Answering Prashant Kishor's claims of unemployment, inequality and rural distress in Modi regime

Respected political analyst and strategist, former head of I-Pac, Prashant Kishor (PK) is all in the news these days for forecasting that in the ongoing general elections that will conclude on 1st June, 2024, BJP will return back to power with similar Lok Sabha seats like last time. However, he claims this will come about despite brand Modi’s diminishing value.

He concedes that Modi remains a popular leader, and people credit his government for 4 things a) increasing the stature of Bharat in the world, b) a firm and formidable national security and improved law and order, c) no corruption scandals at the top, and d) great strides made in infrastructure. Against this he claims, there is disappointment, but not anger against Modi for many reasons, the most important which he sums up as a) unemployment, b) rising inequality, and especially highlights c) the problem of rural distress, with people in the villages, according to him, lamenting that their situation has worsened over the past many years. He blames the opposition for not getting its act together to highlight these grievances,and by its sheer inability to throw up a viable challenger to Modi

This article will touch upon the 3 issues that Prashant Kishor has highlighted as the root cause of the supposed disappointment with Modi.

UNEMPLOYMENT

Goovernment figures (PLFS) show that unemployment rate has dipped to 3.1%, with that of women even better at 2.9%, the lowest in at least 3 years, with maximum jobs created for the youth, as has been repeatedly highlighted by renowned economist Dr Surjit Bhalla,former executive director at IMF.

Against this, there are statistics from the “independent” CMIE that claim that actually the converse is true. It paints a grim picture, declares that the national unemployment rate has actually increased up to 10%. Nevertheless, while many in the entrenched leftist eco-system speak highly of this economic think-tank, many financial experts do not take it seriously.

Then, there are some other international agencies that seem to know India better than the Indians. It says that there is a big problem of underemployment in the country, and people are not getting the jobs they desire, besides hinting that they are also underpaid. There might be some truth in it. But then, is this even an Indian phenomenon? Take for example the US, which today enjoys among the lowest unemployment rates ever, and where official records show that plenty of jobs are available.

Well, according to an article published by Fortune.com, nearly half of American workers are unhappy; another survey shows 4 in 10 women think they are being underpaid compared to 2 out of 10 men; a prestigious report finds that 68% Americans couldn’t cover their expenses for even a month should they be fired; and most importantly as CNN reports, “Americans’ views of the economy are……..still pretty bad, with 7 in 10 saying it’s in poor shape. Closer to home, 50% say their own financial situation is worse than it was a year ago.” And its noteworthy that these views are coming from a country that is supposedly booming.

However, it is true that there are other statistics from the US that show a different picture, so competitive or shall we say, conflicting statistics are common there, as they are here.

One may argue that in a country the size of India that has the world’s largest population, and where upwards of 12 million people enter the workforce each year, sufficient well-paying jobs satisfactory to all may be an impossible scenario. However, no one can deny the sheer number of opportunities and jobs that have been created under the Modi government. One doesn’t need to be an expert to see the kind of prosperity the country is going through and the obvious benefit that this is giving to its citizens across the country.

For example, we have become the world’s 2nd largest manufacturer of mobile phones, from just 2 units in 2014 to more than 200 that today hire 1.2 million workers. Or take the fact that from just 450 startups in 2016, we have become the country with the third largest number of startups at 1.28 lakh startups as of April, 2024. And most of this growth has been seen in the smaller cities and towns encompassing most of the districts

In terms of sheer growth in numbers however, and the ample opportunities therein, very few industries can beat the construction industry, thanks to the massive building of highways and roads, phenomenal rise in real estate and housing and much more. “A recent report by Knight Frank India and the Royal Institution of Chartered Surveyors (RICS) highlights the significant role of India’s construction sector as the second-largest employment generator reaching up to 7.1 crore individuals”. It’s noteworthy that in a decade, there has been a growth of 3.1 crore jobs in this sector.

And this kind of remarkable progress can be seen across all fields that has seen new jobs being created across the country. No wonder that Mr Bhalla considers the current dispensation’s creation of jobs as the greatest since independence and contrasts it with the 10 years under Manmohan Singh’s that saw the least number of jobs created.

RISING INEQUALITY

The entire noise on this subject has been created by the findings of a report titled ‘Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj” written by authors like Thomas Piketty, Nitin Kumar Bharti, Lucas Chancel and Anmol Somanchi. The report’s conclusion claims that whereas in 1991, the top 1% of the rich controlled 21% of the country’s wealth, the figure as of 2023 stood at 40%!!!!!!!!!!

This report was immediately latched on to by the entire opposition camp and professional Modi-haters, many of whom claimed the report as evidence of their shouting and screaming from rooftops that the rich in India were getting richer, while the poor were getting poorer.

Of course, they conveniently forgot the fact that according to a UN study, in the last 15 years, around 415 million people in India exited poverty, with the Niti Aayog detailing how “around 248 million people living in the country escaped multidimensional poverty in the past nine years. According to this report, the share of people living in this condition declined to 11% from 29% in the past nine years”.

