Ramaswami: Has It Revived Economy? What this tragic situation brings out vividly is this: Modi government is miserably failing to bring the economy back on track. In fact, it is only using the crisis of slowdown to push through more concessions and gifts to the private sector, especially the big corporate strata, both domestic and foreign. The logic behind cutting corporate taxes was ostensibly that it would help struggling corporates, give them some cash in hand to invest in more productive capacities, and thus, improve employment and generally give a fillip to demand. The dream was that this tax cut would send ripples of happiness and prosperity across the country, and from top to bottom. This house of cards has collapsed within a few months, as was predicted by many and as has been the experience in many other countries. This approach also reveals a completely cock-eyed view of how the economy runs. Because, the problem is not that corporates need money in their hands – it is the people who need it! If people had sufficient buying power in their hands, they would create a demand that would send ripples across the economy, boosting demand all through. That, in turn, would cause industry to expand productive capacities, thus increasing employment. The government could also help by increasing its own expenditure. But the Modi government has gone about it in the opposite way, pushing the country towards a disastrous course. It has become more tight-fisted in its spending, given more concessions to corporates, invited more foreign investors, tried to sell off more of public sector assets and is moving to destroy protective laws for labour. All to help corporates, who are simply enjoying healthier profits, without ploughing anything back in the economy for expanding production or employment. Meanwhile, people are suffering immensely because of these policies. Unemployment continues at around 8% – it has been ranging between 7% and 8% for the past year, causing untold misery. Families’ consumption spending has dipped. Inflation in food items has aggravated this. Jobs have been lost in lakhs. Wages are either stagnating or reduced. And, declining tax revenues have led to cuts in welfare measures at a time when they were most sorely needed.