To begin with, the definition of the word ‘wannabe’ is - a product designed to imitate the qualities or characteristics of something. Now, the important question is why? I always found simplicity to be the answer to all complexities, not within science though ;-). So, to correspond to this remark I have chosen a few aspects that shape up a nation and the perspective of its citizens.
Today, the economy of India is the tenth largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). In the mid 2000s it recorded the highest growth rates in its history and this was because of the increase in the size of the middle class consumer, an availability of a large labour force and growth in the manufacturing sector due to rising education levels and engineering skills. Now, the fact that brings me back to answer the 'wannabe' question is, why 1991 and why not 1961? The simple answer to that is because we waited till the last drop of blood and sweat to consider a change, a change which could serve us well, a change which could have brought us growth much earlier. I mean we always had a middle class ready to buy goods, we always had a large labour pool to produce them and the little we were educating were efficiently serving global organizations bringing in innovation to the world - NASA and Microsoft to name a few.
So a quick introspection of the facts tells us, what were the incidents that brought in the so called economic reforms of 1991. During mid eighties, India started having balance of payments problems. Now with the Gulf War starting in 1990, India’s oil import bill swelled and with India's major trading partner the Soviet Union disintegrating, the exports slumped. This resulted in the credits getting dried up and in the investors taking their money out. Now, who were these investors? They were all from outside the country (foreign investors) and since the 'License raj' was still prevalent in what looked like a pre-independent India, what they were dealing with effectively was the Govt. of India, the only industrial conglomerate in the country. Such was the situation back then that in 1969, JRD Tata, the then Chairman of the Tata Group was quoted - "I cannot decide how much to borrow, what shares to issue, at what price, what wages and bonus to pay, and what dividend to give. I even need the government's permission for the salary I pay to a senior executive". So the Indian bubble finally did burst. These graphs from the World Bank and the International Monetary Fund (IMF) perfectly illustrates the state of the then economy with an audit trail.
India’s foreign exchange reserves were at $1.2 billion in January 1991 and depleted by half by June, barely enough to last for roughly 3 weeks of essential imports these included necessary daily commodities to sustain the population including oil, India was only weeks way from defaulting on its external balance of payment obligations. Already reeling under heavy debt the immediate response from the government of India was to secure an emergency loan of $2.2 billion. And for this the Reserve Bank of India had to airlift 47 tons of gold to the Bank of England and 20 tons of gold to the Union Bank of Switzerland to raise the money. With nothing but a sustainable approach to fall back on, in came the 'liberal' model for the economy where the flood gates were finally opened to the monetarily famine stricken nation. In reality most of these reforms came because IMF required those reforms as a condition for loaning money to India in order to overcome the crisis. Subsequently, opposition to these reforms, suggesting them as an "interference with India's autonomy" were voiced and to a certain extent they were correct. Why would the country need to wait to reach a state where they can be blackmailed to let in investors in an uncontrolled manner and encourage pockets of wealth. So from a pro-socialist economy India was thrust into a capitalist economic scenario and with that we can now boast of a growth in the country which showed with the forex reserves in the country reaching an all time high of $314.61 billion at the end of May 2008. Remember, from $1.2 billion in 1991 to $314.61 billion in 2008!
However, the bigger and more important question for us, the youth and the future of India is that, have we made it big, have we actually grown i.e.? Have we learnt from 1991? Simple questions demand simpler answers.
Yes we have made it big is the answer, but the 'we' here are a very few of us. The forbes list of billionaires suddenly had more tricolors in its country column and in 2008 (can you see it's the same year our forex reserves peaked and it is not at all co-incidental) we had as many as 4 Indians in the top 10 billionaires of the world.
