Our agriculture future!
What professional economists say might not be what the common man sees and says!

Paul Krugman

Paul Krugman

For a change let us look at some of the broad contours of the Indian economy.
To put it in common man’s language: is the Indian economic growth okay?
By looking at the global trends, there is still in the world a slow-down. What we mean by a slow-down? Is it economic sluggishness, no-growth signs or economic recession?

A leading American economist, why there are many in the developing world as well, says that the language of economics is becoming poorer by lacking of the right words and right concepts to capture our reality, our reality of living, earning and spending.

In the last century, in the 30s there was a depression, called great depression. Now, after 2008, it is called simply as economic recession. What it means?

It means the economy is not growing. On the other hands, it is what the common man perceives that really matters for the vast majority of the people, right?

In America, says a noted economist, why the Nobel Prize winning economist, Paul Krugman, the New York Times columnist, who is also widely read in India says, in a recent column that “depression-like  conditions might “persist for decades”.
What is the point of talking in these economic terms?

Recently, Narendra Modi and L.K.Advani have called the Prime Minister not doing well for the Indian economy, though the PM is an eminent economist. Modi, in a rather inelegant way said the same thing. Modi called the PM and FM, both bookish and not with the practical knowledge. Be that as it is.

Now, the PM and also the FM are also showing up their failure on the grip of the economic reality. The PM always talks in terms of rate of economic growth. As for the FM he is more bookish, he simply quotes some percentage of reduction in Current Deficit and also simply gives hopes that next year the rate o growth would be 5 per cent.

This, in contrast to 4.4 per cent growth now, as against last year’s 4.8 per cent is also an indication of what the current reality as seen by the common man.
Says a noted American economist in the latest column in the Washington Post newspaper that, he quotes a recent American survey(we don’t like to name personalities like prominent economists or the exact surveys for not tiring our readers and India is one place where readers don’t believe anything unless you quote names!).However, we want to just quote one more survey (National Journal/Allstate survey-The Hindu, December 3, 2013) that says 53 per cent of common American people think we are still in recession, by which they doubtlessly mean “bad times”.

Now, the point is that when will India really grow?
This is a question nobody asked so far.Or is there any such question being asked anywhere? On the TV channels or in print?

Anyway, we like to cite the American columns that ask such questions. In the last 1930s there were also discussions on the Great Depression. Now, in the new century, after the 2008 recession, such questions are being asked. The new awareness is that economies don’t grow in the past fashion. It looks we have to forget the high rates of growth, the 8-10 per cent growth are no more possible for all countries.

Even China and India that were reporting such rates is no more hoping to repeat the same type of faster growth. It looks we, in India, may be even in China and other countries too there will be a trend for what is called middle income countries.
So, India, let us learn to think afresh and learn to ask afresh newer questions: whether India will remain in the bracket of the middle income countries?
It looks like that.

Some key economic words too seem to have lost their precise meanings. Inflation, unemployment, why even some other words and concepts like expansion, growth, bad times are all new words and with new connotations only we can describe reality. There is definitely unemployment in India. At what rate? In EU they say there is in Greece 28 per cent, in Spain 28 per cent, in Portugal 16 per cent. In the USA the economy is said not near a depression and yet the growth in employment is not what they want.

The exact figures are provided almost on a day to day basis. In India we don’t give such precise figures or descriptions nor people expect or ask for such details.
There is mindless populism. This is not doing much good to the disappointments and  to the consumer psychology.

The consumer confidence index, yes, they publish now and then. But this is not explained well to the common man.There is of course the development index, the human development index. But do you know there is a misery index in the West, in the USA?

The point is that we need a much more precise way to understand the growth of the various segments of the economy. There is a 4.5 per cent agricultural growth this year. But then this is more owing to more monsoon rains, less owing to any agri policy reforms or timely attendance to the various crises like the sugar industry crisis.

We like to give more of economics. But our readers might not relish much jargon.
One more big name in the USA is Lawrence Summers, one time adviser to President Barrack Obama and who was to nominate him as like our RBI governor to the US Fed Reserve.

But he had invited much opposition. Why? Why else? He speaks his mind out. In the USA it is normal, unlike in India where you keep your mouth shut and you get government favours and rewards and recognition!

Lawrence said recently in a lecture: There will be long time stagnation in the world economy!

Diminished innovation, lack of investments, cross border investments, cross border migrations, unfamiliar territories etc.

But there is room for optimism!

The world has become rich, affluent society. There is growth, has been growth everywhere. So, don’t get panicky! New technologies, IT, telecom, Internet, new innovations, new companies like Google, Facebook etc will keep the young engaged and might also lead to new waves of growth as well!

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