So. this “poor getting poorer” doesn’t hold any ground, also considering that poverty levels had already started falling from Manmohan Singh’s tenure but accelerated with Modi’s rule.

But coming back to this report, renowned economists Dr Surjit Bhalla and Karan Bhasin have rubbished the report of being full of inaccuracies and questionable assumptions, almost as if the authors wrote on what they personally believed in, and not in backing their arguments with evidences. It can be accessed at:

http://www.indianexpress.com/article/opinion/columns/the-devil-is-in-the-footnote-9235068/>indianexpress.com/article/opinion/columns/the-devil-is-in-the-footnote-9235068/<http://www.indianexpress.com/article/opinion/columns/the-devil-is-in-the-footnote-9235068/

On the contrary, the country has become a more level playing field than before. As THE ECONOMIST published from the UK writes in its cover story “How Strong is India’s economy” 27/4/24 – 3/5/24, that in 2019, a study by Marcellus, a money-management firm, concluded that the top 20 companies in India earned 79% of all profits, but this drastically dropped to just 38% in March 2023. So also, it says that the proportion of the population owing shares of some sorts has increased from just 7% to more than 20% since 2019.

The magazine further writes how government policies have instilled confidence in the banking sector, with private banks branches growing by 60% since 2015 to 163,000 – it adds that comparatively there are just 78,000 branches in the US. It shows how this has made a massive difference in the villages that we will cover in our next section, as “consumer finance has shifted from local lenders charging a shocking 10% per week to bank loans at annual rates of 15% or below”

RURAL DISTRESS

And now we finally come to the issue that PK says is the most important of them all, something which he says the Modi government has failed to address properly – namely rural distress. He says that wherever he’s travelled, especially in Bihar, he’s found that the country’s economic prosperity has left the villages far behind, and that there is lot of resentment against the government on this.

Firstly, only those who are deliberately blind or ignorant can deny the kind of mammoth progress that has been made in the country over the past 10 years under the watch of Modi government – the kinds of highways and flyovers built, and the kind of road connectivity that one can see even in the remotest of villages in the country, a point that PK does accept.

But equally the giant strides that have been made in building toilets and improving sanitation, the Swachh Bharat abhiyan, the Jan Dhan yojana, direct benefits to the deserving by means of direct transfers in their accounts plus a host of other welfare schemes, including the building of 40 million houses and piped water for 253 million people, most of these have directly impacted the villages of which they have been the main beneficiaries – the list is long, but we are just writing a few of them here.

We already spoke of the massive opening of bank branches in rural India. Since 2014, government push has seen an astounding 520 million people – mostly poor – open bank accounts and they now hold US$28 billion, according to the same ECONOMIST article earlier quoted, which adds that this has helped “India’s masses become savers, providers of capital, and possible entrepreneurs”. There is absolutely no doubt that the 10 years of Modi rule have completely transformed rural India like never before.

A lot is talked about rural wages remaining stagnant. Again we have competing statistics on this, with the government backed PLFS noting that rural unemployment is actually the lowest in 5 years and even better than urban unemployment. It also adds that rural worker’s earnings have grown at the quickest pace in 5 years. CMIE on the other hand, while acknowledging that rural unemployment has fallen considerably, claims that “real wages” haven’t changed in 10 years. But then it sort of contradicts itself by saying that “consumer sentiments improved a bit in November’23. Rural India saw a much better improvement than urban India. Urban India turned circumscept on its future while rural India seemed to repose greater faith in the coming times, because of a healthy increase in optimistic rural households”. Does this talk sound of rural distress or stagnant wages to anyone? No wonder many industry experts do not regard CMIE to be a serious analyst.

Yet another way to measure how rural India is in a much better shape than in the past, if not prospering, is the way in which rural India is today spending less on essential food items and more on clothes, entertainment and other stuff. The Indian household spending has more than doubled in the last 10 years, with rural India leading the change. For example, around 10 years back rural Indian households consumption was nearly 53% of their incomes, which has now declined to 47%. No wonder, a report by Nielson in November last year was titled “Rural market recovery boosts consumer goods sector growth to 9%”

Having said that, there may be some truth in the statement that even the best government planning and ideas of the past decade may not be able to cope up with rural aspirations in the same way as urban aspirations could be met. For a large number of people dependent on agriculture, mostly small farms, the possibiliity of extraordinary returns from that will remain slim.

It reminds me of what a senior BJP leader had told me some years back. His ancestral place is in coastal Andhra, which he said is among the most fertile in the country, with its rich agricultural land and an abundant water supply from the Godavari, Krishna and Penna rivers. So, he told me that even 20 years back, the average farmer in his region hoped that he could provide a good livelihood for his family, get the kids educated in good government schools, build a good house and save some money for the rainy day.

But today’s farmers in coastal Andhra aren’t satisfied with this, they want to send their children to the US. Its become a status symbol for many such farmers to send their kids there, for which they are ready to take loans and whatever it takes. So the BJP leader explained that even the prosperous farms in the country are not going to give that yield for farmers to send their kids abroad.

