India’s political class has failed us. Why it is important to fix collective responsibility is because politicians are past masters at passing the buck. Since they are all elected to parliament and state legislatures and collectively represent the people of the country, they are collectively responsible for where India stands today — a country with decelerating growth, no jobs and farmer distress.
Political leaders across party lines have sold the resurgent India line to the people of this country with terms like ‘demographic dividend’, which no one mentions any more today. For instance, Shashi Tharoor wrote in 2017: “Yet, the best is yet to come, since age is on our side. We are the youngest major economy in the world, at a time when many of our potential Asian competitors – China, Japan, South Korea – are facing a serious demographic squeeze, and the rest of the world is aging.” Similarly, Prime Minister Narendra Modi, in the same year, told a large gathering of Indian diaspora at Madison Square Garden in New York that with 65 percent of India’s population under the age of 35 years, the country stood at the cusp of rapid progress.
What has come of these contentions? There is no evidence of any such dividend being reaped today. The promised dividend has turned into real distress. Job creation has slowed down, if not shrunk — though there is nothing beyond anecdotal evidence of this, as no credible data has been provided on this parameter in the recent past. What’s also concerning for both domestic and foreign direct investors is the policy risk — rules can flip on a dime, like for Wal-Mart after it invested big bucks in Flipkart. Such policy shifts have happened across and within regimes, so no political block can claim not to be guilty of this.
India needs growth-conducive policies and freedom of enterprise with clear and predictable taxation systems. The small and mid-sized businesses that we were looking to protect from the Amazons and WalMarts of this world have been decimated by the ever-changing GST and the liquidity crunch. This begs the question: Do we really need restrictions on foreign direct investments in productive real assets — as long as we aren’t creating monopolies and are ensuring a minimum export commitment? Money once put in, is in.
Another big opportunity that has emerged as a result of the deleveraging of exposure to China by global enterprises is not being capitalised on by India. And thinkers with leanings towards various sides of the political spectrum have called for the opportunity to be ceased. But we are letting another golden goose slip through our fingers.
The time has come for the political class of this country to start making a real difference, together. All this talk about India becoming the third largest economy in the world and so on is humbug. India has 17.74 percent of the world’s population, but contributes only 3.3 percent of the world’s GDP (2017 data), and even at purchasing power parity (PPP) just 8 percent of world GDP (IMF data).
Let’s wait for the day when India also accounts for 18 percent of the world’s GDP before we start tom-toming. The time today, is to seize the opportunity and take decisions that will put the country on a path to high and sustainable growth with predictability. The time to write this nation’s destiny is now. And the onus of this will rest on the shoulders of all those who get elected to parliament this year.