Opinion Back to bad times

It is both ironic and surreal that the economic boom that began in the early nineties should start winding down under the auspices of the man who made it possible.

June 26, 2011 03:08 AM IST First published on: Jun 26, 2011 at 03:08 AM IST

It is both ironic and surreal that the economic boom that began in the early nineties should start winding down under the auspices of the man who made it possible. There have been hints of bad times since this year began. First,the economy slowed down,then came reports of foreign investors no longer thinking of India as their favourite destination. Now comes gloomy confirmation that foreign investors are no longer that interested in investing in India. This newspaper reported last Friday that India is now the worst-performing market in the world.

As someone who remembers what India was like before Dr Manmohan Singh introduced his economic reforms,I read the story with growing alarm. This sense of impending doom grew when I read that Pakistan had attracted more foreign investment in the past six months than India. I found this especially disturbing because I remember that when I first went to Pakistan in the early eighties,it seemed like an economic powerhouse compared with India. It had better roads,better airports,better cars and the average Pakistani seemed richer and better fed. When our boom years began,as a direct consequence of the reforms,Pakistans political and military problems slowed it down and by the late nineties,it was India that looked much better.

We may still have vast areas of poverty and horrible deprivation but we also have a huge middle class and on the whole India is more prosperous than it has ever been. So why are foreign investors fleeing and why are Indian investors beginning to be wary about investing in their own country? The simple answer to that question is this. The Government of India appears to have been on auto-pilot since the Bihar results dimmed Rahul Gandhis prospects of becoming prime minister and since the corruption scandals started tumbling out of government closets. When this happened,all three of the Congress Partys top leaders seemed to vanish.

The Congress Party is fortunate that our main Opposition party appears to be even more rudderless and adrift and exhibits an uncanny knack of always clutching on to the wrong issues. A good example comes from last week when instead of expressing concern over the economic downturn,the leader of the Opposition went on national television to make a melodramatic fuss about the alleged bugging of the Finance Ministers office. The BJPs role as our main Opposition party has been so unimpressive that it has been pushed out of the Opposition space by Anna Hazare and Baba Ramdev. Its pathetic efforts to jump on to Baba Ramdevs caravan made it look particularly silly. What persuaded Sushma Swaraj to hotfoot it down to Baba Ramdevs ashram in Haridwar on the very day that he announced plans for an armed rebellion? As for that business of dancing at Gandhijis Samadhi,it was beyond belief. With so much political nonsense going on in Delhi,it is not surprising that foreign investors have stopped taking India seriously. Our problems are not just to do with politics and corruption. The economic failures of Dr Manmohan Singhs government are even more serious.

There have been no economic reforms to speak of since his second term began. There has been almost no attention paid to the improvement of our ramshackle infrastructure and if there have been improvements in public healthcare and education,they have been infinitesimal. Had at least these things improved,there may not have been the public rage against the government that Anna Hazare and Baba Ramdev have managed to tap into.

Every Indian deals every day with some problem created by bad governance. The rich suffer slightly less than the poor because the rich can afford to buy water and electricity from private sources and they can afford to pay the bribes needed to make administrative processes work faster. Indians at the bottom of the economic ladder are ruthlessly squashed down as soon as they try to climb. If they open shops on city pavements,they are torn down. If they try to rent a hovel in some slum,they are asked for proof of earlier residence. If they try to learn how to drive in a city like Mumbai,they are asked to produce proof of identity.

It is this daily humiliation at the hands of insensitive officials that has caused vast numbers of ordinary Indians to support the movement against corruption. If they are angry now,they are going to get a lot angrier when the economy slows down and we go back to those pre-reform times when everything was in short supply all the time. Would our economist prime minister like to explain why things have gone so badly wrong and what he plans to do to rectify them? If ever there was a time for him to lead,it is now.

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