Until not so long ago, India stood strong and firm among the Brics nations (Brazil, Russia, India, China and South Africa) — an emerging power bloc in the global arena. Its main agenda was ostensibly to promote trade and investment between themselves, while countering the undue interference of the West, especially America in the economic and political affairs of these emerging powers.
Not so long ago, financial analysts projected the country’s growth rate around 9 per cent and foreign businesses were rushing to invest in India. Its burgeoning population notwithstanding, its strength was seen to lie in the youth that constituted 65 per cent of its human resources, its technological competence and knowledge of English where its closest rival, China, trailed by a massive margin. Huge foreign investments poured into the country, the government took credit for having attracted the world’s attention as the new economic centre and everybody was gung-ho about the new global leader of the 21st Century. Some major projects did come up, big-time investors made their piles and the India story kept growing.
What happened then? Did the government take necessary measures to make the environment inviting? Did it cut down on the red tape and the bureaucratic lethargy to promote and accelerate a pro-business environment? Did it improve the roads and power infrastructure to match those of India’s blocmates? Did it ease tax and other regulations to facilitate the kind of growth that was envisaged?
Answer: Very little of the above.
Why did the higher revenues India was earning go into mindless higher spending instead of towards essential fundamentals required for fast-paced growth?
Now the tables are turning; there is a growing loss of confidence in India. The country is the loose cannon in Brics’ armoury. With its politics and economics in disarray, its poor record of literacy alleviation, the increasing divide between the rich and poor and its uncivil civil society, India is fast becoming the weak link in the chain that is Brics. No longer do analysts talk of China and India in the same breath, except to the latter’s detriment. The old controls remain and strangulate sincere efforts at honest enterprise, corruption at every level is so deep-rooted that it is impossible to do business honestly.
My visit to Greece last year showed me that, as in my country, the current sorry state of affairs is largely due to the venality of politicians (politics and political extortion being the fastest growing industry in India today) who have lined their pockets and ensured their future for generations to come with money meant for national development and growth. The riots are similar, the participants the same frustrated youth, the graffiti on walls poking the same malicious ridicule at their elected leaders who, once elected, seem to forget why exactly they were chosen to represent their voters. I could not, therefore, resist taking a photograph of a graffiti on one of Athens’s plazas which read: “Wanted — alive or dead. Greek Prime Minister. No qualifications or brains required, only well connected. Permanent position. Five-star salary payable tax-free, offshore. Apply online or any line. Troika c/o IMF.”
When I see the current situation in India, with its chaotic politics, the glaring absence of political will and decisiveness on vital policy issues, the inevitable economic downgrading by international rating agencies, I wonder if indeed there was ever a boom in the India story. Or was it also a part of the global economic surge that prevailed the world over in greater or lesser measure. And now, when there is a downward-trend, is it not once again part of the same global phenomenon? And, like America after the Great Depression of the 1930s, can India also rise like a phoenix from the ashes of impaired policies and narrow outlook or will it not have learnt from the bitter yet valuable lessons of today?
India must swiftly and urgently take steps to right itself so that global and domestic investor confidence is restored and the country moves along a strong growth trajectory. Many reforms are needed and the maze of controls cleared. The need for subsidies in several areas must be reviewed as to their continuance and freebies to woo voters — a major drain on the exchequer besides encouraging corruption — must stop. Concentrate spending on improving the quality of education which should reach all, overhaul the dismal infrastructure, ensure that power for industrial production is a given — in other words, concentrate on growth. The Indian dilemma today is that while millions of its people have climbed out of poverty, the gulf between the rich and those still struggling is getting wider and deeper. The growth story never managed to touch the most needy in rural and urban India.
Vimala Madon is a freelance journalist based in Secunderabad, India.
