“When you are down and out, on the streets and evening falls hard”, say songwriter Paul Simon and singer Art Garfunkel, friends appear magically like a bridge across troubled waters.
That is exactly what 2021 needs to be for the entire world today. A magical bridge across which lies a shinning, clean, healthy and happy future. We have had troubles aplenty in the year gone by. A corrosive, unprovoked, ongoing confrontation with the Chinese in the high Himalayas. The ravages wreaked by the Covid-19 pandemic globally were especially hard for the poor, the marginalised and those who lost “good” jobs or had to shut down their businesses due to subdued demand or disrupted supply chains.
The “Chandigarh Chaupal” revolts
The year end has seen farmers — mostly from Punjab and some from Haryana and Uttar Pradesh — camping along the highways to New Delhi, up in arms against the government’s attempts to deregulate trade in agricultural products. When the resistance to reform comes from the country’s richest farmers and wholesalers of agricultural produce, it is prima facie proof of deep reform with the “bite” to make agricultural markets efficient and fair for small farmers.
The “Chandigarh Chaupal (collective)” opposing the farm reforms is much like the “Bombay Club”, albeit sans its pan national weight, which opposed the 1991 economic liberalization brought about by P.V. Narasimha Rao and his then finance minister Manmohan Singh. But industry never had it as good as do the heavily subsidized, large farmers in North India.
Santa has come and gone
So, who is the “friend” who could, with a wave of her magic wand, make these stumbling blocks to happiness vanish? We were hoping that Santa Claus could help. But Christmas has come and gone. Our stockings are bereft of a solution, though perhaps full of chocolates and sweets.
Science demolishes the demon pandemic
One such friend is the global scientific community which has come together to offer a smorgsboard of vaccines to protect against and weaken transmission of the Covid-19 virus. We are also blessed in having a large, domestic vaccine manufacturing capacity and a strong, distributed public vaccine delivery system, all of which should facilitate an equitable and efficient extension of the vaccine cover to those at risk.
The enhanced vaccine cover will, we hope, diminish social and economic disruptions. By December 2021 — a full twenty-one months after Covid-19 hit us, the economy should have recovered to the level at the end of 2019-20.
Biden rides to the rescue of a liberal world order
The second friendly bridge could be US President-elect Joe Biden. The American people have voted decisively against faux, hyper-nationalism and in favor of syncretic politics with a strong assertion of democratic values. This strengthens the case for closer American ties with India, which remains an “improbably poor” but vibrant democracy. At present, India sits, somewhat uneasily, amidst America and its allies, whilst confronting an implacable China, its ally Pakistan and Communist-run Nepal.
Becoming China’s permanent proxy, punching bag for an unreachable America, is not really in our national interest.
Hopefully, America shall, in the coming months, re-engage more substantively with the global pole position it occupies, whilst shedding the abrasive tactic of China baiting via sanctions and high tariffs on Chinese imports — a move guaranteed to reduce American competitiveness whilst leaving China relatively unaffected.
India should follow by reversing the “copycat” import tariff walls we built last year to shelter Indian manufacturing from cheap Chinese imports. Showing conditional interest in joining the Regional Comprehensive Economic Partnership, or RCEP, would be a substantive step forward which would be widely recognized as a bold, decisive step.
As a fledgling manufacturer and exporter, we must make our manufacturing globally competitive by lowering the interest cost of loans, reduce transaction and transit costs, provide cheaper electricity related to the cost of supply, reduce the uncertainties of project implementation and make our tax regime transparent and fair rather than punitive and extractive.
BJP settles into national governance for the long haul
Our third friend is the BJP, which has settled more comfortably into national governance for the long haul. The year 2021 should witness a new self-confidence which will show up in toning down the radical nationalism of the first six years. This aligns with the new consensus in America, towards a broad-based democracy and concern for minority rights, within the broad rubric of national interest. Soothing ruffled feathers amongst the minorities aligns with closer ties in the trade-heavy Middle East and strategically with our immediate neighborhood.
Business must step up and build “socialized” market value
Finally, one hopes that the business community will step up to relieve the enhanced fiscal stress from social protection outlays by cutting corporate fat but retaining employees, to reduce job losses. The government could continue the scheme of compensating the employer for their Provident Fund contributions till 2022.
Corporate tax was reduced to 25 per cent in 2019-20. Income tax on individuals should similarly be reduced, whilst doing away with the savings/investment related exemptions. The tax on interest, dividends and capital gains should be made level at a low rate to end administered distortions in the return on capital employed by investors. Leaving money in the hands of taxpayers catalyses consumption, investments in stocks, savings in banks or in corporate debt and feeds back virtuously, as government revenue.
The government will have its hands full, just rolling out the vaccine and managing the Chinese. Citizens and businesses can help, by exercising our rights in a lawful manner — the ongoing rich farmers’ agitation is a good example of disciplined dissent, as was the 2018 Nashik-Mumbai “Long March”.
Government servants could adopt a more meaningful service orientation, for example, by implementing the spirit of the Right to Information Act in practical terms. Businesses and shareholders need to proactively enlarge the “notional bottom line” by adding back enhanced employee welfare to net earnings, to calculate the true socialized, market value of a company.
All this is wishful thinking from the lens of the past. But it can become real, if we listen to Simon and Garfunkel and view the future from a bridge built on empathy and solidarity.
Extracted from the Asian Age December 31, 2020 https://www.asianage.com/opinion/columnists/301220/2021-a-magical-bridge-across-troubled-waters.html