The former chief economic advisor to the Indian government blamed the Centre’s ‘disproportionate focus’ on big firms for the crisis.
Economist Kaushik Basu on Friday expressed concern about unemployment in India and blamed the Narendra Modi government’s “disproportionate focus” on big firms and its alleged neglect of smaller ones.
Analysts now have to rely on private sources and indirect evidence to understand the jobs situation as the government has “withheld” official data, Basu said in an opinion article for The New York Times. The article was titled “India can hide unemployment data, but not the truth”.
Basu is a former chief economist of the World Bank and served as the chief economic advisor to the Indian government from 2009 to 2012.
A report in Business Standard claimed on Thursday that a study allegedly kept buried by the government found unemployment at a 45-year-high of 6.1% in 2017-’18 – the first full year after demonetisation. Two independent members of the National Statistical Commission, which prepared the study, resigned earlier this week, reportedly in protest against the government for not publishing it.
Basu wrote that such “information blackout” is uncharacteristic for India, which has been praised in the past for “playing a pioneering role, globally, in statistical data collection”. In the absence of official data, the findings of private studies have been alarming, he said. Basu cited data from the Centre for Monitoring the Indian Economy and the Azim Premji University.
“These effects aren’t just the accidental results of the government’s decision, say, to ban certain currency bills in late 2016 or to transform the indirect tax system into the new Goods and Services Tax,” Basu wrote. “The Modi government’s economic policy has been disproportionately focused on a few big corporations, neglecting small firms and traders, the agricultural sector and most workers. The results are now showing.”
Basu said demonetisation proved to be “terribly misguided”, and the introduction of the Goods and Services Tax was “a move in the right direction but poorly executed”.