The India story, retold
TN Ninan is among the pioneers of business journalism in India. He is also ethical, in a country where too many journalists have become rich while doing a second job as fixers and pimps for businessmen and politicians. Almost four decades of unbiased journalism, at the highest level, gave Mr Ninan unparalleled access to policy-makers, businessmen, politicians and thinkers. When he writes a book, you would expect that he would enlighten and entertain us with unknown anecdotes, events and aspects of famous personalities, with stories behind the stories. But, in his first book, The Turn of the Tortoise, Mr Ninan has chosen to take an economist’s serious tack with a suitable sub-title: ‘The challenge and promise of India’s future’.
The result is a bulky and restrained tome that documents in detail the changes India has gone through, over the decades; it would be good reference material for years to come. The book covers everything—from enterprises (the rise of cronyism to the decline of manufacturing), the underperforming State, defence matters, aspirations of the middle class, environment and much else. Mr Ninan is essentially optimistic about India’s 'growth story'. This is easy for India’s urban elite, whose life has, largely, improved over the years. All they need to do is extrapolate what the situation was two decades ago and what it is now. We have better highways, better cars, better communications and so on. Hence, it is an easy assumption for them that the next 30 years will be better, too.
But, dig deeper and we have a different picture. India’s progress has not been part of a conscious strategy that systematically clears one milestone after another. It has been the result of three factors. One, a sudden and dramatic opening up of the manufacturing and financial sector in 1991-92, which changed the financial sector inside out and attracted hundreds of billions of dollars to a perennially capital-starved nation. Such change has never been seen again, leading to the conclusion that slow incremental change is the norm in India and that we should be fine with it. But this also means that millions of people are destined to remain poor for generations while we are happy to say that India is progressing well, albeit at a slow pace.
Two, the windfall of hundreds of billions dollars that came into information technology (IT) and IT-enabled services, in the past 20 years, as revenues as well as foreign investment in the shares of these companies. This was purely serendipitous. It was not a result of policies. Indeed, everyone gets the joke that if only we had an ‘IT policy’, the sector would have been throttled long ago.
Three, just when things were looking hopeless, in 2002-03, an avalanche of global savings came into India, following a synchronous global boom in commodity prices, financial markets and real estate, in the 2003-2007 period, supported by a low interest rate policy of the United States. And, finally, just when we were about to hit a crisis in 2015, crude oil prices have simply collapsed—from over $90/barrel to around $40/barrel now. India’s exports have been down for 11 months at a stretch while the US$ is at Rs66. Imagine what would be the state of India’s current account and rupee if oil were at $90!
Clearly, what we, the privileged urban, upper middle-class people, view as a relatively continuous improvement in living standards has been caused by nothing other than two major windfalls of 20 years ago and a lucky break this year. Indian netas and babus have had little positive contribution to make. Indeed, anecdotal evidence of their wealth makes us realise how India has frittered away the windfall gains it was fortunate to get, through a fatter and more wasteful government. When a junior engineer of a small municipality is caught with Rs20 crore in his house collected from builders, when any small-time MLA can boast of a few hundred crore rupees of wealth, when the biggest of leaders in prosperous states can control thousands of crores in land, buildings, businesses and money stashed abroad, we have not moved an inch towards a State which runs on merit and rule of law, even as we lift the poor from below the poverty level at a tortoise’s pace.