History has many interesting stories to tell us. In the last few decades many countries saw major changes in their economic growth and this indeed changed the direction of the world. Before world war 2 US was just another country. The war along with its destruction reduced Japan, Germany to rubbles. Even UK and France paid a very heavy price. The US emerged as a winner because it was least affected by the war. Its currency along with gold became the foreign reserves of other countries. All countries traded with it to earn the so called hard currency. They still maintain their leadership with a 18 trillion dollar GDP. China which was an economically backward country for many decades under the leadership of Mao Tse Tung changed completely under the leadership of Deng Xiap Peng. A major transformation. In the last 4 decades China has outperformed every country in the world and is likely to go ahead of the US in the years to come. They have sown the seeds of growth with very heavy infrastructure investment.
India in 2014 is eagerly awaiting an economic miracle. We have been underperforming too long except for a few bright years. The growth rate is likely to stay below sub 5 percent in the near term. A new fillip is required. What seems to be the problem? Let us look at them one by one.
- Trillions of rupees that should have been available to the Indian government coiffeur have literally been stolen away. We call them scam. With every scam trillions of rupees were stolen away by influential people. If it was available to the economy we would have achieved much higher economic growth
- Absolute lack of governance, poor transparency created poor economic policies. Election victory is the main consideration rather than economic growth and jobs.
- A leader who observed silence and tight lipped when he should have spoken. He was more concerned about his safety of job. The word “policy paralysis” found its way to the economic literature thanks to UPA 2
- Enormous amounts of money siphoned from our economy and found its way to overseas banks. The rule makers failed to see its coming
- The NPA of banks have grown rapidly. Big companies in India are the cause of it. Trillions of rupees borrowed and never to be returned at least for now.
- Uncontrolled rate of inflation. RBI does not seem to have the muscle power to tame it. The interest rate hikes are extremely moderate with really no intention to fight the inflation.
- The agony of middle class. Right from school and college fees to medical expenses have gone up many fold. Their savings have dwindled. Inflation rate is the main culprit.
- Infighting and bickering seems to be the only tool available among our politicians. Not a single problem is addressed with vigour. More problems are created and allowed it to perpetuate.
- Treating citizens as numbers and corrupted them by giving goodies to win the election
- Putting fears in the minds of foreign investors by going back on their words. We still expect them to rush to our shores. If they do come, they will price their products to include bribes to be given to politicians.
Now, time has come to change all these practices. We cannot undo what we did. What we need
- A corruption free government
- All factors of production put to good use to achieve steady economic growth
- Inflation indexed returns to savers
- Conservatism in banking. No more new NPAs.
- Regulated credit expansion
- Regulate black money by changes in tax laws
- Periodic reporting of the progress in the economy
- Promote faith and optimism that our future will become better
- Providing help to the right needy people
- Make the country a nation with a well defined vision and the mission to achieve it.
India is a proud nation but mislead. It is capable of achieving great heights. Let us work together. Let the government and the people become partners to help in the growth. This is our turn to grow rapidly. With good leadership and commitment it is waiting to happen. So Mr. Prime Minister let us get on with it.