Movies sometimes tell us what we should and shouldn’t do. Considered as one of the greatest movies ever made, Gone with the Wind for me was not so much about a love story or a civil war epic, as much it was about an opportunity lost. Defiant Scarlet, the main protagonist in the movie, runs from pillar to post trying to find love and happiness, but in the end she loses everything.
The parallels are somewhat similar between Scarlet and India. India’s public policy appears so flawed that in the bargain we are losing our competitiveness, and our growth. (The first quarter’s GDP grew by 4.4%, as against an expected 4.7%.) India is not putting its money to good use and instead is squandering away the opportunity to lay a good foundation for the future.
Countries all over the world are doing what is required to fix their economy. Some of them use really tough measures like austerity and spending cuts, others are pumping in more liquidity, and so on. But all of them have one common agenda ie to try and guide their economies back on its feet.
Everywhere you look, countries are addressing their economic challenges. The US has pumped more than $US 4 trillion to save its economy from collapse, to bring in new competencies, to make it stronger. (The US Fed’s balance sheet has ballooned to $3.65 trillion which is more than three times India’s GDP.)
Such massive doses of liquidity are bound to cause disruptions all across the world, especially in countries that are starved of dollars, or countries that don’t have the dollars to pay for oil and other imports.
Now the US unwinds, and India is least on their agenda. A member of the Fed said that “The fed was created by the Congress for America.” So they are going to do what is best for them. And if it means tapering or even unwinding the QE, they will.
The European economy too injected liquidity to save some of its member countries from going bankrupt. Japan opened its own version the liquidity tap to depreciate the yen in a bid to boost their economy.
All economies are doing what they can keep themselves in the race of competitive advantage, or to keep growth engines chugging and to raise their standards of living of their people.
India is doing just the opposite.
There’s this age old saying, “If you give a man a fish, you feed him for a day. Teach a man to fish and you feed him for a lifetime.”
Instead of investing in growth and infrastructure which can create jobs and employment we are instead worried about feeding nearly 67% of the population. The weak and the marginal need to be fed, but the hale and hearty…come on!
We have a huge population. It can be an asset or a liability. If we teach our people skills that can be gainfully employed, we will create a strong and vibrant workforce. We can produce the goods that the world wants and raise our employment and standards of living. That will help us more in the long run than anything else.
