A friendly warning

Rashtriya Swayamsevak Sangh (RSS) general secretary Dattatreya Hosabale literally punctured the inflated claims of the Modi government about India’s 13.5% growth in the April to June quarter of this year. This meant that the country whooshed into top place as the world’s fastest-growing large economy and, incidentally, replacing Great Britain as the world’s fifth-biggest economy. Hosabale may not have actually meant to spoil the party for Modi but had only cited statistics to issue a note of caution against overconfidence. In a webinar organised on the occasion of the birth anniversaries of Mahatma Gandhi and Lal Bahadur Sashtri on October 2, organised by Swadeshi Jagran Manch, a Sangh affiliate. Hosabale concerns over rising income inequality, unemployment and poverty in India, referring to them as “demon-like challenges” which have to be ended. Hosabale said that in the last 75 years, India has made remarkable achievements in many fields, but poverty, unemployment rate and income inequality still remain a challenge like “demons” and it is very important to end them. Hosabale said Indians ought to be sad that 20 crore people are below the poverty line. On the economy, he said 23 crore people are earning less than Rs 375 per day and chose to call poverty as a demon-like challenge against the country. Hosabale said it was important that this poverty demon be put to death. He cited statistics from Centre for Monitoring Indian Economy (CMIE) that there are four crore unemployed people in the country, 2.2 crore in rural areas and 1.8 crore in urban areas. Managing Director CMEI Mahesh Vyas disclosed to a new agency that urban unemployment rate is usually higher at about 8 per cent than the rural unemployment rate, which is usually around 7 per cent. He said that in the month of August the urban unemployment rate shot up to 9.6 per cent and rural unemployment rate also increased to 7.7 per cent. Like the rest of the world, India has also been hit by two events- Covid 19 and the Russian invasion of Ukraine. The last two years have changed the world as it grappled with two black swan events, namely the impact of Covid 19 pandemic and the Russia invasion of Ukraine. These two events had globally impacted the economy. Inflation plays a major role in the growth of an economy. While leading economies of US (inflation rate of 8.5%) and Europe (UK 10.1%) face inflation of never seen before levels, India (6.71%) has to a large extent been successful in keeping it under check. This is no mean feat considering the high import bill of crude in the country. There have been consistent and steady steps by the RBI in ensuring this remains in check. While Europe struggles with energy crisis, small but sure steps by prime minister Narendra Modi, such as maintain healthy ties with Russian diplomatically conducive, ensures that India can tap on Russian crude whenever the need arises. The Indian economy is in facing some unprecedented challenges. A protracted war in Europe has introduced new strains even before the impact of Covid-19 has fully waned. Together, these two significantly weaken the backbone of the world economy, impacting both the advanced and emerging markets. Contemporaneously, the Indian economy is also impacted.