Saturday, February 05, 2005

"Hindutva Rate of Growth"

Great is the sword and mighty is the pen,
But over all the labouring ploughman's blade
For on its oxen and its husbandmen
An Empire's strength is laid.
- Rudyard Kipling.

For over 5,500 years India has been a pre-eminent civilization.

Throughout history there has seldom been a land of such great wealth and richness, thus one of the reasons for it being so attractive for plunder and conquest by some of the more war-likeraces beyond (Yes, you, Afghan man, look at me when im talking to you and wipe that smirk off your face).

When the Persian Nadir Shah sacked Delhi in 1739, massacring some 30,000-150,000 inhabitants, it is said that so much loot was plundered (a vast wagon train of 10,000 heavily laden elephants, 7,000 horses and 10,000 camels filled, including the famous Kohinoor diamond and Peacock Throne), that the people of Persia were exempt from tax for four years.

Unfortunately Europe knew of this wealth also, thus they set sail to reach India, in the process finding a completely unknown new continent. When they finally made it to the real India, they realised that they had the good fortune to arrive at a point in time when India was once again ripe for conquest. There was a power vacuum, the mighty Mughal empire had collapsed after Aurangzeb's vainglorious Islamic fanaticism and relentless attacks in response by the Sikhs in the North, the Rajput confederacy in the west, the Maratha Peshwa's in the southwest, and the rebellious muslim sultanates in the south.

In 1750, India produced 24.5% of the world's economic output (Huntington, 1997:86), while Great Britain had a little over 2%. India also had the world's largest textile industry, which was a crucial first step for Industrialisation. By 1947, the British imperialists had completely distorted the Indian economy and destroyed the textile industry to fuel their own Industrial revolution,thus reducing India "the Jewel of the British Empire" to the status of a pauper with less than 3% of global output, while Great Britain rose to 21%.

This leprous daybreak, dawn nights fangs have mangled
This is not that long-looked for break of day.
Not that clear dawn in quest of which those comrades
Set out, believing that in heavens wide void
Somewhere must be the stars last halting place
Somewhere the verge of nights slow washing tide,
Somewhere an anchorage for the ship of heartache.
- Faiz.

Thanks to the disastrous economic policies of the congress party, India's Independence in 1947 was essentially a false dawn as it wasted its first 40 years of freedom wallowing in poverty, chasing the mythical socialist utopia, while its share of world output declined further relative to other nations.

Under Jawaharlal Nehru's brand of fabian socialism, India became inward orientated, the government controlled the commanding heights of the economy, discouraged foreign trade and trampled on the spirit of entrepreneurship, but was too busy riding its bureaucratic pony to notice the damage to the very moral fiber of India.

With the policy of Import Substitution Industrialisation (ISI), we went about achieving our aim of self-sufficiency. The problem was that we started at the wrong end. Nehru believed in using machines to make machines. Thus while the ISI policies of nations in East Asia focused on the replacement of consumer goods, India had a disproportionate focus on capital goods. Because this didn’t leverage India's abundant factors of production (ie: cheap labour) and due to the fact that there was only a small market for these goods, they were an enormously inefficient waste of scarce resources.
The other mistake was the fact that we held on to the policy of ISI for far too long while nations of East Asia initially built up their industries then let them trade and compete with the world.

By the mid 1970's when the economy stubbornly refused to grow faster than 3%, which is disastrously slow for a developing country with a burgeoning population, rather then admitting the failure of their borrowed socialist ideology, they instead termed it the "Nehru rate of Growth" "Hindu rate of growth" and put the blame on the supposedly static and backward nature of Hindu society.
For them the solution to the mess they created was not a free market with Indian characteristics, but rather more socialism, thus India was condemned for another decade or so of abysmal growth, till a balance of payments crisis in 1991 finally put a end to the madness and forced the Indian government to begin dismantling its socialist legacy and transition towards a market economy.

Since breaking free from the shackles of socialism and unleashing her people's creative energies,India has marched ahead with rapid economic growth of over 7% year on year, which should rightly be called the Hindutva rate of growth.
But even with the impressive economic achievements attained since 1991, there still are many pseudo-secular socialists who constantly decry the reforms as being anti-poor or pro rich. What they always fail to ever mention, is how or why the poverty level has come down from 40% to 23% in the last decade. What the never explain, is how a bloated inefficient government and bureaucracy that institutionalised corruption on a massive scale, helps the poor, how loss making public sectors enterprises that are propped up by they taxes pay is good for the poor. As India prospers and makes the 21st century hers, I’m sure these traitorous Indians and their disastrous borrowed ideas will eventually die a natural death.

Last year the 8.5% growth rate was the highest ever since the reforms. The demise of the Hindu nationalist BJP government in the elections though was a enormous setback, especially in light of the privatisation plans, that had already started paying dividends and would have gone an enormous way in restructuring India's finances and economy.

To keep the momentum going, India must obviously continue reforms and attract nvestment especially in key infrastructure bottlenecks.
Like many economists i also believe that India currently is at an inflection point and ready to take off. China, which started its reforms over a decade earlier, was at a similar point to where India is now in 1992, with FDI at around $11 billion, when its economy took off and never looked back. Today its attracting well over $55 billion in FDI, which is impressive considering India and China were roughly even in most statistics in 1980.
A chinese proverb says "may you live in interesting times", in the 21st century for India and China alike, im sure it will be.


Post a Comment

<< Home