Emerging India faces challenges and opportunities too!
Indian economists have all become stereotypes! Timid, withdrawing, self-effacing, till yesterday all leftists and Marxists. Today all liberals and economic reformers!
Understanding economic issues calls for knowledge of our economic history, certain analytical skills and a bold articulation of certain vision! Manmohan Singh’s government, after the mid-term in office, seems to be facing many unsure goals!
Indo-nuclear deal’s future seems uncertain. After Bush and Singh terms in office, what credibility the new American Act will have for Indians? Also for Americans under the Democrats, say! Agriculture is in crisis, inflation on the rise, the PM and his team seems to have lost their nerves!
It is now the new generation entrepreneurs, the IT, ITes, BPO entrepreneurs who have demonstrated that wealth creation is no more a magic, who give us new insights into the emerging India’s new potential. The world today is totally changed. Though USA continues to be the largest economy in the world and its dollar and domestic demand keeps the world economy moving ahead, there are certain structural changes. World economic growth is now broad-based, not just dependent upon the American consumer alone. Emerging markets, including India, Russia and Brazil now account for 70 % of world growth, they accounted 50% a decade ago. China, the number four in world ranking is growing at 10% and its growth matters much for the world. Japan, number 2, is recovering; the world is much less dependent on the US that it used to be. Yet there are concerns, it is part of the economy’s unpredictability and it is the job of economists to predict the future course that gives the economist’s job certain glamour!
Economics is not all about statistics of growth and the balance sheet of assets and liabilities. If concentration of wealth in narrow social segment increases then it creates social tensions and even much violence and riots. If economic growth is unchecked for its excesses, as in the USA, there is pollution, environment damage. The cost of environment damage is high and even China is worried about uncontrolled economic expansion and the deterioration of the environment. So, there are limits to economic growth.
Economic growth has to be broad based; there must be wider participation of the economic growth. This new aspect is not understood by policy makers even in India.
In India somehow economists always enjoyed a cult status. One doesn’t know how this happened. May be Jawaharlal Nehru in his obsession with economic planning sought the help of experts and these experts, in the context of immediate dreams and hopes of Indian Independence enjoyed a disproportionate proximity to the great leader and acquired some extra glamour. I remember distinctly that it was the time of unsuspected glamour for the Soviet Russian experiment in economic planning and even I was so fascinated by the stories about the new hopes raised by Soviet Russia that I decided to travel through Soviet Russia on my way back home from England. So, I took a circuitous route, I booked on the ship that plied between London and St.Petersburg, in fact it was the same ship, I was told, travelled by Krushchev when he came to England! So, I felt adventure in my veins even in those early days when no individual tourist was allowed to enter Russia, except in groups. It is a long story how I managed and I landed in Russia one late night and stayed on board the whole of my stay in that beautiful city till the ship made a return call.
After having turned to entrepreneurship, that too in the Bangalore Silicon Valley, in IT and internet-based media activities, I have come to view the current Indian economic issues in a new light.
But has the Indian people been given a broad vision, a new perspective about the prospects of India emerging as a dominant power in the outsourcing industry segment, perhaps the fastest growing industry segment in India and also the fastest employment generating sector with so much impact on a wider segment of society and economy. There is still a lot of political resistance among the alliance partners, both the Leftists and the regional chauvinist poltiicians, to economic reforms. Why? There is no cohesive economic articulation on the part of our so-called professional economic experts and amateur experts about what are the priorities of economic reforms?
At least Pandit Nehru had the vision. He was the greatest teacher after Gandhi. Likewise, we don’t have any teachers. Our economists, the older they get have become more confused, they know they have changed their earlier doctrinaire stands, first they took a pro-Left, almost Marxist style stands. Now, they would be exposed if they try to rework their pet theories. So, they almost let amateurs like the Finance Minister and others to do the talking. This is almost a wish list from the World Forum, we Indians are slavishly following. No bold initiatives are forthcoming from the PM and his team. Anyway, how is Indian economy is getting integrated with the world economy? That is the most important question now.
Certainly, India is doing well by all standards in economic sphere. Globalisation has helped. The new technological revolutions, IT, ITes, BPO, have all helped. Thanks to globalisation we see the world exports grown, since 1974 doubled, by 24%, world income has doubled since 1980, almost half a billion people have come out of poverty, the number of those living in poverty, on one dollar a day, from today’s one billion to half the figure by 2030.
These are all positive developments and India in particular has emerged as the most sought of destination for outsourcing and this has made India a super start, if not a software superpower!