– Vedant Singh Vishwanath
Today, as of 26th April 2019; while a billion Indians reach out to make their vote count in the largest democratic exercise of its kind; many question whether the ethos of this democracy has died out.
Is it a new era in Indian history, where freedom of expression is muted by a biased press ?
Does secularism still mean anything to the largest democracy in the world ?
But most importantly, is this nation going to last as a democracy ?
As the political wing of the RSS, the BJP, seems to be coming back to power; is institutional independence still something that matters to this country?
This is a question that most Indians would hesitate to answer. The reason is simple, economic data shows that the ruling party in our country, has boosted economic growth to much higher levels than previous administrations. Now in a situation wherein one feels there is no one else good enough to run a country; the mind becomes blind to a person; especially a person with oratory skills as keen as the man in question; the man who showed India a vision; Narendra Modi.
Over the past few years: Mr. Modi’s administration has tried to attack the independence of two quintessential institutions; the RBI(Reserve Bank of India) and the most important organ of any democracy; the judiciary.
Being a high school student, with a deep-rooted interest in Economics, I’d like to start with the Reserve bank of India.
One of the most controversial developments in recent months has been the conflict between the government and the chief banking institution of the country. These disagreements were on three main fronts:
1] Interest rates
2] NPA(Non Performing assets) classification
3] NBFC(Non-banking financial Institutions) relief
The Indian government under Mr.Modi and his finance minister Mr.Jaitley, were unhappy with the RBI not making interest rate cuts and even increasing them; having an inflation focussed approach. This however falls under regulation which is clearly in the RBI’s jurisdiction.
Further, the government found the reserve bank’s circular on the classification of non-performing assets (NPAs) and norms of loan restructuring overly harsh; given that it had dire consequences for certain state lenders’ in the short term.
The last major trigger to the situation was that the government wanted the RBI to give a large amount of money for relief of Non-banking Financial institutions; something that the RBI did not see fit. This is something many Modi supporters say was a good stance by the government however the RBI has conducted a study to determine the nature of the reasons for the liquidity crunch and finally devised a plan to use the ideal devices for liquidity. This is an extremely difficult concept to understand or explain, but you may read the Economic times article about Viral Acharya’s speech, talking about the steps that RBI took in this direction.
I would like to explain the overall consequences of the government’s stance was. These were all moves that would have and now will inflate GDP growth numbers(which are already inflated in Narendra Modi’s term due to the new GDP formula that was introduced) in the short term to make it look as though the government was helping the Indian economy charge ahead like never before. This was something very similar to what I believe Mr.Trump has done in the United States.
Also, if I might add, it is not just intent to kill institutional independence; the BJP government has done it. Under the new RBI Governor (Shaktikanta Das), most of the demands that had been made by the government have actually become a reality; at least partially, if not wholly.
This was done after one of the greatest RBI governors that India has ever had, was asked to leave at the end of his term, his successor Urjit Patel also made a mysterious exit; with a very sudden letter of resignation. This was the perfect opportunity for the government to instate a puppet governor to get their job done. No wonder the RBI, very soon after Mr. Das came into the picture; cut their buffer capital and freed up money for a dividend hike.
The judiciary is not my forte, but I find it unfair not to highlight that never before since the days of the Emergency has there been so much conflict between the judiciary and the executive. The government has picked up fights with the collegium over appointments and even wished to reform the entire process of judicial appointments; an attempt that was thankfully struck down by our apex court.
In India, the Government does get a partial say in the appointment of judges; which is completely justified, but what keeps the judiciary independent is that the government cannot dismiss judges at will; which is what they have directly or indirectly tried to do.
I am afraid I can’t dwell too much on this one issue, so I’d like to say one more thing before I leave you; and I’d like to put it in a way, such that you can very easily understand the consequences.
Before you go out to vote, remember that our planet has gone through two world wars, because of men who wanted more power than they needed; so let’s realise the value of peace and liberty, as our forefathers once fought for a democracy that sees all as equals; let’s not fight for one that ruins the fate of our motherland.
Picture credits:
dnaindia.com
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