So all the hullabaloo around the surging GDP, how does it include the vast Indian population. Well, it doesn't. Let's prove this by going back to the definition of GDP - it is referred to as the gross domestic product at purchasing power parity per capita or simply put this is the value of all final goods and services produced within a country in a given year divided by the average (or mid-year) population for the same year. Comparing the same number with the other countries of the world, India stands at no.125 in World Bank's latest list and at no. 130 in the IMF's latest annual list. The only other G20 nation anywhere near India in that list is Indonesia at numbers 116 and 123 respectively. Now looking at the above definition you would say, "ah c'mmon its the population that is bringing the number down. Its not that bad". Ok, to answer that as well, India is 2nd in the list of most populous countries in the world. China, USA, Indonesia and Brazil make the top five and where does their GDP rank stand. China - 94&93, USA - 8&6, Brazil - 75&76 and Indonesia we have already discussed. By no means I am advocating in favor of the population burst but it's important that we don't blame this only on the population of the country. Also to be fair the population is a problem that we have created and it's biting us back.
Well now as some other critics would say, "Everybody says China is a strong economy, and if they are 94 and we are 130, that's not bad." The China vs India comparison can take a whole post by itself so I'll just ignite a thought and move away from this with a promise to provide detailed answers later. According the NationaMaster website stats 44.01% of the world's poor are from the 2nd most populous state, India and 2nd in the list is China the most populous state with 22% of the poverty share. And then just think of the state of the defense of both countries, the place in sports of both countries and then look at the state of education in both countries. Moving on with an interesting fact based on that ranked list of GDP is that a country plagued by war and political unrest for several years, Iraq is even above India on that list. So, while the GDP may increase, real incomes for the majority decline or stagnate.
Finally, what have we learnt? Have we at all learnt? I mean, did we not hear the same Manmohan Singh, the father of the reforms in 1991 and now the respected PM of India address the nation that money doesn't grow on trees and all that. Let's rephrase the question. What did he learn? The very man who is credited for bringing in the reforms to the Indian economy, what did he learn 20 years hence of which he has been a finance minister for 5 years and a PM for 9 years. And this is not trying to personally attack Mr. Singh, this is for the quality of governance in our country. What "reforms" did we again bring in 2012. We increased the price of fuel when it was already costing us more a year back and we couldn't increase it then because some regional party/ parties would topple the central government with a fistful of MPs and that the government would not be able to place their favorite son on the President's chair. Unfortunately, these have become more important than the country and more importantly the countrymen paying more for the imports for a considerable amount of time and this comes back as a rebound. We allowed FDI in Retail when the biggest Indian corporate house moved away from the sector thereby stalling the forex source and also when inflation cannot be controlled if new markets are not set up for the produced goods in India. The largest government owned commercial entity - the Indian Railways have not hiked their passenger fares in 9 years to appease the common man who vote them to power. How can they subsidize when the costs for fuel and power are ever increasing. The same money that we have given to the government as taxes are being used for supporting these political decisions. The sad truth of our nation is that Governance in our country supports Politics and not the other way round.
The facts are that India still destroys 25 per cent of the food it produces and over 400 million Indians lack proper nutritious food. More wheat is eaten by rats in India than produced in Australia and more vegetables are wasted in India than are consumed in the UK. The World Bank, citing estimates made by the World Health Organization (WHO), states that about 49 percent of the world's underweight children, 34 percent of the world's stunted children and 46 percent of the world's wasted children, live in India. So what has changed 1991 to now, nothing much except that along with the government, the corporates are also now raking in the moolah and the middle class is now called the "aam aadmi" and not "khaas". C'mmon, isn't this proof enough of the state of the citizens in our country where we are labelled as the common man.
And if there is an answer to any of these questions that I have highlighted above, then we need to find them, pretty much now.
Next post - I promise would be a smaller one. Sports.
Part 1 - Economy
Arguably, this is the most important aspect which determines the progress or otherwise for a state. In India’s case we have seen a considerable growth from the post-liberalisation period i.e. after 1991 and there has been a surge in the Gross Domestic Product (GDP) or the common man’s purchasing power as well. |
| Source:www.wikipedia.org, click to enlarge |
Today, the economy of India is the tenth largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). In the mid 2000s it recorded the highest growth rates in its history and this was because of the increase in the size of the middle class consumer, an availability of a large labour force and growth in the manufacturing sector due to rising education levels and engineering skills. Now, the fact that brings me back to answer the 'wannabe' question is, why 1991 and why not 1961? The simple answer to that is because we waited till the last drop of blood and sweat to consider a change, a change which could serve us well, a change which could have brought us growth much earlier. I mean we always had a middle class ready to buy goods, we always had a large labour pool to produce them and the little we were educating were efficiently serving global organizations bringing in innovation to the world - NASA and Microsoft to name a few.
