Observations, deductions and feelings fueled by tequila, tea and tobacco

Hope in disappointment

In Nation, Politics on May 22, 2009 at 21:42

The UPA has won.
The markets have managed to sustain their largest 1-day jump ever.
Hope is ruling and I’m hoping it succumbs to the demon of reality. In the disappointment that would arise, is the true hope for our nation.

Hope is ruling in voices of all the media presenters as well as many industry barons. They want reforms – fast and radical. They want everything the government can do to help their industries back on path to growth and their equity prices through the roof. They want to go generate as much wealth as they can, in as little time as they can, with as little interference from the bureaucracy as possible, and as much help from the government as possible.

Infact, they want so much from the new government that they themselves wouldn’t be able to agree on all that they want. For instance, media has been pushing for more spending and benefits to provide stimulus to the economy while also been cribbing about government borrowing siphoning off liquidity from the market, esp debt markets. Mr. P. Chidambaram gave an apt response to the enormity of the task and conflicting demands by all quarters

“You can’t have it both ways, when you are stimulating demand, when everyone has agreed that demand has to be stimulated, taxes have to be cut and we have done all that, it will have an impact on the fiscal deficit number.” (here)

Our neighbourhood is troubled – radical islamists to the northwest and within, maoists to the north and within, right-wing nationalists to the south, a military junta and an unstable overcrowded neighbour to the east. If we are to not fall to their fate and remain the strong liberal light of hope in their midst, the answer, indeed, has to be primarily economic and not just military or political.

Our self is troubled too – industrial growth has been strong but not yet strong enough, our demographic dividend is fast becoming a liability with little or no increase in employment despite growth, traditional farming is struggling, maoists are burning the east, we are still at unease with radical religion (islam & hindutva) and regionalism (marathi, gujarati, uttar-bhartiya, assamese, punjabi, tamils, etc), northeast keeps smouldering while waiting for rest of India to recognise its presence and urban poverty another powder keg waiting to explode as rural flight gathers pace. And the solution to these issues too will primarily, though not solely, be faster and widespread generation of economic opportunities.

True hope lies in disappointing not just some, but most of the people backing the current rally. And there’s plenty of reason.

We need a lot more of infra that the chatterati demand – Highways, Ports and Airports. But we also need much more of infra that they won’t speak of – rural roads and electrification, efficient water, power & waste management systems and low cost urban housing.
We need to reform our healthcare system but not just to build world class tertiary hospitals catering to medical tourists and upper middle classes. We also need to provide widespread, if not universal, good quality healthcare access.
We need extensive labour reforms to encourage employment growth in formal sector. But we also need additional taxes to provide for a wider social security net.
We desperately need wider reforms and liberalisation in Education. But this need is not just to assist in skimming off the cream in technical & management education or for establishing education franchises for urban India. This liberalisation is needed to get quality affordable education to the vast segments still under-served. Above all, these reforms are required to help bridge the wide gap between the skills our education system imparts and the skills that our industries demand.
We need a smaller government but we also need efficient organisations outside the government to provide the multitude of services that government today provides to even the lowest, most unprofitable sections of the republic.
We do need reforms that increase the rate at which our economy generates wealth. But we also need reforms that ensure that more of that wealth is spread wider.

That is why I have hope in this government – it knows all about walking the middle path. Unlike the left, it doesn’t believe in destroying wealth to spread around whatever may remain. And unlike the right, its India doesn’t just shine in stock markets, IT parks and urban middle class households. This isn’t a perfect government but one more rooted in reality than any of the alternatives. And the electoral performance of UPA, specially the Congress, in both the fast-growing megacities (except Bangalore) and the left-out hinterland is testament to the fact.

In disappointing those whose hope has driven the recent market rally and much of public discussion, and choosing the middle path that would enable both faster generation and wider distribution of wealth, lies the real hope for our nation. Because the responsibility of a government to the nation is the one defined by these words from the preamble to our constitution and not that demanded by the media and the powerful.

Sovereign, Socialist*, Secular, Democratic Republic

Hoping for hope, and for some disappointment.

Disclaimers: I have always been a Congress supporter so views may be skewed. And despite what I believe in, I’ve used the hope-driven market rally to make some money and am constantly looking for employment/entrepreneurial opportunities in areas that are clearly aligned to the current wave of hope.

*I, personally, am not comfortable with the Socialist bit and can easily suggest ignoring it since it was part of the controversial 42nd amendment. But I do realise there are others who are just as uncomfortable about Secular bit and would be equally willing to ignore it, much to my discomfort, citing the same alibi.

Post-Thought: Most of those who’ve been asking for fast-and-radical ‘market-friendly’ reforms seem to be in one of the three baskets:
1. Those who are knowingly apathetic to the state of not-haves and don’t give a hoot what happends to them. These are the ones who’ll fund the lobbying groups to push their cause while collecting more and more money on the side.
2. Those true believers in laissez faire who believe who think that if they create enough wealth for themselves, some of it would inevitably trickle down – ignorant about whether the masses would be willing to wait till it arrives. They’re the ones who provide samples of neutral voices aiding the said lobbying groups.
3. Those who’ve not much interest in generation or distribution of wealth, but are punters interested in reaping the benefits of arbitrage opportunities that any fast-and-radical reforms would bring.

Post-Post-Thought: It is also heartening to see atleast some industry leaders come out and try to temper the media fueled hope-surge with doses of reality.

  1. Well, the markets and the media responded predictably to the Budget. I was euphoric. Not because I was proven right. But because finance minister did the right thing.
    What I further liked was the sulking acceptance by most media pundits of the fact that a budget is a financial document and not a policy document on all sectors of the economy. Now its up to the respective ministers to guide their respective sectors.

    Ofcourse, I also like it because I could sell and re-enter the markets at a much lower level. My recent re-selling ensured I’ve earned atleast some in the last 2 months to make up for the lack of a regular salary.


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