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Indian economy – Complacency?

Why waste time with ‘small’ projects for ‘small’ people that hardly add upto any top-line or bottom-line figures?

The fallacy of 'growth'  |  Cartoonist Nick Anderson; source & courtesy - cartoonistgroup.com  |  Click for image.

The fallacy of ‘growth’ | Cartoonist Nick Anderson; source & courtesy – cartoonistgroup.com | Click for image.

one can understand why everyone in India may be getting a little complacent and even smug. It is almost as if investors and policy-makers are convinced that this rosy outlook is baked in the cake, so to speak. If it is going to happen and India is going to march ahead anyway, why take hard decisions? Does one really need to battle vested interests when 8 per cent or even 9 per cent long-term growth is assured? (via Akash Prakash: Complacency Setting In).

Out of place

Importantly, the Indian economy (say observers) is getting strangled by

the increasing politician-industrialist nexus … beginning to resemble Russia, with the same characteristics of crony capitalism and huge wealth transfer from state assets to private ownership. India may not like hearing it, but in certain sectors, its institutions are too weak to face off against corporate interests.

India is US$1 trillion economy. Simplistically, each US$10 billion project will add one more percent to the Indian GDP. There is a clear policy-bias in ‘growth’ oriented economic system. Bias towards the rich and the powerful – who can swing bigger and more ‘important’ projects.

Why waste time with ‘small’ projects for ‘small’ people  – which will anyway hardly add upto any top-line or bottom-line figures?

The eco-system of small business  |  Cartoonist - Lisa Benson; source & courtesy - cartoonistgroup.com  |  Click for image.

The eco-system of small business | Cartoonist – Lisa Benson; source & courtesy – cartoonistgroup.com | Click for image.

Out of touch

Perceived complacency in the Indian policy establishment may be misplaced. It would do well to remember that

only 12 or 13 countries … have been able to grow at 8 per cent or faster for at least 25 years” of which only four countries (of a reasonable size) have been able to do what India aspires to. What investors are assuming is a done deal is actually extraordinarily rare.

The biggest block is when the establishment loses touch with the people. For Indian instances, look at modern Indian city planning. In each new Indian township, there is always space for an English medium school, always space for a play ground where Western sports can be played, always space for Western style auditoriums, stadiums, theaters, etc. The Indian State is spending huge amounts of money on the Commonwealth Games.

But there is a funds constraint for Indian sports like polo, kabaddi, wrestling, unarmed combat, etc. Why is it that (almost) all the mandis in every city (at least I have lived in) has come up in pre-Independence India. No modern township sets up a mandi. China is the epitome of this economic approach. And India is moving down that road – quite fast.

Why bother about the poor – especially if it is about infrastructure for the poor.

The nature of 'employment' (Cartoon by polyp; courtesy - polyp.org.uk). Click for larger image.

The nature of ’employment’ (Cartoon by polyp; courtesy – polyp.org.uk). Click for larger image.

The usual suspects

The usual prescription for removing inequities centres around jobs – for the poor. Foreign investors, (the writers goes on) are

surprised at the very low levels of political noise around job creation compared to China, where the government has an almost single-point agenda around creating 20 million jobs per annum.

That is because Indian’s are not hot about life-long servitude – but more about enterprise.

The writer cannot see that high quality of Indian enterprise and low noise-levels on job creation are complementary. Indian enterprise, which the toast of the investment world, is precisely because Indian are not enamored with job creation.

After making these two excellent points, the post descends into the usual “Indian democracy slows down India” routine. He then goes onto making the mistake of “small sections of society can seemingly hold back progress and the country to ransom.” What would you do – have an even smaller section of society dictate ‘progress’ to the country? A classic Platonic-Confucian model where a ‘wise’ ruling oligarchy will lead us to prosperity and peace.

Give me some other story!

  1. May 21, 2011 at 1:54 pm

    Excellent post sir.. in traditional india, village is the basic unit, that took care of everyone’s survival.. all sections in a village participate in farming, and during harvest, get their relevant share.. once they get the share, they go on to festivals in the summer season where farming is not done.. A panchayat head chosen by consensus oversees the village administration..

    More to it, every village is a planned one – we can see settlements in higher grounds, a lake in lower areas, farm lands around it, a burial ground near the lake so that 16 day ritual can be done.. the protector god at four directions of the village.. within the village, every jathi had the freedom to live with their jathi people as one colony.. we can find agraharam, farmer’s street, carpenter’s street, vyshya street etc..

    All that i mentioned above is verified by me in my region (Tamilnadu) at different places.. I dont know how the village was designed in north india.. i hope it would be the same..

    The problems associated with village came only when British unsurped powers of village headmen, and converted them in to private property of jameen.. but by citing these problems created by muslims and british rulers, all villages are today destroyed by the indian government, by their very imposition of vote based panchayat election, corrupting it with the same evil that indian democracy has now..

    Next, the very use of the term “Village” is inappropriate.. the word Gramam is apt.. bcoz village is a negative word in western sense, and as per webster dictionary of 1832, village was seen as area where uncivilized people live.. No wonder, modern day anglo dubashi indians, treat villages with same contempt..

    The indian education has effectively destroyed the continuation of kula profession, and the skills associated.. Next, the urban centered policies, support for Corporates at expense of grama society, has effectively destroyed native industries..

    The weavers, potters, carpenters, blacksmith, goldsmith, and other skilled artisans, instead of getting support from government, were totally neglected and left to the already organised corporate market force..

    In short, i call it as “The India that destroyed Bharath”..

    PS: I wish you could focus on grama setup to understand the bharatha tantra more.. for eg, village is not same as grama, and the term nagara is NOT same as present day city.. if we understand this different, everything else would be understood..

  2. May 21, 2011 at 1:57 pm

    The issue is very clear.. the traditional bharath is systematically destroyed, and an india on the lines of western society is being constructed.. in the name of development, roads & railway lines are laid right in to the centre of villages without regard for its prevailing social culture..

    People living as a community in traditional bharath are converted in to individuals subjected to totalatarian indian state..

  3. May 8, 2012 at 12:26 pm

  4. August 20, 2012 at 5:10 am

    Excellent comment by Senthil!!

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