Narendra Modi is yet to get us the Rs 15 lakh that he had promised every one of us from the black accounts in Swiss banks. No sweat. As G.K. Chesterton had said, “Every politician is emphatically a promising politician.” Modi isn’t an exception; he is an example—an exuberant one!
Politicians are given to poll-speak in hyperbole. But Modi had gone overboard with his pre-poll hyperbole. When the rupee fell to 60-plus to a dollar in 2014, Modi had mocked whether it would cross Manmohan’s age (then 82). So had he mocked at the rising petrol prices.
Now he is paying the price, in devalued rupees. Rupee value has crossed Modi’s age (68), and so has the price of petrol. A fistful of dollars now cost a packet in rupees.
There is good news and bad news on the black money front. The good news is that Indian deposits in the Swiss vaults have doubled in the four years since Modi came in promising us achche din (good times). That means there is enough now to get every one of us Rs 30 lakh. Aur achche din! Better times!
The bad news is that Piyush Goyal, who is running the treasury in the absence of Arun Jaitley, says that this money could be as white as the snow on the Swiss Alps. Which means we can’t touch it.
Illustration: Binesh Sreedharan
No sweat, again. None of us had booked a car or a flat in the hope of getting that money.
The dispute these days is not just about the colour of money (black or white), but also about the colour of the economy. The opposition says it is in the red, and the government says it is in the pink of health.
The rupee is falling; foreign investors are fleeing; FDI has fallen from $44 billion to $40 billion; dollar outflow doubled to 11 billion; trade deficit has been the worst since 2013; merchandise exports have been stunted; the GST flop-show has pushed small businesses into the red; and Urjit Patel hasn’t finished counting the banned notes—thus speak the critics.
Toss the coin and look at the flip side, says the government. Patel may be counting the banned rupees, but he has a stock of 400 billion greenbacks, counted and accounted for; dollars may be fleeing, but Dalal Street is flooded with euros, pounds, yens and yuans flowing in; rupee may have fallen a notch, but it is doing better than most Asian monies; and exporters are earning more—thus speak the men who run the mint.
Who to believe? If you check with the economists—those people who write columns in pink papers—you will get it all in grey. They never tell you anything in black or white. Come to think of it, economists are the most ambidextrous people. They tell you one thing “on the one hand”, and exactly the opposite “on the other hand.” So much so that Harry Truman once asked if he could get an economist who had only one hand. India had a viceroy—Lord Irwin.
There is little that governments or economists can do about falling currencies. But tall claims and poll promises about economy have a tendency to backfire on the people who make them. Harold Macmillan claimed in July 1957 that the British people “never had it so good”. Within weeks prices shot up, the government cut spending, interest rates shot up, and cabinet colleagues resigned. Atal Bihari Vajpayee went to the polls in 2004 claiming to have made “India Shining”. He lost the polls. Now Modi is facing the fire-test over his claim of having brought achche din, a desi version of “never had it so good”.
If you believe Subramanian Swamy, who thinks that he is the best finance minister India didn’t have, economic performance has nothing to do with electoral performance. Narasimha Rao and Vajpayee ran the economy well, yet lost the polls, he says. Politics is more about perception than performance.
In that case, it isn’t the economy, stupid!
prasannan@theweek.in