A Coronavirus depression could become a problem for Modi sarkar in 2024

It is when people started worrying about Ramzan and large gatherings that it struck me. Last year as well, people were performing all sorts of calculations about Ramzan. Those were political calculations, related to the 2019 elections. And that’s when I realized!

We are almost one full year into the second term of PM Modi. How time flies…

By now, it is clear that the Wuhan Corona virus is possibly the biggest event of our times. And possibly one of the biggest events in human history. This is our World War 2.

Needless to say, this is an event that will shake up politics around the world. And upset all previous calculations.

When Modi won the 2019 election, it was sort of taken for granted that he is set to be PM for three full terms. Indeed, the vote share difference between BJP and Congress is now almost 20%. It would probably take a generation anyway for a 20% national vote share gap to be bridged. On top of that the BJP is still rising, in Bengal, in Odisha and even some southern states. If anything, this vote share gap would go up, not down!

But what happens when an unforeseen event, unprecedented for generations, shakes everything up?

The Wuhan Corona virus might just be that event.

Right now, India is doing tolerably well, managing to keep its head above the water. But that’s only until the patience of people and stocks of food last. It is widely expected that the lockdown will be relaxed at least somewhat on May 3.

The real challenge only starts now as India tries to put together the shattered economy. People have neither money to invest nor to spend. Small and medium enterprises are probably at the end of their rope already due to the lockdown. As they slowly limp back, there is no question of speedy recovery. Big business simply does not have the ability to hire. You can ask for stimulus. There probably should be one and there will probably be one.

But stimulus money isn’t real. It’s just money from nowhere. By all means, we should try it in desperate times. But there’s no guarantee it will work.

The adverse political fallout of such a crisis is bound to start, sooner or later.

Right now, nobody would blame PM Modi for the pandemic. Obviously, it’s not his fault. As for managing the pandemic,  it’s impossible to do get everything right in a situation such as this. But in broad strokes, India has definitely done well. It has stunned (let’s also say saddened) our enemies in global media by keeping our death toll so low. This when the death toll in the US is nearing 60,000, with over one lakh dead in Europe.

The political fallout is not now, it’s probably a year or more down the line.

When a calamity happens, the ruling incumbents usually get a slight bounce in approval ratings. After all, people look to them as saviors. In fact, if Hurricane Sandy had not struck in late 2012, Mitt Romney would probably have defeated President Obama in the election.

The problem is with a calamity such as this Coronavirus, whose impact could last literally for years. Some say it could be an entire decade. The Great Depression of 1929 lasted for an entire decade. There is literally nothing else in human history that this current crisis can be compared to.

Imagine after a year. If the economic engine is at a standstill, people have no jobs, nothing… sooner or later, they will turn against whoever is ruling. Not specifically because they think it’s their fault, but due to outright despair. Even if it means shuffling chairs on the deck of the Titanic. The argument is going to come : well, the current regime isn’t working, so why not try literally anybody else?

Let me give you an example. Remember the European crisis from 2011 and the PIGS countries (Portugal, Italy, Greece and Spain)? When the crisis struck, Spain was ruled by the leftists. Due to the crisis, the leftist government had to adopt emergency austerity measures which were extremely unpopular. The right wing capitalized on this anger to win a landslide victory. The ruling left suffered the worst defeat for any sitting Spanish government in history.

Could the new government manage the situation? Of course not! The situation was far beyond anyone’s control. In the 2015 election, the sitting government was again wiped out, in another “worst ever in history” defeat! Two elections like that, back to back.

Did people really switch between ideologies that quickly? Did they compare, contrast and draw informed conclusions based on evidence? Of course not!  This was pure desperation at work. People had lost control of their lives and so they did the only thing they could still control : change the government.

If the economic crisis continues, the “spin the wheel” argument could make sense to a large number of desperate voters in 2024.

This could well become the threat for Modi sarkar in a year or two. The Corona virus induced depression could continue for a long time. As much as we may wish for a speedy disappearance of Corona and a quick bounce back in the economy, there is no reason to just assume the best will happen. We’re just some bits of DNA on a rock that is hurtling through space which is billions of times bigger. As Carl Sagan would have said, “pale blue dot.” We matter very little in the grand scheme of things. No reason to assume that good things will happen to us, like at the end of most movies.

What could be done to guard against this? Well, we have the example of FDR and his “New Deal.” The New Deal gave jobs to people as part of a massive public works program. This could be the moment when India gets to building world class infrastructure that we have all dreamed of.  It is a bet on the future and it could very well go (very badly) wrong. But, without such drastic measures, we’re probably going down anyway. So what’s the harm?

In one sentence, all I am saying is this : the government should take a gamble and spin the wheel on stimulus, before the electorate spins the wheel on the government.

