The People Aren't

Is what is deemed good for India's moneybags good for the Indian people?

“The economy is doing great, but the people in it aren’t”.That remarkably candid statement came from a Latin American general visiting the United States (US) in the mid-1950s when a reporter asked him about the state of the economy of his country, then under military rule. Contrast this with the chronic mendacity in public life in India today, and the shameful complicity of sections of the media in all of this. The Indian economy is indeed doing well, that is, if one goes by the 8% to 9% growth of real gross domestic product since 2003-04, leaving out the deceleration following the outbreak of the financial crisis in the US in September 2008, from which the economy recovered quite rapidly. Corruption – private corporate and public – has, of course, hit the roof, but the spokespersons of big business and the stenographers of power in the press want more of the same policies that have buttressed the elite consumption-cum-private corporate investment-led growth process. The talk of economic “take-off” reminds one of W W Rostow, again of 1950s vintage.

Since the second quarter of 2003-04, when the Bharatiya Janata Party-led National Democratic Alliance was calling the shots in public policy, all that seems to matter is the inflow of foreign portfolio investment (FPI) and the consequent boom in the stock and real estate markets. The market value of the stock of FPI now far exceeds the countries burgeoning foreign exchange reserves, but who cares. The inflows of FPI witnessed a revival since March 2009 and it was a matter of time before the “economic stimulus packages”, brought in after the financial crisis spread worldwide, would be wound up. The Union Budget 2010-11 took macroeconomic policy back to what it was before the crisis. After all, isn’t the continued upward ascent of the stock and real estate markets the barometer of economic success?

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