First how much of the Indian economic miracle was a hype ? Can there be an economic miracle when 60 % of the population does not partake on it ? Does making a few billionaires and a multitude of millionaires on the stock market make for an economic miracle for over a billion people ? How much of the peak of the sensex index of 21,000 points was a media generated buying frenzy coupled with insider trading ? And conversely how much of the slide to 13,000 points a media created panic. Such dramatic rise and fall within six months of each other does not make for a mature capital market. International oil prices are not showing any signs of abating. We must get used to higher prices, that is for sure. A weak coalition government that is getting ready for electioneering and not being decisive. No leaders stand in opposition that are capable of shouldering the responsibility of powering a modern and competitive India into the next decade by keeping the entrepreneurial spirit going AND being inclusive of the less privileged sections of the economy, we are heading back 20 years … does anyone remember those years ? Here’s what could happen …
1. Capital loses faith and floods out of India. Indians that have the money and had moves their assests abroad are probably congratulating themselves as the rupee spirals downwards. Foreign Direct investments cease as political uncertainties and spiraling rupee, failing capital markets and political uncertainties frighten any investors away.
2. Instead of conserving precious foreign exchange for oil and food, the Reserve bank Of India will be forced to shore up the rupee by selling the dollar to buy the rupee.
3. A devaluation of the rupee will further fuel inflation as the price of oil will rise further in the hands of the consumer as imports become more expensive
4. The government will have to clamp down on imports and a lot of the open envoirnment that created the atmosphere of an open and world – integrated economy will disappear.
5. Elections will suck out the energy from the growth of the country and the result will be yet another indecisive coalition, with each partner looking after only it’s own self interest. No leader will be strong enough to take decisions crucial to stop the economy from skidding.
So what can stop this rot ? One thing is that a large section of people in India have tasted hope and pride for the first time. Our continuing economic growth depends upon the will of the people and not on the will of the government alone. Before all hope is deflated and the people withdraw into a more defensive mode rather than a strong entrepreneurial mode, the government must be forced to ACT.
It must stop dithering and think of only it’s own problems of electioneering. So we must all raise our voice to say what we feel. Do we believe that the Left parties are right in opposing the Nuclear Deal ? The fact is that we cannot depend upon oil for our energy needs and must develop new energy resources. Why cant the government take the Nuclear Agreement issue to the public ? Why don’t we know the truth and then we as the people of India can decide whether the Left is just calling a bluff, or it has a point when it says that this is a sell-off ? Is the issue even worth bringing down the government at a time when what the nation needs most is stability.
I think it is time for everyone to make their voice heard. If there is any purpose in blogging then surely this is one, would you not agree ? Are we going to allow people motivated by their own needs to be in power taking us sliding back into the economic dark ages ?
Not without a fight we are not !