12 thoughts on “A Coronavirus depression could become a problem for Modi sarkar in 2024

  1. We are lucky that the next election is four years away. Our voters will have plenty of time to witness what happens around the world. As is, it seems India will stay well ahead of the rest of the civilized world on this Corona matters. If until 2024 the economy is still down due to this Coronavirus, and the voters vote for change, at the best the opposition will be able to do is Khichdi Sarkar. The voters will regret right away. Let us hope this Oxford vaccine works and controls this pandemic earlier.

    By the way, 47 percent of Americans live on hand out comment did Mitt Romney in. When that comment came out that was it for Mr. Romney.

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    1. Too much is being expected from the vaccine. Our own Serum Institute is working on one, and in a best case scenario – might be able to launch it after about a year ! They have indicated that they will price at about Rs 1000 per shot ! So who will pay if every one has to be vaccinated ? The government ? Most people will expect that – and as always, bhai jaan’s will expect some free mutton Biryani too after the vaccination 🙄

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      1. I have a strong feeling that sooner than later, the world will accept this a very tiny fraction of one percent of deaths per the population and move on. Coronavirus will go away from the headlines and somewhat uneasy clam will take over the world. As far as the vaccine and its price are concerned, there are vaccines available for various types of flu. How many of us spend money on those vaccines? We know there is no medicine, no treatment against Coronavirus, yet more than 90 percent get cured because of our white blood cells win the battle. In some cases, Coronavirus win, and the patients stop breathing but the ventilators help them breathe and give their white blood cells some more time to defeat Coronavirus.

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  2. Sure, but it is not likely that the Modi 2.0 government has the will or inclination. Their pusillanimity has been on display for a while now – in dealing with the privileged minorities. The government has not been able to enforce lockdowns and not been able to rein in rogue governments especially in Maharashtra and West Bengal. Likely that the financial capital of India is going to be under lockdown far beyond 3 May – because they cannot control the you-know-whos. The losers are the ordinary law abiding citizens.
    Not only that, it is one thing to chant “5 trillion dollar economy” and “Make in India” and “Be ready to woo companies quitting China”, quite another to implement it. I recently read the news on twitter that out 30-50 odd companies that have left China, only 3 decided to set up shop in India – the maximum went to Vietnam and Taiwan.
    With incompetent or less competent ministers heading the finance, law, HRD and other key ministries, what is the likelihood that India would be quickly able to gear up to “lure companies quitting China”?
    And it is not just the economic front, there is also the disenchantment with Sabka Vishwaas. A chill had run down my spine the very day PM Modi added “Sabka Vishwaas” in his victory speech for 2019 elections!
    In the last many posts, I have written about the silence of PM Modi on Palghar lynching. Well, he has spoken up today and made everybody know his priorities – (Disclaimer – Irfan Khan was a great actor and a good person despite his religion and his loss should definitely be mourned. People are only noting the priorities)

    Also sample more whining from Sambit Patra. Just look at the replies he has got for his whining.

    As Prof Vidyasagar also said, in his friend circle, all staunch BJP supporters, everybody has nothing but contempt for Amit Shah. Well, I can be added to that list of staunch BJP supporters.

    This government is absolutely clueless on everything. The goodwill that PM Modi had garnered by imposing early lockdown will soon be dissipated – already has to a large extent since the grovelling of Ajit Doval before Maulana Saad at 2AM and the subsequent escape of Maulana Saad. It’s been a month now, BJP Govt still can’t find Maulana Saad and their leaders are whining over Arnab Goswami being interrogated for 12 hrs.

    Sure, the lockdown will be lifted, but aren’t we all already worried about how Single-Source has pervaded our complete supply chain by its Halalonomics. In my opinion, the lockdown thwarted their plans of distributing Corona Virus to Kaffirs, and they are just biding their time for the lockdown to be over. And heaven forbid if we are caught voicing our plans to boycott them over these legitimate concerns. The first ones to rush to file FIRs against us would be the BJP leaders. Look how they have served show-cause notice to their own MLA from UP.
    For that matter, even I can’t do the boycott – as I had mentioned in my earlier post, the grocery shop within my residential complex is run by Muslims and due to lockdown we have no option but to depend on them.

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  3. Any stimulus is basically printing money. This will cause inflation and a shift to assets like gold. Which in turn will cause money to get locked up and the economy to suffer. This is what the smart people did when UPA printed money after 2008 recession – moved to gold. T

    One solution might be to cut taxes to boost consumption. Today, a car that has a manufacturing cost of Rs 5 lakhs is sold at Rs 10 lakhs because of GST, Road tax etc. Now if the taxes are slashed for say a year, consumption of such goods can increase and help retain the jobs in that sector. Income tax concessions could be given if people spend the concessions.

    It would be good to free up temples and have them use the temple donations to create employment and improve the local economy. This will motivate people to donate. Today there are many who stopped donating because the money goes to secular causes.

    BJP needs to be wary of being secular in these trying times. Many Hindus are already cross with them and if they continue in their secular ways, they can loose support pretty rapidly. Human behavior in times of stress is different.

