translated into micro enterprises or small ventures of poor people. It’s a proven thing that micro enterprises creation is a sustainable way to fight poverty. It can create rural jobs, enhance living conditions of poor and alleviate poverty in a sustainable manner, if micro finance reaches them with appropriate supporting mechanism to mentor the entrepreneurs who receive micro-capital with additional eco-system for cultural capital and networking capacity formation. But that requirement has suddenly disappeared from the scene, it seems. Food security support and NREGA together would feed our people, but how long?
Mr. Sidhartha Mishra of ISSME says, ‘how could new venture creation in rural India happen when the Government encourages people to sleep over 35 kilo of subsidized rice and Rs.300 of stipend per month. Hand holding is required and not spoon feeding’.
There is nothing much we should enquire for the causes of declining growth, manufacturing output and not so better performance in many of the manufacturing sectors in general. As Mr. K. A Joseph, President Kerala Coir Matting Manufacturers Association (KCMA) says, almost 40% laborers of traditional coir industry have shifted from this sector to construction and other areas and a large number of the units are affected. Some observers say, close to 40 percent or more units stopped their operations. Problem is same with several other labor intensive small scale manufacturing sectors including agro based and food processing industries, wherever labor is needed more, across the country. Fish processing, a labor intensive sector, is a case in this context, which got affected severely. Knowingly or unknowingly, UPA policies have resulted in the annihilation of entrepreneur spirit and entrepreneurship culture.
If Mahatma Gandhi was alive today, he would have been on a fast to protest against some of these policies like food security and Mahatma Gandhi - NREGA. It is a shame that the Congress government has named it after Mahatma Gandhi. NREGA has literally killed rural industries, small scale industries and self-employment culture in the country, a point of view small scale industry association leaders share commonly across the country. And further, all these Yojanas by UPA, if not discontinued or designed properly would continue to kill small scale manufacturing industries in the country, create more unemployment and make our economic achievements of the past untenable. Problem with the food security bill and one Rupee / Two rupee rice is not that of fiscal deficit at all. It will not create that kind of financial burden. The so called welfare-oriented, much appropriate to call vote bank, policies were framed and schemes & programs were devised with the advice of some of the so called elite politicians with MBA degree/s from universities/ institutes abroad without going deep and knowing the ground realities. But they are counter-productive as well as the welfare measures won’t be sustainable.
Overall performance, policies of last 10 years would not contribute much to fiscal deficit but resulted in a severe confidence deficit in the government by entrepreneurial communities and business class. It has created different kind of crisis, which is the attitude, approach and the overall readiness of people to get engaged in self-employment and rural entrepreneurial ventures, as welfare programs initiated has challenged and broken the narrow equilibrium in the labor market, with extensive and long term impact. So Gandhian dream of Gram Swaraj is also being challenged thanks to our new Gandhees and their advisors!
It’s difficult to believe that Dr. Manmohan Singh has scripted all these programs. In 1991 when Dr. Singh as Finance Minister introduced the new economic policies and liberal economic program, he has indeed created a new India. Many new Indian entrepreneurs took birth! These Indians contributed to the post 1991 growth story!
Aspirations of the post-1991 generations are also different. They are educated. Educational opportunities also went up several times since 1991. Educational loans further made it easy for anyone to get their studies funded. No more funds a barrier for higher studies in the New India. English schooling is now much popular even in remote villages. Practical Indian villager thinks global and he has high aspirations and vision! Rahul Gandhi, while speaking in the parliament during Nuclear debate, presented this very well through a particular case, changing aspirations and expectations of the rural youth and their parents. He presented this case through the example of a Maharashtra villager, during that debate!
People in the country are aggressive and have learned to be more self-supportive, innovative and have developed & cultivated entrepreneurial spirit. They are no more slaves. They want to be independent. Their role models are no more civil servants and babus. Ambanis, Bill Gates or Infosys founder and those other entrepreneurs in their neighborhood who could make a difference, in their respective, field of business activity or sector, district, or State or in the country, are their models!
I feel Congress failed to understand this aspect and underestimated the capacity and power of people to make a difference for them! They followed Garibi Hatao logic of Indira Gandhi time. But I don’t know who advised them wrongly. However, there are some hints about wrong advisors who caused this surprise for the BJP.
There are many interesting reasoning one could quote from a particular Rahul advisor, whom the media claims to be the chief advisor and mentor of the young leader, the probable PM candidate of Congress and UPA. It would be interesting to see the logic of such an advisor, who claims “with more toilets we would be able to prevent rapes.” The logic of the advisor is that rapes happen when women go out for defecation. May be this kind of reasoning might have influenced UPA policies. The same mentor opposed and created bad blood when he opposed Janasree movement in Kerala to be funded as part of national rural livelihood mission. Together, Kudumbasree and Janasree movements would have contributed much more to job creation, innovation climate and growth of manufacturing output in Kerala. There was much synergy in their working together. But this advisor saw politics and ill motive by Kerala Congress leaders (colleagues from his own party) and discarded the idea and thereby an opportunity for growth and expansion for newly created micro enterprises in Kerala. There are many such interesting logics and reasoning of this Congress Chief Advisor and so called Rahul Mentor.
There is nothing much the Congress high command to review and evaluate. It’s only their wrong policies and poorly designed welfare programs that caused their debacle! Let them be ready for a much more big defeat in 2014! But one thing that Rahulji should do, while taking advices and suggestions from people. Consult extensively with your rural leaders, so as to verify, if there is any sense in the arguments and merits of your IIT and Foreign University returned advisors! However, one thing that I am very sure, Aadhar itself would cause Congress debacle in 2014!