Aakar Patel | If you do not admit there's a crisis, you can't solve it

If I do not acknowledge that I have a problem, then I cannot solve it. If the problem is a minor one, this is less consequential and does not affect me beyond a point. It is only an irritant that I can continue to ignore.

But if the problem is a major one, and if the problem affects not just me but many people around me, then ignoring it must have a sound reason. Ignoring it must in some way be more important than addressing it.

The sale of cars in India has not grown for the past five years. The number of cars bought by Indians in 2015-16 was 27 lakh units. The number of cars bought in 2019-20 was 27 lakh units. India’s middle class is either not growing or not spending.

The government says that stagnating car sales is not a problem because young people prefer to use Uber and Ola cabs. The United States sold two crore cars last year. Uber and Ola (and its various equivalents) do not seem to affect any other nation.

The sale of two-wheelers in India has not grown for the past four years. Altogether 1.7 crore units were sold in 2016-17, and 1.7 crore units were sold in 2019-20. This is the vehicle of the lower middle class, the size and consumption of which has not grown for four years. What theory the government has for this we do not know as it has not been acknowledged that there is no growth.
Commercial vehicles have not shown any growth for the past four years. Sales were seven lakh units in 2016-17 and seven lakh units in 2019-20. This includes vehicles like trucks, heavy lorries, tankers and small tempos that carry products either to the manufacturers or to the market. The real meaning of four years of zero growth in this market can simply be imagined.

Real estate has shown no growth over the last four years. Indians bought Rs 2 lakh crores worth of real estate in 2016. They bought Rs 2 lakh crores worth of real estate in 2019. India’s exports have not grown for six years. The country exports the same quantity that it did when Dr Manmohan Singh was Prime Minister. India was exporting about $300 billion a year when the UPA-2 left office. It exported about $300 billion in 2019-20. Why is this the case? We do not know because the government does not speak about it. When imports into India fell more than exports out of India, the government celebrated the moment as a singular achievement.

Employment has not only not grown in the past six years, it has actually gone down. A report produced by the government showed it to be at over six per cent in 2018, more than at any other time in history. Why are Indians losing employment? We do not know. The government has dismissed the issue and said that pakora sellers and Uber drivers were replacing traditional employees.
It is true that Covid-19 has affected India’s economy deeply and will continue to do so in the foreseeable future. We are unlikely to get back to the GDP figure that we achieved in January this year for another three years. This means that by the time Prime Minister Narendra Modi’s second term ends in May 2024, we will still only be economically where we were in January this year. The problem is that where we were in January this year was not a good space. All the numbers that have been referred to above are before the Covid-19 pandemic’s outbreak.

The stagnation in our economy had happened before the lockdown and has nothing to do with our current crisis. If and when we are able to overcome the Covid-19 related problem with our economy, we will go back only to the earlier problem.

India’s GDP growth declined every quarter for 10 quarters before Covid. Why? We do not know. It could be one reason, and it could be many reasons. But if we do not acknowledge the issue at all, we will never solve it. You can only think about, discuss and then implement corrective measures if you acknowledge that corrective measures are needed. If you carry on like nothing has happened, then deep problems cannot be fixed by themselves and they won’t go away. The government went from saying that India was the one bright spot in the world’s economy and the fastest growing economy in the world, to not saying anything about the economy at all.

The problem is a major one, and it affects not just the Prime Minister but hundreds of millions of people across the country. Ignoring it must have a sound reason. Ignoring it must in some way be more important than addressing it.