I must confess that I am one of those people who are suspicious of surveys, particularly those grand "state of the economy" ones that claim to have pat answers for everything. My statistics teachers in college tried hard to convince me of the power of scientific sampling but I still find it hard to believe that the views of 2,000-odd people represent those of close to 1.3 billion people. Perhaps I am being naïve.
The US non-profit organisation, the Pew Research Centre's survey, released a couple of weeks ago with the title "India and Modi: The Honeymoon Continues" is the latest such "grand" survey to hit the stands. Pew has built quite a reputation since they started in 2002 and has similar surveys in 93 countries. The India survey was carried out between April 7 and May 24. You cannot get more current than that. The sample size is 2,474 and the sampled respondents were interviewed face-to-face. Another advantage that Pew's surveys have is the fact that they ask a similar set of questions in other economies that facilitates comparison across countries.
As the title suggests, the upbeat mood about the economy has sustained. Eighty per cent of the respondents felt that the current state of the economy was good compared to 57 per cent in 2013. More importantly, they were satisfied with the direction of the economy, both in the long term and the short term. The long view is particularly interesting. Seventy-two per cent felt that the next generation would be better off than them.
The sense that India plays "an important" role on the global stage than it did 10 years ago also strengthened with 68 per cent sharing this perception. The contrast with the US and Europe that polled 21 and 23 per cent, respectively, on this is stark to say the least. If the survey did take into account the responses of the non-metro dwelling common man, the awareness of the shift in global power from the West to the East is not apparently confined to the armchairs and seminar venue of Delhi and Mumbai.
However, it is good to take note of the dissonances in the responses. (These are incidentally quite common in broad-ranging surveys such as this but important nevertheless). Despite the bullish view on the economy, 81 per cent of the respondents cited the lack of employment opportunities as the second-most important domestic issue.
It might help to look at another set of questions to explain this disconnect. While the sample identifies unemployment as a key problem, there is strong support for the way that the prime minister is addressing this. Thus, on the unemployment issue 62 per cent of the respondents agree with the way the government is tackling the issue. This has risen dramatically from the past. However, unless there is an actual improvement on the ground going forward, the bullishness could diminish.
Protectionism is on the rise not just in the developed economies battered by financial crises but also in some emerging markets. Not so in India though, according to the survey. Roughly half the sample thought that involvement in the global economy is a good thing since it provides India with new markets and opportunities for growth. Only 25 per cent thought that it is bad because it lowers wages and costs jobs, and the remaining 23 per cent were in the "don't know" category.
There could be a number of reasons for the support for globalisation that seems to buck a more general global trend. First, India was far less affected by the global financial crisis of 2008 than others because of the large share of its domestic market and relatively tight financial regulations. Second, although external factors did a play a major role in the slowdown that affected India from 2012, the popular narrative or perception about was that it was the result of shoddy policy-making and dodgy deals between the government and business. All these factors were largely internal, with little to do [inserted:] with globalisation.
Third, the fact that the India is not a major player in the global commodities market, unlike say Brazil or Russia, meant that the economy did not get burnt by the sharp fall in global commodity prices over the last couple of years. The commodity price decline was, one could argue, yet another blot on the face of global integration, both real and financial. India did not face this and benefited from developments such as lower oil prices.
Finally, among the young, college-educated respondents in the survey, among whom PM Modi had the highest approval ratings (according to the survey), the stereotype of a "good job" seems to be one in relatively technology-intensive service segments such as information technology (IT), IT-enabled services, and back-end pharmaceutical research that survives on exports. The political implication of the growing domestic support for a more globalised world could be the need to defend freer goods and capital flows in our foreign policy agenda.
I was surprised and heartened to see two things in the survey. "Air pollution" is on the list of top domestic issues, beating even communal relations. As urbanisation progresses making cities stronger vote banks in the process, air pollution and the quality of urban life in general could become a serious issue over which political battles are fought. Whether mainstream political parties address this adequately or whether this spawns more "specialist" movements remains to be seen.
What was really unexpected, though, was that global climate change was seen by the respondents as the most major international threat to India, piping the threat from Islamic State to the post. Air quality and change have historically been seen as somewhat soft issues both in domestic political discourse and also in foreign policy. If the Pew survey is right, then these issues are acquiring the importance and legitimacy that is long due to them.
The writer is the chief economist, HDFC Bank. Views are personal
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