    This is an opportunity for BJP to become truly secular and make India a dharmic nation. A dharmic nation will soon become a prosperous nation. Adharma creates poverty. Since independence India has had mostly adharmic leaders who have created a mess. Modi can be different.

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  4. The economy is one area I am beginning to feel disappointed with the BJP government at the centre. I have waited…and waited. But all we have seen are dribs and drabs of policy.

    In a larger sense, if we step back, the party itself cannot be blamed. Much as we wish it were not so, the fact is India is really “administered” not by politicians but by civil servants. And at the end of the day, the IAS wins. Theirs is a deeply entrenched cadre that is largely of a particular ideology: management by fiat, management by government, management by infinite rules. They cannot be expected to see beyond their comfy hidebound environment and let loose the economy to the creative genius of the people. That is why true market economy India is not and struggles to head towards that light at the end of the tunnel. The bureaucracy prefers control and therein lies the paradox – Nehruvian economics still reigns!

    Mohandas Pai has co-written quite a few articles (on Swarajya) that lays out clearly the way to tomorrow in these very uncertain times. Unlike that fakester on Indian Express – Swaminathan Aiyar – who, like most anybody (PC, Clown Prince, Rajan, et al) have criticisms galore but no solutions, Pai has a clear set of To Dos for the government. Unfortunately, we may never see the government actually adopt any of them. They are too radical, as Pai himself admits.

    But this once-in-a-lifetime event demands just that: a radical prescription that throws overboard all conventional safeguard metrics adopted earliler such as fiscal probity, inflation proofing, etc etc. We are not alone; worldwide, all economies have gone for a toss, possibly China excepting. There is very little inflation globally today and money, actually, is aplenty. If we know how to get at it with some creative genius.

    Unfortunately – that’s where our IAS fellows will prove to be the grain of sand in the shoe. They will nix it. And we will continue with “safe” methods, eschewing the brave ones we could actually get away with. If we did that, in four years everything could be turned around and 2014 for the BJP would actually be a cakewalk. But…. I think we will settle for less and this singular opportunity would have been missed.

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  5. As far as Modi is concerned, he is content with having got 10 years to rule, and hence may not be bothered if he loses 2024 LS election.

    He will no doubt use a Brahmastra of universal income DBT a year before the election and will try to win the election. LS 2019 win essentially came from Rs 2000 × 3 DBT to farmers.

    If at this juncture of economic slowdown staring at us, he is unwilling to change FM & other vital ministries, we can conclude that he is confident of winning election single handedly by his social benefit schemes.

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  6. Dear CW,

    Well… these are difficult times. If Modi thinks about 2024 instead of handling the current situation, he will loose all my respect. However if the better handling of current situation and the after affects eventually helps him in 2024, well that’s fair enough and even better.

    I see many are whining about everything. Is it the continued lockdown having effects or are we always like this? Cheer up guys, please do. Even with daily increasing counts we are in a very better place compared to others. Understand that.

    The Tablighis and the lynching mob of sadhus and everything is a trap. If Modi falls for it and start reacting, there will be religious riots across the country. Do we want that? If we want that, the other side is eagerly waiting for that.

    The current virus situation fits into more of a bio war category than some accidental viral outbreak. Don’t we see China is flexing its military muscle when every other country is trying to cope with the virus. If the situation continues, within few months many nations will be in a very bad state that there will be anarchy, riots and civil wars. Then China will simply walk in with out even need to fire a bullet. The last thing we need is a reason for internal fight.

    On defense front, observe carefully, there is a lot happening. The Indian military is missing from the scene on this COVID19 situation, where normally they stand in front line in helping with other calamities. There is a reason to it..they need to unaffected to face the enemy in coming months.

    To be honest, it doesn’t matter if you approve or not of Modi’s methods for now. All you need is to stay home and stay safe.

    If anyone here have a comprehensively better idea, they can happily share it with all of us. The one off suggestions like to reduce tax or increase tax.. is not a plan.

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  7. I agree with Ms. Panda. She has said everything I wanted to say and better.

    As for Kaushik’s comments, in six years Modi hasn’t reconstituted the UPSC selection process or amended the syllabus. If the candidates need to toe the Marxist line of thought in order to get selected, do we suddenly expect them to change their way of thinking once selected?

    The danger to Modi in 2024 is not the economy. It is that people will believe that BJP is good only to sit in the Opposition — and will oblige them.

    To repeat yet again, the biggest betrayal has been on Article 370, where nothing has been changed.

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  8. Interesting thread on the Communists in India.

    The Communists come in more flavors than icecreams and this brings difficulty in identifying them. 90% of NGO’s are probably just communist outfits. In the thread look at the outfits the CIA named in 1962, since then there must have been a huge proliferation

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  9. “Soft government, trying to accommodate everyone will lead to big mischief”

    Modi should heed the wise words from LKY and stop trying to accommodate the conversion mafia

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    1. LKY’s message is in the reply to above tweet but posting it separately so that it is not missed

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