Tuesday, 25 March 2014

An economic manifesto for India

Indian elections are around the corner – easily the most complex democratic exercise on earth affecting one in seven people in the world directly, and more indirectly.

Democracy is all about choices. In order for that to succeed, the choices must be clear. The biggest issue facing India is economic – how to lift millions of Indians out of poverty and give the best possible economic advancement for as many Indians as possible. And yet, if you see the electioneering, there is total absence of economic policies or what the choices are. There are general myths , perceptions and blind loyalties on which the people are being asked to vote. No specifics at all. 

In the area of economic policy, the front runner is arguing that he would replicate the success of Gujarat nationally.  That is fine, but how would he do it ? India is not Gujarat.  It is far more complex and requires an entirely different set of policies.  So what specifically  would he do to ensure “development” (his favourite word) in India.  Complete silence.

The incumbent is maintaining complete silence as well. If the track record of the last ten years is anything to go by, he would be a disaster. If he is going to change tack, then he should say what is the new direction he would take. Nothing there

There is a motley crew who would all like to be the leader and who would like to constitute the third or fourth or fifth fronts. They are all, especially the three women amongst them, economically illiterate and their track records in their respective states is abysmal.  No announcement about what their policies would be, except the lady from the East mouthing some general platitudes.

Then there is the new kid on the block. We do not as yet know, whether any of his pronouncements are to be taken seriously, but the general feeling, economics wise, is that it would be the biggest disaster of them all. In any case his philosophy appears to be that noise is better than policy.

This is ill serving the people of India. If we are to make a choice, we need a specific manifesto. In the absence of any of them stating this, this blogger, in his hotheaded way is proposing to offer one. Not that anybody would take the slightest notice, but then blogging is all about airing one’s views. 

In the next post, I will outline India’s revenues and expenditure in a simplified way and ask you to make the choices. Then we will together, co create an economic manifesto. How about it. I will also plead with some of my usually silent readers to also articulate their view on the choices  - every Indian should think about the way forward.

By the way, the theory that economics does not matter with people and that they will not be influenced by what is economically the right thing to do is completely untrue. For evidence, you only have to look towards China. The entire legitimacy of a system of government that is unitary, non choice based, dictatorial , non representative, etc etc is the implicit economic contract with its people. Politicians in India might wish to ponder over the reality that if a free and fair election were to be held in China today, the Communist Party would romp home with a three fourths majority.

We will also cover the political side of the economic argument – how to sell it to the voters as well.   

Walk the next few days with me - I promise that the discussion will not be too technical. Let us create our own manifesto for India.


Anonymous said...

In GDP, real estate contributes 6.3% and nearly 7.6 million jobs. please write whether land value contributes to actual production.

Ramesh said...

@Anon - Yes, real estate is a big part of the economy. It will feature in the discussion although indirectly - there are lots of things to be tackled as well.

Thanks for expressing your opinion. We need an informed debate on our economy.

The Million Miler said...

Interesting post. I remember from my days during post graduation where an eminent professor of economics tried to drill the complexity of Indian economics into the simple brains of us engineers. The only takeout from that semester about 26 years ago is the fact that there is no one homogeneous definition of Indian Economics. What is relevant in feudal Bihar is not relevant in agraraian Punjab or in Semi Urban Tamil Nadu or metroplitan Delhi. We are, as a nation, as similar to a country which has Portugal and Romania as its constituent states. Perhaps a Federated States of India is an answer? The third, fourth, fifth or sixth front of today can't make that happen. Nor can the rabble rouser leading a motley crew of socialites and 'intelligensia' do it. Hobson's choice indeed.

Anonymous said...

I dont see a reason why the success of Gujarat cannot be repeated. India is complex and I do agree but there are many simple things that can be done that will impact the economy positively.

1. Build roads
2. Ensure agriculture is encouraged, through electricity supply for motors etc... water provisions etc...
3. Encourage entrepreneurship with faster clearances
4.Encourage manufacturing
5. Ensure transparency in dealings........ and a ton of other such things....

I may be oversimplifying, but a number of times, it is the simple,basic solutions that go a long way in breaking down the complex!!

I dont agree with you that there is no viable choice....

Ramesh said...

@Kiwi - That was then. Now you are an economist yourself. Yes, we are a federated states of India, but there are many common themes. I'll propose some of them in succeeding posts - let us debate

@Shy - Thanks Shy for airing your views - exactly the sort of debate we must have. One big difference between Gujarat & India - India's budgetary situation is far worse than that of Gujarat. There is little money to do anything - let's carry the debate on in succeeding posts. Hope you will participate and disagree vigorously - for there cannot be a discussion without disagreement !

Pranav said...

This is such a great idea for a series of posts. I am really looking forward to this. The next one can't come soon enough.

Vincy said...

Indian Economics - a topic that i have given so little thought to. Do look forward to your series on this and to be enlightened.

Ramesh said...

@Pranav - Share the ideas of a young man, so that we old foggies can be put in place :)

@Vincy - See next post and let me know what you think ought to be the priorities.

Sriram Khé said...

I appreciate the earnestness behind the desire to engage in some serious discussions, as opposed to a flippant tea-kadai argument. So, yes, let us have some fun with it fully knowing that the points made here will be like what we say about Vegas--they will only stay here and not really go anywhere into the real world ;)

Yet, even as I will try to pitch in as a non-Indian (ahem, foreign passport here!) well, the Million Miler has already identified some of the problems in developing an economic manifesto for "India," which is no different in a way from the problem I have with "Indian restaurant" when outside India--as if there is something called Indian food.

But, will set aside my cynicism and reservations and contribute what I can to make Ramesh happy ;)

Follow by Email

Blog Archive

Featured from the archives