Zombie Economics and “underachiever” PM
Dr R Balashankar
Dr Manmohan Singh need not be unduly perturbed about what the Time magazine writes about him. He should rather be worried about what Indians feel about him. Quick at repartee and eager to gain brownie points, Home Minister P Chidambaram reminded the BJP (which hurriedly lapped up the Time prognosis) about a similar cover on the NDA Prime Minister Atal Behari Vajpayee in 2002, in the same foreign weekly. The comparison is only partly correct. Because the Time cover then was more about Vajpayee’s allegedly failing health (in absolute bad taste) than about the economy or his governance (about which nobody had a complaint).
Yet, Chidambaram is partly right, because in the 2004 election NDA lost. Hopefully, Chidambaram sees the same prospect for his Prime Minister in the next election.
The BJP could have been more reticent. People with even elementary knowledge of economics will concede how inadequate the main opposition party is in its response to economic issues. In the West they call it Zombie Economics. Capitalism is a dead idea like Communism. Globalisation too is dead. Trying to revive them, repeating all over again what the West did and failed is being zombie.
Manmohan Singh is an underachiever because he has killed the animal spirit in us. From aspirational he has made us apprehensive. A Prime Minister worth the salt would give wings to dreams and make Indian corporate invest in India, not plot a capital flight. Why Indian corporate and politicians are investing abroad and creating jobs there instead of India? When Barack Obama comes to India, he talks of the ten million jobs he is able to create for Americans by this visit. When Sarkozy visits India, on his agenda is how it will revive the French industry through defence and nuclear deals. Putin is riled by the West because he is not letting them loot his country. But what has Manmohan Singh achieved by his numerous foreign visits for India other than the Nuclear Deal, which the West was desperate to clinch? He is one of the most travelled PMs India has ever had. When he goes out he offers tax payers’ money for others to splurge. He is an underachiever, nay, nil achiever for India.
Last week President Obama announced his new Jobs Act with easier norms to encourage native start-ups. He has put in place all protectionist restrictions to limit immigrations, protect domestic industry and jobs in the US. Every developed country is putting in place laws to keep the developing Asians from invading their domain. Still, they need our capital, our market and conspire to monopolise our consumer sector. Manmohan is an underachiever from their perspective because he has not entirely succeeded in warding off resistances from Mamata, Jayalalithaa, Naveen, a slow going Pranabda and sections of his own party, the Left and BJP to open the floodgate of Western financial and market profligacy. He is underachiever from an Indian perspective because he has not been able to safe guard Indian position and advance its interests in the wake of a fast declining West. He rather played their collaborator and fell between two stools.
As the party of tomorrow the BJP has to think afresh. To repeat the homilies of 1991 agenda in 2012 post 2008 economic depression only exposes a conservative, if not stagnant mindset. Like a tape that got stuck in an old recorder, our friends repeat, “if only the Congress was willing – we are too willing—to support the Pension Bill, higher FDI in insurance, retail FDI (with riders) and GST”. They won’t ask why the government is growing in size, why the service tax net is so inhumanly wide, why the honest fixed and postal deposit holders are taxed, on whose behest the government policies are killing small and micro-finance, how corporates are looting the public be it in civil aviation sector, electricity supply or scandalous metro construction (to name just three), why the Planning Commission is overspending and overarching, its relevance, why the elected state CMs have to go to the Planning Commission like the good old Nehruvian licence – permit days, why retired bureaucrats never retire from service (The Indian Express has done fantastic series on this), and why NAC’s brainless discretionary freebie and subsidy (all uneconomical and anti-reform) ruling the roost.
The grievance of the Time cover is different from the pain Indians suffer. We have a problem when Manmohan Singh unilaterally announces a $ 30 billion bailout for European recoup. Last year he gifted another $10 billion for the same purpose. Similar amounts—India is the third largest donor after US and Japan–are being gifted away to Afghanistan. Nobody knows what India will gain from such largesse. India is not able to even diplomatically leverage on such mindless unrequited generosity.
Manmohan Singh goes about as if there is no tomorrow, he is not accountable. There is so much hype in the media as if he is going to do wonders on the economic front now that Pranab Mukherjee is out of the Finance Ministry. This is as if the Prime Minister had no say on his Finance Minister. If so, they are undermining the image of the Prime Minister whom they are trying to project. Few months ago we witnessed a similar campaign when Pulak Chatterjee assumed charge of the PMO. For almost a year, there was a build up lampooning the then Principal Secretary TKA Nair, as if nothing moved in the PMO because of him. That in the last one year the PMO has become more comatose need a more unfettered media to report. The options our media offers often leave the impression that they are all the time looking for alibis for a non-performing government because they have been paid to do only that. This is not helping either the Congress or the economy.
The stock market is stuck for the last three years. Average investor has lost both money and faith in the exchange market. He has lost both in the Indian banks and insurance as well. In the LIC’s much hyped schemes and mutual funds he has burnt his fingers. But not a drop of tear for him either in the media or in the political sphere. When the NDA was in power a drop in the sensex used to hit headlines. Pink press used to scream “bloodbath” in Dalal Street. Gold has become the last resort of every investor and every scoundrel. The yellow metal is skyrocketing and all the money that would have gone into development activities is getting hoarded. The banks are starved of liquidity that some of them are offering unheard of interest rates for deposits for even seven days. Inflation and price escalation are the natural consequence. Practical economics is not often explained in theoretical terms. Policy paralysis everybody is talking about is basically the result of lack of grassroots understanding.
In the past our economists were not made in US or Oxbridge. They breathed the fragrance of the Indian soil. Essentially they were agriculture economists. Not proponents of derivative occult, Darwin Economics and Agriculture, of natural selection,which is about exploitation and monopoly.a