India has become the fourth largest economy pulling ahead of Japan and is soon expected to overtake Germany to take the third position. This is obviously the result of, first, the ‘liberalisation’ that took place in the times of PM Narasimha Rao, when the nation was teetering on the edge of bankruptcy, and then the fillip given by the pragmatic policies adopted under PM Modi. There is criticism that the economic growth has not resulted in enough jobs and equitable distribution of wealth, but is it anybody’s argument that the earlier situation was better?
One must recall how South Korea transformed its economy based on the principle, ‘This generation for the next’. This implied that sacrifices and efforts have to be made over a period of time before the fruit can be enjoyed later. India’s socialist model failed miserably because those running it had absolutely no clue about grassroots economics and believed good intentions would suffice. Thankfully, business and commerce survived the years of state control, almost in guerilla fashion and through developing a ‘parallel’ economy. Once the opportunities were opened up, the inherent millennia old spirit of the trader and risk taker has returned. India is on the growth path and finding its rightful place in the world.
At the same time, there are many changes taking place around the world that pose new challenges. India has benefited in that it has leapfrogged, technologically, thanks to the experience of other countries. Green technologies, for instance, are available that allow it not to go through traditional manufacturing processes that damage the environment. Similarly, many of the jobs that would normally have to be done in the past are no longer needed. Instead, new sectors are being opened up for which many changes in education and training are required to benefit. For instance, the manner in which the IT sector has expanded could not have been predicted some decades ago.
Unfortunately, there are those that seem to have a nostalgia for the past, and view economics from that lens. If given the opportunity, they would take India back to an approach that would enforce ‘distributive justice’ at the cost of everything else. For them, it is better for all to be equally poor and miserable, rather than allow some to pull themselves out of the morass. They even refuse to acknowledge that the present economic growth has taken almost all of India’s population out of poverty and promises to do much more. They forget it is the job of the state to regulate and not to control. Hopefully, however, they are now just as redundant as the ideology of the Maoists.
