Makings of a working Indian economy

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To understand the Indian economic system, one must stop believing in the make-believe world of modernism

The general economic outlook across the world, to put it mildly, has consistently been a low key affair over the last six months. Growth in Europe has been like a trickle to say the least. Whether it was the threatened exclusion of the Greeks from the European Union or the exit vote of Britain, not to talk of rumbling in smaller States of Europe, the state of the European Union continues to be mixed.

The financial year started with the European commission foreseeing 1.3 per cent growth this year. This was modest by European yard sticks. However, the question of European reform was not much in the air.

Notwithstanding the ambitious announcements of the European Central Bank of assets management in January 2015, nothing much has changed on the ground. The structural primary Budget balance continued to be vague. The uneven application of the European Union’s financial rules was not of much help.

While Europe was getting heated, a good portion of the breed of economists were at its favorite’s game of wanting to outguess the economy. For one year, China’s economic growth has been at its lowest point since 2009. Whether one is a China-watcher or not, the economic health of that country impacts a very large part of the world.

This writer recalls the statement of a leading figure of a major global asset management company to the effect that India had slowed down. In going through his statement again, as reported in an economic newspaper, it was difficult to find where he had seen India’s economy gather speed and why he felt that around mid-2015, India was losing its momentum.

Be that as it may, the truth of the situation is that the complexity of the Indian economy shrouds it from any rigorous econometric analysis. For those who believe in the technological panacea of growth problems, it is difficult to gain insights into two bleeding spots of the Indian economy.

A core problem of the Indian economy is the under-performers who man key positions and have little comprehension of what efficiency is required to perform. It is also difficult for such people to appreciate the significance of the unorganised sector and the dominance it has in keeping the bread and butter of so many households going.

Its role in exports too is  well-acknowledged to be repeated. The problem lies elsewhere. The monetisation of this process is far too complex to be factored into the national earning index.

The era of models of automation and robotics process leading to cognitive automation may appear fanciful but are, in many manners, irrelevant to the scale and content of nearly 40 per cent of the Indian economy.

Careers are being made by talking of process automation index. There is nothing against it. After all it’s fashionable to talk of this from America to Japan. However, to come to grips with the Indian economy, one needs to understand that, say, the wholesale paan (betel) dealer has more money to invest than dozens of automation experts!

The sooner we stop having exclusive blind faith in the make-believe world of modernism and post-modernism, the easier we can come to grips with the realities which dominate the unique market and economy that is India.

We need an index of assessing the wealth available, say, in street food vending as well as the loss of wealth because of the sheer cavalier approach to efficiency/quality concerns in the organised sector.

The economy cannot and will not grow only by seeking political capital out of an obsessive pursuit of finding jobs for family members of those who approach us, kith and kin, caste conglomerates and religious affinities of those whose support we seek.

While such compulsions are comprehensible, converting them into profitability will only happen if a basis minimal standard of skill competence and performance-orientation underline the performance environment. Non-performance affinities can promote job-grabbing in the first flush but in the long range they will boomerang causing organisational fatality.

The marvel of the wonder-that-is-India is that, where almost everyone is affected by the syndrome elaborated above, there almost appears, a conscious conspiracy to deny the syndrome itself — in operational terms.

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