Jaitley’s Presser: Not Nationalism, It’s Economy, Stupid!

The Quint’s Sanjay Pugalia analyses the reasons why Arun Jaitley held a press conference on the state of economy.

Finance Minister Arun Jaitley. Image used for representational purposes.

(Photo: The Quint)

By strongly defending its track record on the economy, the NDA government on Tuesday, 24 October, admitted that it is not politics but 'it's economy, stupid’ as far as next Lok Sabha elections are concerned.

In immediate terms, clearly Gujarat election is heavily weighing the government's mind down. This was evident when it held a one-of-its-kind press conference.

Finance Minister Arun Jaitley, flanked by his top officials, bombarded with data via a long slide presentation to say that India was the fastest growing economy, and due to big reforms like the Goods and Services Tax (GST), there may be short-term effects but they will be beneficial in the long term and the government would respond to challenges appropriately.

Union Minister for Finance Arun Jaitley, with top officials of his ministry, after a press conference in New Delhi on Tuesday, 24 October. (Photo: PTI)

The peg was the Cabinet's decision on Tuesday to spend Rs 5.35 lakh crore on a new "Bharatmala" plan for highways and a new repackaged Rs 2.11 lakh crore recap plan for stressed PSU banks.

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The press conference went beyond the usual Finance Minister detailing on macro economic numbers; a detailed presentation was given on various infrastructure projects – from roads, railways, and ports to Gramin Sadak yojna, not to forget Saubhagya and Ujjawala schemes. While doing so, the Secretaries appropriately switched to Hindi.

Recapitalisation of banks came as a smart mix of bonds of Rs 1.35 lakh crore that the banks would buy from the government, and the rest Rs 76,000 crore would be raised from markets and budget support.

Experts would see this as technical recap and not real infusion of hard cash. The Finance Minister said that the nitty gritty of the recap bond was still being worked out and would be shared later.

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Jaitley concluded the presentation by saying that the banks would be asked to lend to the MSME sector. This sector is facing severe problems and are electorally very critical for the BJP.

In fact, during the entire press conference, it was emphasised how these measures would create jobs, create demand, and kickstart businesses, and be helpful for the common man (read voter).

Barring the bank recap plan, the 100-plus minute press conference was a recap and reiteration of various government actions of the past. All assumptions are based on hope.

Then why this press conference?

It seems the government has realised that it is always not possible to keep the public chatter as it desires it to be, despite its best effort of pushing hyper-nationalistic agenda laced with religious fervour.

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There is a definite change in the mood of the public and the government has realised that the public has not entirely believed its narrative on the note ban and the GST.

They are now getting disappointed and asking many questions which are purely economic – about jobs and growth. The government might have wrongly believed that its preferred emotional cards are always effective, but it might have also forgotten that the emotions attached with money is much more powerful.

If there is no real feeling of economic well being, if there’s an erosion in income, if there are job losses – it is a fact that the impact can be felt by everyone. No debate is required. Political parties want to believe that the narrative or propaganda they want to impose can always work, but that is not the case.

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This press conference showed that worry. That is why the idea behind this was to send a message that all was well on the economic front.

Clearly, thats not enough. Real work to put the economy on the growth track has to be visible going forward.

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