So a quick introspection of the facts tells us, what were the incidents that brought in the so called economic reforms of 1991. During mid eighties, India started having balance of payments problems. Now with the Gulf War starting in 1990, India’s oil import bill swelled and with India's major trading partner the Soviet Union disintegrating, the exports slumped. This resulted in the credits getting dried up and in the investors taking their money out. Now, who were these investors? They were all from outside the country (foreign investors) and since the 'License raj' was still prevalent in what looked like a pre-independent India, what they were dealing with effectively was the Govt. of India, the only industrial conglomerate in the country. Such was the situation back then that in 1969, JRD Tata, the then Chairman of the Tata Group was quoted - "I cannot decide how much to borrow, what shares to issue, at what price, what wages and bonus to pay, and what dividend to give. I even need the government's permission for the salary I pay to a senior executive". So the Indian bubble finally did burst. These graphs from the World Bank and the International Monetary Fund (IMF) perfectly illustrates the state of the then economy with an audit trail.
 |
| click to enlarge |
However, the bigger and more important question for us, the youth and the future of India is that, have we made it big, have we actually grown i.e.? Have we learnt from 1991? Simple questions demand simpler answers.
Yes we have made it big is the answer, but the 'we' here are a very few of us. The forbes list of billionaires suddenly had more tricolors in its country column and in 2008 (can you see it's the same year our forex reserves peaked and it is not at all co-incidental) we had as many as 4 Indians in the top 10 billionaires of the world.
So all the hullabaloo around the surging GDP, how does it include the vast Indian population. Well, it doesn't. Let's prove this by going back to the definition of GDP - it is referred to as the gross domestic product at purchasing power parity per capita or simply put this is the value of all final goods and services produced within a country in a given year divided by the average (or mid-year) population for the same year. Comparing the same number with the other countries of the world, India stands at no.125 in World Bank's latest list and at no. 130 in the IMF's latest annual list. The only other G20 nation anywhere near India in that list is Indonesia at numbers 116 and 123 respectively. Now looking at the above definition you would say, "ah c'mmon its the population that is bringing the number down. Its not that bad". Ok, to answer that as well, India is 2nd in the list of most populous countries in the world. China, USA, Indonesia and Brazil make the top five and where does their GDP rank stand. China - 94&93, USA - 8&6, Brazil - 75&76 and Indonesia we have already discussed. By no means I am advocating in favor of the population burst but it's important that we don't blame this only on the population of the country. Also to be fair the population is a problem that we have created and it's biting us back.
Well now as some other critics would say, "Everybody says China is a strong economy, and if they are 94 and we are 130, that's not bad." The China vs India comparison can take a whole post by itself so I'll just ignite a thought and move away from this with a promise to provide detailed answers later. According the NationaMaster website stats 44.01% of the world's poor are from the 2nd most populous state, India and 2nd in the list is China the most populous state with 22% of the poverty share. And then just think of the state of the defense of both countries, the place in sports of both countries and then look at the state of education in both countries. Moving on with an interesting fact based on that ranked list of GDP is that a country plagued by war and political unrest for several years, Iraq is even above India on that list. So, while the GDP may increase, real incomes for the majority decline or stagnate.
Finally, what have we learnt? Have we at all learnt? I mean, did we not hear the same Manmohan Singh, the father of the reforms in 1991 and now the respected PM of India address the nation that money doesn't grow on trees and all that. Let's rephrase the question. What did he learn? The very man who is credited for bringing in the reforms to the Indian economy, what did he learn 20 years hence of which he has been a finance minister for 5 years and a PM for 9 years. And this is not trying to personally attack Mr. Singh, this is for the quality of governance in our country. What "reforms" did we again bring in 2012. We increased the price of fuel when it was already costing us more a year back and we couldn't increase it then because some regional party/ parties would topple the central government with a fistful of MPs and that the government would not be able to place their favorite son on the President's chair. Unfortunately, these have become more important than the country and more importantly the countrymen paying more for the imports for a considerable amount of time and this comes back as a rebound. We allowed FDI in Retail when the biggest Indian corporate house moved away from the sector thereby stalling the forex source and also when inflation cannot be controlled if new markets are not set up for the produced goods in India. The largest government owned commercial entity - the Indian Railways have not hiked their passenger fares in 9 years to appease the common man who vote them to power. How can they subsidize when the costs for fuel and power are ever increasing. The same money that we have given to the government as taxes are being used for supporting these political decisions. The sad truth of our nation is that Governance in our country supports Politics and not the other way round.
