In the absence of identifiable indicators, a status-driven society like India has become brand-driven in decision-making
The projected departure of Reserve Bank of India (RBI) Governor Raghuram Rajan has received unprecedented attention. I do not remember signature campaigns being launched in favour of any serving RBI Governor who was a potential candidate for another term.
The polarisation of such positions is a dangerous trend and it could have been a good idea for our liberal thinkers to take a position on the principles involved in such crucial governance issues. The facts of the case will, perhaps, forever remain a mystery. Who instigated what and what was the motive, remains a matter of speculation.
Meanwhile, the media, in its various incarnations, has been flooded with observations. It has been suggested that the real target of some of the comments was Union Finance Minister Arun Jaitley who had to rush back from his China tour. There comes a time in campaigns when well-orchestrated interpretations start parading in carbs of truth. So be it.
It may not hurt to look at some concerns or questions. The economy has paid its price for high interest rates. It was deliberate. Non-performing assets have never been so high. Regulatory measures contributed to the state of affairs. The real estate sector shows mixed profiles and it is obvious that high interest rates did not bring down inflation. There is one simple truth about the Indian economy: It is variegated and often unstructured.
When I used to say this in my sojourn at Sussex, some decades ago, I was called to produce evidence. I had to explain how there was only partial monetisation of assets in large parts of rural India. Payments for goods and services was often in kind. One effect of this process was throwing the statistical profile of income distribution in a tizzy. And when the Planning Commission chose to read this gospel, the results which it produced, are there for all to see.
Hence, what is good economics and who is a good economist remains a question, whose framework of reference still eludes definition in the context of Indian economy.
It is painful, but true, that in absence of clearly identifiable indicators, a status-driven society like India has become brand-driven in decision-making.
Getting a degree from Harvard University, Yale University, Columbia University, University of Wisconsin-Madison etc or getting an employment in the International Monetary Fund or the World Bank becomes a passport to not only attain high ranks, but is also a platform to gain high attention. There is no correlation between the competencies of earning a degree and practicing economics in India.
Whatever one may think of China, especially in the backdrop of deliberations on the Nuclear Suppliers Group, the truth is that this communist country has developed operational models, rooted in the tested wisdom of past wisdom and is indeed showcasing it for economic purposes. Consider how medicines from China is packaged, exported and respected globally.
What have we done to Indian systems of healthcare, with many constantly ridiculing what they think, it stands forIJ
The Indian seamen ruled the waves for centuries and Rajendra Chola is merely one symbol of our prowess in seafaring. The current effort that is going on to put the ocean studies on the map of Indian psyche is not a day too soon.
In the meanwhile, China has been busy, since March 2015, in not only projecting, propagating, but practicing One Belt, One Road capability, infrastructure and economic development programme.
The new silk road echoes Economic and Social Commission for Asia and the Pacific’s Asian highway. Asian Railway and Asian Economic Corridor fills in the missing link connecting China to the rest of Asia and Europe. The maritime components as the ‘string of pearls’ in the Indian Ocean extends westwards to Europe through the red sea and east wards to South China Sea.
Ports have become the key in such infrastructure projects. Such forces are possible when driven and supported by capacities, manufacturing and measured returns, even if modest, to domestic investment. The opportunity of funds has to be enough to allow for some profit and high economic risk in foreign infrastructure that can support raw material supply and open market for manufactured goods.
Prebisch-Singer hypothesis of trade will explain this point. It was for the RBI to script the narrative. The future awaits us.