The Gold Standard | The Indian churn

Ever since the Devas and Asuras churned the ‘Ksheerasaagaram’ and found a lot of things – good and bad – India is associated with intellectual, social and political churn.

Yesterday, the Supreme Court cancelled the allocation of licenses made by the previous Telecom Minister for 2G spectrum. Several friends threw up their hands and fretted over the sanctity of the contracts signed with Government of India. If the contracts had no sanction either in common law or written law, where is the sanctity left to protect? It requires some special chutzpah to go on record to state that the judgment was not an indictment of the UPA government,as the incumbent Telecom Minister has done.

This order of the Supreme Court too is worth studying. These orders may have short-term costs but they are vital for the long-term health of the nation.

India revised its GDP growth numbers for the previous three fiscal years. I am not that happy to recount here that I had warned of the risk of stagnation or decline in the savings rate at a guest lecture I made at the class of Dr. Sanjaya Baru at the National University of Singapore some time in early 2009. That is what came through in the GDP revisions. High fiscal deficit means that government savings are not there. Negative real interest rates are no big inducements for household savings. India and Indians are happy to see shopping malls constructed and frequented. Mindless aping of the West is the bane of a civilisational culture like India’s. India’s consumption share of GDP is already high enough. Perhaps, it is too high.

Indian household income and savings have to rise (think jobs, incomes, low inflation) for GDP growth to sustain. It is worth saying ad nauseam, ad infinitum. These words are not mine: consumption ought to be a consequence of economic growth and not the cause of economic growth. If it is the latter, you have indebted societies, broken homes, crimes and high stress. Think America today.

Only in a society that thinks having more of everything is the goal of life can we have consumption driving growth. More over less puts quantity ahead of quality. Pits humans in an acquisitive competition with their friends, colleagues and neighbours. Makes humans choose instant gratification over delayed gratification. Puts the needs and desires of the present generation ahead of their inter-generational obligations.

India currently has the worst of both worlds – that of foreigners and that of its own foreign-born. As Ms. Madhu Kishwar said in her recent talks in Singapore, the British succeeded in destroying Indian minds by colonising our minds more than colonising our land. They destroyed our self-esteem. For all its faults, the NDA government did not do that. The UPA government set out to emulate the Britishers systematically with their doles, hand-outs, the culture of enshrining people’s rights as opposed to responsibilities. Empowerment was out and enfeeblement was in and it is the cornerstone of official policy. It is not just enfeeblement of the Indian poor but enfeeblement of India.

A concerned Indian suggested recently that Prof. Amartya Sen could be more useful in his adopted homeland with all its present problems than in India. Many Indians would be grateful if he agreed with the suggestion. Then, the National Advisory Council could be disbanded. Many of the members of the UPA Government could return to their prior vocations and the country would not miss them. The Education Ministry comes to mind.

The Right to Education caps fees, reserves seats and disenfranchises private schools that do a better job of educating the poor than Government schools in India ever did or could ever hope to do so so that Kyrgyzstan could push us to the last spot when our children’s mathematics and science skills are tested. Perhaps, they missed out the verb in the ‘Right to Education’ bill.  It should have been labelled ‘Right to kill Education’.

We are too busy either constructing or analysing palace intrigues in the Indian cricket team whose recent rise and fall mirror that of the Indian economy.

India’s demographic dividend is about to be squandered irreparably.


DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.