The facts are that India still destroys 25 per cent of the food it produces and over 400 million Indians lack proper nutritious food. More wheat is eaten by rats in India than produced in Australia and more vegetables are wasted in India than are consumed in the UK. The World Bank, citing estimates made by the World Health Organization (WHO), states that about 49 percent of the world's underweight children, 34 percent of the world's stunted children and 46 percent of the world's wasted children, live in India. So what has changed 1991 to now, nothing much except that along with the government, the corporates are also now raking in the moolah and the middle class is now called the "aam aadmi" and not "khaas". C'mmon, isn't this proof enough of the state of the citizens in our country where we are labelled as the common man.
Next post - I promise would be a smaller one. Sports.
this gives us a lot to think about, its as if things are crumbling down like a termite infested wood piece.... but in the middle of all this, will only asking questions help us out? I mean, we raise these questions and then move on with our lives, the common man in India is either is the biggest fool in history of evolution or there is something seriously wrong in their thinking process.. year after year the same things continue, same decisions and same mistakes, but we, no no we never learn..
ReplyDeletealso, China too has a socialist government, how come they could continue in emerging as one of the biggest and power economies when we failed in the same line...??
situation seems bleak and downright scary to me but again no where to look for the answers..
Thanks for your comments Madhura. You are right that asking questions would not help and but I would also say that things are not crumbling down like at all. The legal approval of the RTI act was the biggest milestone for the common man in liberal India i.e. post 1991 and we have to make use of that weapon now to drive out all the issues from the country. The answers to these qustions are with us. We have not been able to bring in the change since we have never had a potent and effective alternative which is devoid of personal interests. Take the example of Barack Obama and Hilary Clinton, who in 2008 were fighting tooth and nail to be the democrat candidate for the presidential elections and it was down to the wire when Obama clinched it and then onwards its been President Obama and Secretary of State Clinton fighting it out as a team with a common interest, that of making the USA a better and happier nation. Can you even envisage such a future in our political system? The day we can, we'll have the answers. And if we can't then we need to get in the mud and clean it ourselves. And we need to know when it's too late for never. Thanks again.
DeleteWell written!!...But I feel the biggest irony is the people whom we call "AAM ADMI" of which we are an integral part, really write blogs, mock the politician's but we really do not do anything to make a change happen!!..I mean has anyone of us really thought of doing something about it. In the first place I feel the common man should really stand-up and abstain from Voting until we have good credible people coming in. All said and done we all know India is somehow beyond repair, but still its my country its your country so rather asking questions with no credible answers, we should really start stand up and try to change it somehow. Its time we should stand-up and be counted!!
ReplyDeleteThanks for your comments Tubai. This is indeed the point that I wanted to make. Abstain from voting or getting into governance is the only way out for us and I am not a pessimist, so won't really say that our country is beyond repair. With strong leadership and inclusive common interest of a prosperous nation we surely can slowly bring this nation to the summit. Someday.
DeleteSumit, I am reading your writing after a long long time. You really write well, man. And you included so many facts in your piece -- that's great! I look forward to more articles.. and no need to shorten them :)
ReplyDeleteI myself have lost a lot of faith in India in recent years (mainly by staying in USA, and comparing the two countries). Hopefully some day, I can do something myself towards changing the situation.
Hey Kriti, thanks for commenting and I quite appreciate the encouragement. As for losing faith, I guess one can never really lose hope. For the last couple of years that I have been traveling here in Europe, I have come across so many successful Indians so it beats all explanations as to why we can't have a successful India. Keep reading, means a lot to me :) Cheers !
Delete