BJP’s rank nationalism has seeped into growth consciousness too.
By Sujeet Rajan
NEW YORK: What’s real growth in terms of India? Is it annual GDP of 7.5%? Cities stuffed with lavish homes, luxury cars, gourmet products from around the world, global businesses setting up base in the country? Or is it the long haul to alleviate heartrending, mind-boggling poverty, uplift the struggling rural, agrarian masses which constitute almost 3/4ths of India?
Is India indeed the fastest growing economy in the world, a country on the cusp of economic greatness when there’s widespread drought, children die daily of thirst and hunger, farmers commit suicides and brutal rapes of women continue – many assaulted when they are forced to relieve themselves in the open for lack of a toilet at home or for miles around?
India’s suave and articulate union minister for finance, corporate affairs, information and broadcasting Arun Jaitley, gave good presentations with the right dose of rhetoric – as expected of a crafty politician – but was cautious and struggled nevertheless to explain succinctly India’s quandary on the economic and reforms front, in his just concluded visit to the United States, where he addressed several meets, in Washington, DC, and New York.
One could almost analyze how Jaitley’s mind worked as he swiftly dealt out future projections for India. The 800 pound gorilla in the room for him seemed to be the question of how to eradicate the overwhelming poverty and fear of massive unemployment, which may sink all hope of India ever achieving the status of a developed nation.
Jaitley was supported by a group of eminent personalities who traveled with him: India’s ambassador to the US Arun Kumar Singh, Confederation of Indian Industry president Naushad Forbes, and secretary of the department of economic affairs in the ministry of finance Shaktikanta Das.
The trio gave plenty of attractive, potential growth and investor-bound figures for India. It would have been hard put to find a better destination on Earth, to invest in and get instantly rich, going by their outlook. It seemed not just Kerala but all of India was ‘God’s Own Country’; India seemed to be almost on the verge of becoming a developed nation, when Jaitley spoke of providing houses for those living in huts, as he did in his recent budget. But how many houses, and by when? When more than 700 million people are living in rural areas, it’s a hard proposition and challenge to meet.
A $500 billion trade pact with US was the goal – a ten-fold increase – according to speeches by the India officials. But there was no mention of difficulties to achieve it, especially since Jaitley himself took a dig at United States’ protectionist policies, in his talk at the Asia Society, in New York. There was talk of innovation and manufacturing, ‘Make in India’, but the question of exactly in what areas and products and when exactly all this is going to materialize hung in the air and popped like a bubble as the next enthusiastic projection came from the quartet.
Jaitley spoke of the need to sustain economic reforms to keep in place hard won initiatives under the almost two-year-old BJP government, reiterated the urgent need to modernize villages, build new roads (233 highways are under construction), ports, regional airports and railway stations through FDI. To not just be known as the leader globally in the IT services sector, but also mine the untapped potential of rural areas, get more women – who are mostly homemakers in India – into the workforce. He, however, seemed to be perpetually on the back foot after giving the positives.
It seemed a weight came off Jaitley’s shoulders, when he cautioned against the vagaries of “grim” global financial forebodings. He confessed that no country, including India, was immune to it. It was worrying that countries now think 2 percent growth is good, has become the new normal. He also confessed to having no clue as to what the world’s economy would look like in even two years’ time, speaking at the Asia Society. He again dwelt upon some of the issues briefly in a talk at a private reception organized by the India-America Chamber of Commerce, headed by lawyer Rajiv Khanna, in Manhattan.
But what was really puzzling and startling about Jaitley’s US visit, was his verbal battle through the media with India’s top banker Raghuram Rajan who traveled with him for World Bank talks in Washington. Rajan, one of the sharpest financial hawks globally, pronounced that India was a ‘One-Eyed King in the land of the blind’, cautioning against exuding too much euphoria, too soon. Rajan was being pragmatic: India needed to grow continuously at a furious pace for the next 20 years to achieve its grand ambitions and growth projections.
