India is hoping to turn its economy into an US$ five trillion powerhouse, and the Modi government says it will leave no stone unturned to achieve this goal. As it is normal for parties and leaders to make tall claims and work less to achieve the goals, pessimism lurks around the corner in this respect too. However, two senior leaders who handled finance ministry in the past, Pranab Mukherjee and P Chidambaram, have gone on record to say this is not an unachievable goal for a nation like India. Chidambaram and Pranab both have obvious reasons to cosy up to the powers that be. Both had long stints as Union Finance Ministers in various Congress ministries and the nation knows what these two did for the country!
As is well-known, even the five trillion mark is no great shakes once this figure is compared with the claimed 10 trillion mark of China and 20trillion mark of the US. However, world economic situation at present throws up a very dismal picture wherein this could prove to be a very tough uphill task. It must be acknowledged that India is not a tiger economy which worked wonders in the past, though the previous governments raised the GDP levels to as high as nine per cent. These GDP figures too are nothing since this is a country where development could be done at any place and at any level. Compare India’s situation with countries like Thailand or Indonesia and it becomes easy to comprehend why those countries have lower GDP. We are now at a low of six-plus per cent under the present government. It must also be noted that China has, willingly, brought down the growth rate to a little above 6 per cent from a high of around 10. It is believed that this was intentionally brought down after a high growth rate led to a heating up of the economy, and a cool-down was necessary for ensuring steady growth. That may explain the fact that development and GDP figures may not correspond to each other. With India’s manufacturing sector failing to gain steam in recent years, agricultural output remaining moderate static and exports failing to pick up, a higher growth rate is not easy for India to achieve. Nothing goes to show positive sentiments are currently at work other than in the unnatural setting of a high target by the new government.
Pranab Mukherjee has tried to pat his own back when he claimed that the target of a five trillion economy could be proposed because of the strong foundations the previous governments had set for the economy. From the early 1990s, Indian economy touched a low and gold had to be taken abroad for pledging with international agencies to organise money for even normal governmental operations. That scenario changed for the better before the turn of the century. The opening up of the economy and freeing it from the socialist chains through new vehicles of liberalization and globalization might have helped in this positive turnaround for a short while. Misplaced perceptions are that Manmohan Singh as finance minister and later as PM knew how to shape the economy in keeping with global trends. Contrarians believe he was at the correct place at the crucial time and that he did not act on internal ideas but rather on promptings from overseas. Fact is that the government, from 2014 onwards was not able to keep up the momentum. In fact, a slow-down was evident even in the last part of the UPA-II. This could not be corrected by infusing new elements into the economic growth process in the past five years.
GDP growth rates might not necessarily signify better times for the common man. The huge hits that the Indian economy is believed to have taken in the past 10 years or so by way of wayward lending by banks have created a critical situation for the banking sector. Although politicians in power in the past could be blamed for putting pressure on Banks to lend to doubtful industrialists, the sad part is that the same may still be happening even now. With no robust and tinker proof systems in place till now, the skeletons being stacked today could topple out a few decades later. The game and the muck could thus continue in future too. It is impossible to trust anyone who says the past is not being repeated today.
If the banking sector fails, its impact on the economy is terrible. A whole lot of big-time businessmen have allegedly pumped huge sums from banks and transferred the money to their accounts in foreign shores or more precisely in tax havens. India virtually bleeds continually. Only marginal recovery has been affected and the cases in relation to these are going round and round. An interesting point to note is that those few who are willing to repay their debts to enable them have a smoother future are being relentlessly pursued and their offers refused. The reasons for such response from the Govt of India are not difficult to understand. Some other wilful defaulters are taking the legal route and are set on fighting the cases for long years, as is wont with the Indian systems.
Narendra Modi’s promise before the 2014 polls about recovering the lost billions and distributing the funds to every Indian raised big hopes just like the present buzz about crafting a five-trillion economy. His present electoral win meant such issues could easily be brushed under the carpet when it comes to voting and elections. To change the life of a nation; hard work and perseverance to achieve goals by the average citizens are the only viable method known to mankind. Examples of war ravaged nations rising from the ashes to become world powers abound. Not politicians but the will power of the people of those countries achieved the goals.