Waiting for Godot in India
India had its time in the sun. As a solid member of BRIC quartet, the Indian Prime Minister became a regular invitee on the top table of global economics and politics. The country emerged as a partner in democracy with the United States, a regional competitor to China, and started assuming some global role in Central and Northern Africa and in Afghanistan. Its urban middle classes looked stronger than ever. Indian students, buoyed by the rising income, stronger Rupee and upbeat rhetoric, flocked the Western universities. Its businesses started investing abroad, claiming limelight side by side with Chinese counterparts. For the last decade or so, everything seemed to be going right for India.
The risks were always there, though. India's growth was regionally imbalanced, and only the super-rich and the urban middle class were enjoying the fruits of this growth. While the media was busy counting how many Indians will make it to Forbes, somewhat rigging the numbers by claiming some of the Non-residents their own, the plains of Central India virtually seceded to the Maoist rule. While Middle Class Indians were enjoying the $2000 cars, Petroleum prices shot up by more than 50% in the space of a few years. For all the talk of India's progress, most investment coming to India were in the form of portfolio investment, inflating the stock prices and making the urban Babus with small portfolios feel rich, but the money remaining in dangerous, liquid state, to be withdrawn the day the global bankers lose confidence in India. Finally, India's infrastructure upgrade, much needed, came with its own parasite class. A new class of politicians, who are unafraid and unashamed of corruption, were being created: Those, who lived by their own vote-bank and as long as they could throw the crumbs at their home crowd, no one really bothered about what happened to the projects, or the country.
For most part of the last ten years, this picture was hidden. Obviously, smart traders were making money and no one wanted to hear the bad news. Indians felt good as their country was being touted as the next global superpower, even if that meant a final war with the much superior Chinese. The inflation was hidden, the consumption was highlighted. The great achievement of IITs were advertised, the poor state of general education omitted. There was much pride when India turned down global aid after the Boxing Day Tsunami: The poor people may have suffered, but this was a good way to massage the egos of newly aspirational, English speaking Indians. It was a self-fulfilling cycle of India hyping, which was proving to be good for a few people.
Indeed, this is not to say that these risks can not be mitigated. There were good news in the air too: The scepticism about inflation was generally met with a more optimistic explanation that this is happening because of structural reasons, as the rural unemployment reduces and we move to a fairer prices for grains, and one would have got the feeling that some movement towards a more balanced development is finally underway. This was the great redeeming hope for someone like me, perched out afar from home, that there are good things happening which we can't see. There were reasons to hope that there is a new leadership - how good it felt to see the ascendance of a new generation of Congress leaders uncorrupted by the past, modern and secular - which will eventually steer India to its deserved glory.
However, this is now turning out to be a wait far too long. The government continued to blunder along, taking wrong decisions at every turn, tolerating allies who are only interested in accumulating personal fortunes or political brownie points. For all the talk of good governance, the politics took precedence: The Congress party stood by the megalomaniac Mamta Banerjee (they seem to be paying the price now) to come to power in West Bengal, dumping the already impoverished state into futher depths of mis-governance and corruption. The leadership never materialized, and its struggle manifested itself as indecision or plain cover-up in public eye. Yesterday's display was only another example of how far this has now gone.
However, the risk now is that the times are not so good. This isn't a time when one wants to scare global investors, because if they lose confidence, they run. The doubts about India were persistent, not about its resilience as a country, but about the ability of its current ruling class - the government and its alternatives - to get anything done. The last thing the investors want to see is a show like yesterday's, when the government fails to pass a basic legislative reform like the Lokpal. The leadership deficit was all too evident on both sides and the opportunists like Ms Banerjee was far too prominent. In summary, it was not about who wins or loses inside the Parliament: It was about the world starting to see the flip side of India's story.
The Mayan prophecy may be wrong. India's story may also have a twist in the tale. However, it is a wait which has gone on for too long: Let Godot show up now or we all perish.