Article 370, nationalism will likely trump economic distress in the Haryana elections

15 October 2019
The ruling Bharatiya Janata Party government in Haryana is banking on the popular support for the centre’s abrogation of Article 370 to retain power.
The ruling Bharatiya Janata Party government in Haryana is banking on the popular support for the centre’s abrogation of Article 370 to retain power.

Pankaj Gupta, a managing partner of Paisa Worth, a medium-sized enterprise in Haryana’s Panipat city, is a worried man. The festival season—October to January, spanning Dussehra, Diwali, Christmas and New Year—is usually the busiest time of the year for him. These four months account for eighty percent of Paisa Worth’s annual sales. The company sells bed sheets, carpets and doormats, and has clocked sales of around twenty crore rupees during previous festival seasons. Not this year. As he peered over sales orders on his laptop, Gupta told me that business was down “by 60 percent and we will be lucky if we can sell five crore rupees worth of goods.” This year, the company had to lay-off nearly eighty percent of its employees, and Gupta was doubtful whether the firm could afford to pay the annual Diwali bonus to the remaining 70 workers. “Business is down, my revenue is down and my blood pressure is up,” Gupta said, as he lit a cigarette and took a deep drag in his air-conditioned office.

On the other side of the city, Shyam Singh Malik echoed Gupta’s concerns. Malik runs a medium-sized enterprise that manufactures textile-weaving machinery. His business infrastructure includes two manufacturing units, two spare-parts trading units and a foundry. Malik told me that his business was down by seventy percent, primarily because “demonetisation and the Goods and Services Tax” have had a crippling effect. “There is no liquidity in the market because of GST and we are finding it hard to raise capital,” he said.

Twenty kilometres from Panipat, in the town of Samalkha, Kuldeep Arya had a similar tale. Arya is a manufacturer of nuts and bolts, and has been in the business since 1994. He said that this year, his business was facing the worst downturn he had ever seen. Arya told me that before the GST, “my company’s credit limit at the bank was Rs 30 lakh,” but he had been forced to raise it to Rs 1.1 crore because there was a liquidity crunch in the market. He, too, blamed the GST—his firm’s monthly turnover is around Rs 50 lakh and he has to deposit Rs 9 lakh as GST by the twentieth of each month. “It’s the same with every company. The liquidity is being deposited with the government and there is nothing in the market.” Arya has to pay a GST rate of 18 percent, significantly higher than the five percent value-added tax that he used to pay.

Panipat is a major textile hub. According to a report by the union ministry of micro, small and medium enterprises, in the financial year 2015-16, Panipat’s textile industry employed 33,993 workers in a total of 2,369 units. However, the slowdown in the Indian economy, triggered by the economic policies of the Bharatiya Janata Party at the centre, has had a debilitating effect on Panipat’s textile industry and consequently, its workers.

Akash Batla, the director of a placement agency in Panipat, told me that there was an unemployment crisis in the textile industry—jobs in the sector have dried up in the last one year. “Earlier, we used to get ten to 12 resumes every month and we were able to find jobs for them. But ever since the recession has started, we have been getting 20–25 applications and we are unable to find jobs anywhere,” he said. Statistics provided by the Centre for Monitoring Indian Economy, a business-intelligence firm, confirm Batla’s assertion. Between May and August 2019, the unemployment rate in Haryana was the second highest in the country, at 21.38 percent. In the 20 to 24 age group, it stood at a staggering 65.55 percent.

Tushar Dhara is a reporting fellow with The Caravan. He has previously worked with Bloomberg News, Indian Express and Firstpost and as a mazdoor with the Mazdoor Kisan Shakti Sangathan in Rajasthan.

Keywords: Haryana State elections 2019 Article 370 economic slowdown BJP Congress Indian National Lok Dal