Whether the year 2011 was an annus horribilis or an annus mirabilis? You be the judge

All things considered, the year 2011 was a year of mixed feelings, some good, some not so good. But as the saying goes, whichever side of the fence you are, you gain some, you lose some

First the negatives that made last year an annus horribilis (horrible year), a word derived from the Latin phrase and used by Queen Elizabeth II to describe 1992— the year in which the marriages of her two sons Charles and Andrew broke down and her palace Windsor Castle caught fire.

The year that has gone by has been termed by many as a horrible year for India, too, not without reasons. The poor and the middle class suffered the most due to the double-digit inflation, making their life difficult and living within the means a real struggle. Food inflation was at it peak with items of daily consumption becoming costlier by the day, causing unbearable strain on the common man. Inflation through out the year remained high; starting from 9.5% in January 2011 continuously remained around this level, and touching 10% during September 2011.  

The middle class, too, suffered by the skyrocketing interest rates, making their home loan repayment costlier month after month, as the Reserve Bank of India (RBI) raised interest rates seven times during the year from 6.25% at the beginning of the year to 8.5% in December 2011. Rising inflation, coupled with the rising interest rates, put extra burden on the housewife to manage her domestic budget within the family income, which remained stagnant.

Those who had invested their savings in the stock market saw steep erosion in their net worth as the Sensex plunged 24.6% during the year against a growth of 17.4% witnessed during 2010. Foreign investors who had invested in the Indian stock market were the worst hit, as they not only suffered by the fall of Sensex, but the rupee too depreciated as much as 15.8%, causing the Dollex 30 to show a negative growth or fall of 36.7% compared to the positive growth of 22.9% seen during 2010. The free fall of the rupee added to the woes not only of the industry that depended on the imported raw materials, but also hit the common man due to the rise in the petrol prices, and the consequent rise in transport cost.
The gross domestic product (GDP) growth slowed down due to macro headwinds. From 9.5% growth achieved in 2006-07, it is expected to slow down to 7% or lower during this financial year. The fiscal deficit is expected to reach 6% during 2011-12 as against 5.1% recorded during 2010-11. The lower growth and higher deficit coupled with the depreciating rupee are expected to affect corporate performance which might result in lower inflow of foreign direct investment (FDI) into the country.

As if to add insult to injury, the whole country witnessed the saga of second generation (2G) telecom scam of gigantic proportions, putting a number of politicians to shame in a manner unheard of before. The public at large were mute spectators to this loot of public money, akin to fence eating the crop, which was steadfastly defended by the powers that be to the utter disbelief of our countrymen. This gave rise to the emergence of Anna Hazare as the protector of people from the evil of corruption pervading the whole country. And the anti-corruption crusade spearheaded by his team took the front seat of national polity, urging the government in power to enact a strong Lokpal legislation to save the people from the clutches of corrupt officials in the country. But the entire efforts of the people ended in a fiasco, as the Lokpal Bill could not be passed through the Rajya Sabha leaving the whole country in utter despair over the infighting seen among the political class.

During the year gone by, the country lost a few of the greatest entertainers of this country, starting from Shammi Kapoor—the romantic hero of yesteryears. He was followed by the ghazal king, Jagjit Singh and Bhupen Hazarikha, who are irreplaceable in the world of music. And then we lost the evergreen hero and debonair Dev Anand, who ruled Bollywood like a colossus for over five decades. Besides we also lost eminent vocalist Bhimsen Joshi and noted painter MF Hussain during the year. A large number of Indians grieved over these irreparable losses to the world of music, dance and cinema during 2011.  

And we now come to the positives, the brighter side of 2011 to see whether the year gone by could be considered as an annus mirabilis (year of miracles).  
The year started off with a bang in the field of cricket by the Indian team winning the ODI World Cup after 27 long years, making the cricket crazy country proud of their young cricket heroes. This was followed by putting the Indian cricket team on the top of cricket playing nations in the category of test cricket, though they lost that position subsequently due to the white wash faced in England. In the field of cricket, another landmark was the world record of highest score of 219 secured by Virender Sewag in the ODI at Indore, all of which made the year memorable.

In the sphere of the economy, too, there were some bright spots. Seen from a different perspective, the depreciation of the rupee by around 15%, which made imports costlier in the second half of 2011, would help not only in improving the price competitiveness of the Indian exports, but also may give rise to innovation in finding out import substitutes, that will stand the country in good stead in the long-term. Besides, it would provide necessary impetus to the sagging fortunes of the IT (information technology) industry, which has been facing uncertainties due to the crisis in Europe and recessionary trends in America.

During 2011, the central government took a series of measures to tone up the economy, though they failed to follow through the policy on FDI in retail. The important positive steps introduced during the year were New Manufacturing Policy, a new draft Telecom Policy, a strategy paper to double India’s exports to $500 billion by 2013-14, a new Companies Bill that can improve corporate governance and a host of other steps taken by the RBI to deregulate interest rates on savings bank and NRE deposits, etc will have far-reaching positive implications for the economy from a medium to long term perspective.

The biggest achievement of the year was the awakening created among the masses of our country by the Anna Hazare movement to eradicate corruption from the country and the involvement of the young and the old, men and women in large numbers seen in this noble objective could change the face of India in the next couple of years. The very fact that a consciousness has been created to shun bribery, both giving and taking, among the younger people of this country could be the path breaker for the next generation and when an appropriate Lokpal Bill is passed, hopefully, it would set new standards of governance, and create an environment of trust and confidence for the greater glory of this ancient land of ours.

In the field of financial inclusion, the government and the RBI have taken a series of steps to take banking to the doorsteps of villagers and the initiatives taken in the field of Food Security bill and the use of Aadhar for direct credit of subsidy to the right people of this country have laid a strong foundation that can revolutionize the village economy and give a new lease of life to the poor and the needy for a prosperous India of the next decade.

But the financial inclusion is not complete unless and until a large majority of middle class of our country are given the benefit of financial literacy, to empower them to ensure that they are not taken for a ride by the greedy and the avaricious, and this  is the avowed objective of MoneyLife Foundation. And the year 2011 was a memorable one for all those involved in MoneyLife, for they could complete within two years of their existence 100 free seminars in different cities in a wide variety of subjects of vital interest to the common man including on Right to Information (RTI) Act, and this has served a very useful purpose of spreading the much needed financial literacy among a large number of our people

All things considered, the year 2011 was a year of mixed feelings, some good, some not so good. But as the saying goes, whichever side of the fence you are, you gain some, you lose some.

(The author is a banking & financial consultant. He writes for Moneylife under a pen-name ‘Gurpur’)

S H Subrahmanian
1 decade ago
Certainly, last year an 'annus horribilis' only, for me along with the Indian ruling family! For me because of the continuous rise in prices and for the 'Gandys' the repeated flop shows of the 'yuvraj'! The crown is yet to come for them in UP polls, leave alone the Lokpal setbacks.
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