I must share with you two really profound – and radically contrasting – lessons in Economics I learned today. One, from Congress President and Prime Minister-aspirant Rahul Gandhi; the other, from my colleague-become-friend of some 24 years, Rickshaw and Thela (wheelbarrow) Operator Suresh.
First, Rahul, who “chose to explain a bit of economics to voters” while addressing a public meeting on April 19th at Bajipura (Gujarat). To quote from today’s Indian Express article [click here to read]:
‘He (Narendra Modi) has taken money from your pocket, and you have stopped purchasing goods like shirts, pants, watches, and mobile phones.’ Rahul explained. ‘This led to the shutdown of factories in India and many labourers lost their jobs. The unemployment rate is now at its highest in the past 45 years.’
He continued: ‘Under the NYAY scheme, an amount of Rs 72,000 will directly go into the bank account of women. Then you will start shopping, and when you shop, the factory will start functioning, and the unemployment issue will be solved.’
He also said, if voted to power, ‘We will give 22 lakh government jobs in one year, which are currently vacant, and 10 lakh youths will be given jobs in various panchayats.’
Rahul’s insight really made me think, O gracious reader. In a weird and woolly way, it kind of makes sense, no?
Only one thing about Rahul’s economics troubles me: Rahul’s plan to create 22 lakh government jobs (+ 10 lakh quasi-government jobs). Since the 7th Finance Commission, even the lowliest central government employee in India starts with salary of Rs 18,000 per month; that’s Rs 216,000 (2.16 lakhs) annually. Which means that, even assuming that every one of Rahul’s 22 lakh new government employees draw only this minimum salary, the annual salary bill for these worthies will be Rs 47520,00,00,000.
That’s Rs 47,520 crores every year! At minimum government wages…
To me it seems a hell of a lot of money, just for the sake of having 22,00,000 more leech-like sarkari babus making life miserable for you and me and all other honest, tax-paying citizens. Especially so, because that Rs 47,520 crores is going to be forked out every year by honest, long-suffering income tax payers like you and I!
But then, I console myself, Rahul Gandhi has been advised on his NYAY scheme by globally renowned economists like our very own P Chidambaram, Arvind Subramanian, Raghuram Rajan, and also British Nobel Laureate Angus Deaton and French economist Thomas Piketty. Undoubtedly there’s something I’m missing, ignoramus that I am…
At my request, Suresh brought his thela over around 11 a.m and was helping me clear out some old furniture and stuff. As usual, over a break for a banana and chilled glass we discussed the state of the world. “Who will you vote for?” he asked. “I know I will not vote for AAP this time,” I replied. “I’m more and more inclined to vote for Modi’s BJP-NDA…”
“I too will vote for Modi,” he said firmly. “Of course, I suffered a lot when the note-bandhi [demonetization, 2016] happened. All my earnings are in cash even today; nobody pays a rickshaw/thela-wallah any other way but cash. And of course with prices always rising, it is a very hard life for a daily labourer like me. Besides, as you know, for much of last year, I could not work…”
In mid-2018, Suresh’s five year-old son was diagnosed with cancer. Thanks to the chemotherapy and the excellent medical care he received and continues to receive at the Delhi Government’s Lok Nayak Hospital, the child is now recovering well…but for Suresh and his wife, it has been a year of indescribable anxiety, physical and mental trauma….with the financial pressures (to raise over Rs 2 lakhs for the treatment, when there was no time to even ply his rickshaw or thela) only adding to their stress.
“But still, I think I will vote for Modi,” he repeated. “I think because of Modi, nowadays the sarkari-log, the babus are more scared to bully and exploit people like me. The babus and other people are also more scared to do do-numbaree (black marketing). People tell me, arre look at price rise under Modi; but I tell them, I don’t think Modi is to blame for price rise. I think the real reason for price rise is because people, more and more people, are greedy. People nowadays buy much more than they need, or can use; that’s the reason.”
He then described how, two weeks ago, he was helping a couple in the neighbourhood pack their belongings to move out of the city. “They had two wall-cupboards filled with only chaddars (bed sheets and bed-covers),” he murmured in awe. “They had more than three hundred chaddars in there, single and double! Most of them were new, untouched. If one couple buys so many hundred chaddars, why won’t prices of chaddars go up, sir? It’s like that with everything…”
Suresh’s words, too, made me think.
Unlike Rahul, who has a team of illustrious economic advisors, Suresh has none.
But Suresh has something that I think counts for much more: common sense, that comes from experience of hard ground realities.
I’ll go with Suresh’s insights into economics.