Opinion Looking back in wonder

India is also sui generis in cooling an under-heated economy before the financial crisis,by hiking interest rates before September 2008. UPA should claim undiluted pleasure at such crisis management,especially since the opposition (BJP,CPM) has imploded. At best,if one is sold on reforms,pleasure can be diluted because reforms are headed nowhere. But is one sold on reforms? Without reforms,the economy chugs along at 8.5 to 9 per cent. Without reforms,UPA is voted back. Why reform?

However,this is the small picture. In the big picture,in December 2009,one should look back at 2000. That looking glass has more of looking back in wonder than looking back in anger. (Osborne’s Look Back in Anger is apt,because it spawned a spoof titled Look Back in Hunger,relevant because of food price inflation.) In December 1999,no one expected many trends of the last decade. India Shining did happen,and not in NDA’s election-slogan sense. Who expected growth to break into the 8.5 per cent -plus league? Before Y2K,no one anticipated India’s BPO,KPO and software success or India figuring in US presidential election debates. We were still ecstatic about annual FDI inflows of $3 billion. FDI inflows of $35 billion and outflows of $15 billion were still in the realm of Chandrayaan,not to speak of the spate of mergers and acquisitions by Indian companies abroad. Who thought trade with China would explode on the scale it did,or that India would become increasingly integrated with East Asia? Or consider India becoming a significant exporter of petroleum products. Looking inwards,there was no Delhi Metro,no modernisation of airports in Delhi,Mumbai,Hyderabad and Bangalore and no low-cost airlines.

The road connectivity revolution through the NHDP and feeder roads,not to speak of telecom revolution (such as pre-paid),was still in the realm of speculation. Implications of young India and demographic dividend were imperfectly understood. All that is fine,but what about poverty and inclusive growth (not a buzz-phrase then)? Ten years ago,we were still arguing in the absence of data,since NSS (National Sample Survey) 2004-05 numbers were still missing. Ignoring issues about the revision of the poverty line (a la Suresh Tendulkar),all-India,there was a drop in poverty ratios from roughly 36 per cent to roughly 26 per cent between 1993-94 and 2004-05. To place this in perspective,in 1950,the poverty ratio was roughly 50 per cent and it continued to be roughly 50 per cent in 1980. The poorest 10 per cent of the population bought ceiling fans,bicycles,pre-paid phones and moved away from firewood to LPG. Provided there is something to trickle down (question mark in some states,particularly if per capita),does one need more evidence for trickle-down? Who expected priorities of the poor to shift and the explosion in primary school enrolment,or increase in private expenditure (even for the poor) on education and health? Nor was countervailing pressure (RTI,panchayats,civil society,media) completely expected.

T20 performance is always erratic. Empirically,countries that drive on the left of the road under-perform those that drive on the right. Both models of UPA drive on the left,and usually in second gear,when there is an expressway at hand. One should legitimately castigate UPA for non-reform and non-performance,but that’s the T20 angle. From the Test cricket angle,these trends of the last decade weren’t entirely predicted,at least not in aggregate,though a few might have been thought of. In many ways,that Test performance was independent of government and reflected unleashing of entrepreneurship. Had one extrapolated in December 1999,one would have been wrong. These trends weren’t linear,there was a structural break. It is no different in December 2009. No one knows where India (and the economy) will be in 2020. Per capita income of $2500 (today’s dollars),infant mortality of 35 (per thousand),adult literacy of 85 per cent,HDI (human development index) more than 0.8 and poverty ratio (with unchanged poverty line) of 12 per cent are eminently possible. Ten years ago,collectively,IBSA or

BASIC (Brazil,South Africa,India,China in different permutations) didn’t possess the aggregate clout it does today. Nor did India individually (such as G-20). Today’s clout is like some Nobel peace prizes,awarded not for what has been accomplished,but for what might be accomplished. In 2020,India should have more tangible assets to show. Let’s not forget December 23,1972. Chandrasekhar took 8 for 79 against England and that was Test cricket.

The writer is a Delhi-based economist

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