Similarly while talking with many cab and auto drivers and workers from Bihar and UP, working in Mumbai, Delhi, Hyderabad, the big cities and towns, I was told that many of them had left farming in the villages with their eldest sibling managing it, and while speaking with some of them, I found that many of them had ambitions to send their kids to good schools, one person I spoke to was saving money for his son to become a chartered accountant, and another one for his daughter to become a doctor.

All these are great, but it’s a fact that most government schemes can assist the farmers in the villages but may not be able to cope up with all their aspirations. However, all the people that i”ve spoken to, since Modi first came to power in 2014, have been all praise for Modi govenrnment in being the big game changer in building roads and toilets in their villages creating all sorts of opportunities where none existed in the past.

This sentiment is backed by two recent polls by reputable agencies.

A Gallup poll of last year shows that 57% Indians felt that their living standards were improving . Yes the richest 20% were more positive than the poorest 20% (72% vs 44%) but these are still much better figures compared to the level of optimism seen in USA, Germany and Japan. Most imporantantly for all the claims of PK and all opposition leaders, rural Indians are far, far more optimistic about their improving living standards at an incredible 65% vs 59% for towns and 51% for cities. So much fro rural distress!!!!!!!!!

So also, News 18 carried out an opinion poll early this year,, surveying 1.19 lakh people, and 72% of the people said that their economic situation will become better if BJP returned to power. 73% of those polled in urban areas said their economic condition will surely improve with Modi’s return vs 71% for rural areas, so its very small difference.

******

In conclusion, we would like to decisively say that both PK and the Opposition are factually wrong in their claims of a rising discontent in the country, and their claims of unemployment, rising inequality and rural distress are unfounded.

Sources for Unemployment:-

https://telecom.economictimes.indiatimes.com/news/devices/indian-electronics-industry-sees-impressive-154-pc-growth-in-hiring-skilling-report/109399220www.financialexpress.com/policy/economy-indias-unemployment-rate-dips-to-3-1-in-2023-lowest-in-3-years-nso-data-3414631/<http://www.financialexpress.com/policy/economy-indias-unemployment-rate-dips-to-3-1-in-2023-lowest-in-3-years-nso-data-3414631/>

www.cnbctv18.com/india/india-jobless-rate-rises-to-more-than-two-year-high-cmie-says-18216081.htm<http://www.cnbctv18.com/india/india-jobless-rate-rises-to-more-than-two-year-high-cmie-says-18216081.htm>

www.fortune.com/2023/04/01/american-workers-unhappy-antiwork-millennials-gen-z/<http://www.fortune.com/2023/04/01/american-workers-unhappy-antiwork-millennials-gen-z/>

www.edition.cnn.com/2023/04/29/politics/state-of-the-nation-poll-economy/index.html<http://www.edition.cnn.com/2023/04/29/politics/state-of-the-nation-poll-economy/index.html>

www.cbsnews.com/news/college-grads-jobs-underemployed/<http://www.cbsnews.com/news/college-grads-jobs-underemployed/>

www.timesofindia.indiatimes.com/business/india-business/never-before-in-indian-history-economist-surjit-bhalla-says-unprecedented-number-of-jobs-created-under-modi-government/articleshow/109869388.cms<http://www.timesofindia.indiatimes.com/business/india-business/never-before-in-indian-history-economist-surjit-bhalla-says-unprecedented-number-of-jobs-created-under-modi-government/articleshow/109869388.cms>

www.news9live.com/technology/mobile-phone/india-mobile-manufacturing-growth-22-fold-increase-jobs-creation-apple-market-share-2379224<http://www.news9live.com/technology/mobile-phone/india-mobile-manufacturing-growth-22-fold-increase-jobs-creation-apple-market-share-2379224>

www.news.warrington.ufl.edu/faculty-and-research/4-in-10-women-feel-underpaid-compared-to-2-in-10-men-survey/<http://www.news.warrington.ufl.edu/faculty-and-research/4-in-10-women-feel-underpaid-compared-to-2-in-10-men-survey/>

www.marketwatch.com/picks/68-of-americans-couldnt-cover-their-living-expenses-for-even-a-month-if-they-lost-their-job-survey-finds-the-good-news-now-is-the-best-time-in-years-to-fix-that-a9842d35<http://www.marketwatch.com/picks/68-of-americans-couldnt-cover-their-living-expenses-for-even-a-month-if-they-lost-their-job-survey-finds-the-good-news-now-is-the-best-time-in-years-to-fix-that-a9842d35>

www.business-standard.com/industry/news/31-million-jobs-created-in-real-estate-under-modi-government-report-124040800902_1.html<http://www.business-standard.com/industry/news/31-million-jobs-created-in-real-estate-under-modi-government-report-124040800902_1.html>

www.indiatoday.in/education-today/latest-studies/story/indias-construction-sector-set-to-generate-over-10-crore-jobs-by-2030-report-2416110-2023-08-04<http://www.indiatoday.in/education-today/latest-studies/story/indias-construction-sector-set-to-generate-over-10-crore-jobs-by-2030-report-2416110-2023-08-04>