Onions and GST: Making sense of Modi's 'New India' and Congress politics

Image representational: file photo

Travelling out of Indore on the highway towards Ratlam last Monday, I saw a mile-long line of trucks loaded with onions. My companion pointed that many of these trucks did not have Madhya Pradesh registration numbers, indicating they had come in from neighbouring States. The business model was simple, as explained to me by a local trader. The State Government was procuring onions at Rs 8 per kg and it was being sold at Rs 2.30 per kg to the mandis or for export to other States by rail or truck. So, there was a clear arbitrage margin of Rs 3 to Rs 4 per kg after paying for expenses. “So much of onion is not grown in Malwa. There is no doubt that most of it is from Rajasthan”, my associate claimed. The administration was active in facilitating the movement. Indian Railways was allotting rakes on priority for shipment to other States. As godowns were overflowing there was talk of subsidised sale of food grains as well to accommodate the piling stock of onions. A vicious spiral seems to have been set in motion since the Mandsaur agitations. Shivraj Singh Chouhan’s Government has been clearly put on the back foot. However, not one person I met on this trip thought the agitations were genuine. “Why only Mandsaur (one of the richest belt)?” they ask. Admittedly, they are mostly BJP supporters in Malwa. All of them feel the flare-up could have been easily nipped in the bud but the administration took it easy. The Chief Minister himself, probably due to lack of proper intelligence, had underestimated the damage potential. Had he intervened earlier the situation would not have come to such a pass. People also scoff at the suggestion of “demonetisation effect”. I had travelled through Malwa in the course of business soon after demonetisation and had written in a financial paper how these areas and Madhya Pradesh at large was one of the least affected by demonetisation. A builder in Ujjain said prices of apartments had gone up by Rs 500-600 since January in the area. Practically everyone I have met or spoken to in Madhya Pradesh believes the crisis was artificial. The common version is, it was engineered with the help of rented miscreants, abetted by politicians from both sides of the spectrum, and funded by the local opium mafia to smuggle out the unaccounted extra harvest from a bumper crop. However, the idea is not to deflect attention. Since Mandsaur, several opeds have appeared by erudite experts on the plight of the farm sector. The issue is farm profitability. The clamour for loan waiver, abetted by political parties, only tackled the symptoms without going into the root of the problem. As we are already beginning to see, after the spree of loan waiver by States, in an atmosphere of competitive populism, the clamour for fresh loans has begun once again. It can be said with reasonable certainty that this will lead to another cycle of waivers by subsequent Governments. Thus, unless tackled at a fundamental level, farm loan write-offs will become as much a part of the agricultural business model as wilful loan defaults and NPAs are to industry. However, such discussions are missing from the daily dose of TV debates or the front pages of newspapers. Certainly a lot has been wrong with the BJP Government’s record so far. I am sure, like me, many moderate Right-wingers, who had rooted for Prime Minister Narendra Modi, do not agree to everything he says, does or prescribes as policy. This was apparent in the three-years of Modi Sarkar report card, prepared by many middle-of-the-road pro-BJP analysts. However, neither the opposition nor the media is allowing a climate for meaningful debate. While accusing Modi of governing through “event management”, the Congress, as the main opposition party, seems caught up in creating photo opportunities for its leader rather than engaging the Government in constructive dialogue. Rahul Gandhi’s preference to be seen as a street fighter rather than a cerebral leader makes one wonder if he knows his onions after all. The same mindset was on display at Friday night's GST rollout. Among the Opposition parties who chose to boycott the ceremony, the Congress claims to be the original author of GST while the Finance Ministers of two others (CPI(M) and TrinamoolCongress) had played key roles in shaping the Act and building consensus. The reasons for their last minute change of heart were difficult to understand. It was not clear if they were opposed to the concept of GST itself, its structure or the timing of the rollout. There was nothing that could not have been resolved by talks instead of posturing. The Congress seemed peeved at the idea of a midnight session of Parliament, which they felt was an infringement of its 1947 “Tryst with Destiny” copyright. The tactics was not lost even on the lay public. Everyone understood it was just an excuse to distance itself from the act in the hope of a 'we told you so moment' in future. In the process they allowed a virtual walkover at a historic moment to the ruling coalition and Modi. The future could well prove that the Congress and its allies were right, for which Modi may have to pay a heavy electoral price. But, by pressing on with GST on the scheduled date, despite odds and opposition, staking his political capital, Modi has clearly shown courage of conviction. Though only posterity can judge Modi’s achievements, history has generally favoured the brave. (Author is a writer and popular blogger on current affairs. His Twitter handle is @SandipGhose) Disclaimer: The opinions, beliefs and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs and views of ABP News Network Pvt Ltd.