For the last couple of months the biggest narrative in India has been the near precipitous fall of currency and the dark clouds gathering over the economy. And this is when there are ample experienced hands at the deck. So many captains and yet no glories to speak of. Leave aside glories, the ship looks as if it has hit its underside on the rocks and is rapidly filling water. How could we have come undone so fast? See no further for what went wrong. It was not any action that caused it, it was years of inaction. It is just plain complacency. The spectacular growth mostly export fueled during the UPA-I years gave them enough reason that all is a-ok and growth will continue like this with any impetus. You know what, any captain can sail on a favorable wind. Even if you don't do anything, the winds pushes the ship forward. This is what actually happened. As long as global economy was strong, we were going mighty fast.
Then 2008 came and the bubble burst and our ship hit rough waters. But the so called Jack Sparrows of our economy kept repeating that all is well and we will soon return to 8%+ growth rates. No course correction was ever done. I always believe the Government is not their to take decisions that please the people. Who does not want subsidized LPG? Who does not want freebies? But can a country with very limited resources work like that. Can Government take decisions based on populist pressures? Or do nothing and hope things mend themselves. And all this has led us to where we are. Inflation is not really under control, growth rates that is sputtering, currency in free fall, foreign capital fleeing the shores and no new investment being done.
The problem is not global economy now for US despite of such a massive base grows decently while we manage measly growth on such abysmal economic standards. The problem is not even falling currency for that is a symptom of the malaise not the actual disease. The fever tells you that probably you have a bigger problem somewhere. What we have here is a perfect case of a self-afflicted wound. Policy inaction, multiple power centers, fiscal profligacy and just plain over-confidence. I don't pity the captains of this ship. They probably don't need it anyways. They will still manage well in their Lutyen's bungalows. We would also manage well. Probably one or two less movies or eating out in a month. But it won't be a easy ride for the countless millions joining the workforce every year or those at the margins of society. Couple of percentage of less growth will ensure millions will be left jobless. This minuscule growth will be a jobless growth for the industry will not hire unless they see momentum picking up. The powers that be will still fiddle over the definition of poverty line and how they moved millions of unwashed masses to so called "middle class". And there will be no easy way out of this troubled waters. No warm winds to help us come unstuck. It is going to be many years of discontent.
No comments:
Post a Comment