Jaitley hit out at Rajan, trying to dispel any illusions about India’s growth story.
But this is what Jaitley himself said at the Asia Society, injecting some realism into the current economic scenario in India: “Given our own standards and expectations, of being able to grow faster and eradicate poverty and transform ourselves into a developed economy, we could probably do a little bit better.”
It didn’t help that India’s commerce and industry minister Nirmala Sitharaman too blasted Rajan for his more than anything else, politically insensitive remarks, with the opposition desperate for material to hit out against the government.
In a way, the message from Jaitley and Sitharaman and no doubt, Prime Minister Narendra Modi too, to Rajan, was that when it comes to India’s growth story, it’s akin to ‘Bharat Mata Ki Jai’; blind patriotism and nationalism comes first. India is not a ‘One-Eyed King’. Say ‘Bharat Mata Ki Jai’ in whatever way you want to, in fervor, in a whisper, inhale or exhale the sentiment and the feeling, but don’t question anything about India. Even grand projections of future growth.
But Rajan is not the one to cower. Addressing the 12th annual convocation of the National Institute of Bank Management in Pune, on Wednesday, he had this to say, according to reports: “For effective communication and debate, rather than the angry exchanges that we see on some TV shows, we need both respect and tolerance. The greatest danger of all is that we do not communicate or debate, for then we will allow distorted stereotypes to flourish unchallenged, and divisiveness to increase. In a country like ours, conceived and flourishing in diversity, that will truly be a disaster.”
It’s not just a growing sense internationally of curbs on freedom of speech and expression in India, that nationalism is trying to bulldoze its way through objections. The fact is also that India’s job creation is almost stagnant, or worse. According to data available, from the period of April-September 2015, India added 91,000 jobs, which was a decline compared to the preceding six months when 181,000 jobs were added.
If anything, India’s July-September quarter has seen the lowest job growth compared to the same quarters in 2009, 2011, and 2013, for which data is available, reported Quartz. Worryingly, the textiles and IT industries shed jobs.
As Jaitley and Sitharaman, both astute politicians know, the world will take their growth projections with the amount of skepticism it deserves, but when somebody like Rajan speaks out against curbing freedom of speech, the world will sit up and take notes, underline it too. The idea of ‘Bharat Mata Ki Jai’ and nationalism may work well for BJP in India, it would spell disaster on the international stage.
Neither does it help when India’s union minister of state for micro small and medium enterprises Giriraj Singh, instead of promoting small businesses in the country, advocated in a speech in Bihar, a two-child policy for all religions, to thwart the dangers of Muslim men dominating Hindu women. Someone should tell Singh that communal discord is one thing India should be extremely wary of, akin to a dirty bomb going off in a crowded city.
Jaitley’s speeches of India’s growth potential is of scant use and will not get any respect, when the world reads in puzzlement of protests and demonstrations from the north to the south, from the multinational and modern hot spots of Gurgaon to Bengaluru, which turned violent and tens of millions of dollars’ worth of property was damaged, people killed.
India’s future problems are not just linked to global disruption of financial markets, bad assets held by banks, rise in oil prices, government debt and terrorism. It’s also internal rifts and civil uprisings, which as the Jat protests in Haryana showed, not even the government and the military could contain effectively.
Jaitley also revealed in talks a problem being faced by India’s central government when it comes to FDI. It’s one thing to pitch for investment on the international stage, but then it’s really up to the states to woo investors, and rope them in. Thus, even states like Kerala and West Bengal, swamped over the decades by communist leaning policies and strong labor unions, may be able to lure investors to deal directly with them. The onus is on the states to woo investors, Jaitley confessed. That’s the true way to get FDI.
India’s tag of a poor country with more than half of the population engaged in the rural sector would take decades to improve, if at all. For now, it would be better if more realism is injected into growth scenarios and Raghuram Rajan not told to shut up.
(Sujeet Rajan is Editor-in-Chief, The American Bazaar. Follow him @SujeetRajan1)