This is exactly how The Economist puts it (See article). The significance of this is immense: First time a major international publication is writing off India and blaming it squarely, and rightly, on its leadership. The everyday despondence of the aspirational Indian middle class is now official.
Indian leaders, as The Economist puts it, continues to show 'Brezhnev grade' complacency. There is something in the Indian psyche, which always believes in eventual rise of India as a major world power. This is not about an Indian version of exceptionalism, but more of a manifest destiny, a deeply irrational expectation that this would happen regardless of any efforts as this is 'written'. Deep down, India's leaders seem to believe in this too, and they are blaming everyone else but themselves for the recent slow down.
However, a country's economic future, and indeed its global power, is crucially dependent on its leadership. Alan Beattie recounts the story of Argentina in his excellent False Economy. Indeed, in the 1950s and 1960s, the BRICs of the day were Brazil and Argentina, only to drop out of world's view on the back of bad governance. Despite the demography, India may follow that path. However, because of the demography, such a fall would be catastrophic.
I have recently read Jim O'neill's The Growth Map and have become reasonably familiar with the story of origination of the BRIC model, and its follow-up, the N-11, model. At the core of the economists' optimism lies a fairly simple belief that a country with lots of young people will, if it can manage to improve the productivity of its populace, do well. The simple equation of demographics and productivity lies at the heart of this model, and all the government needs to do is create the opportunity and facilitate the rise in productivity. As long as the governments can create the opportunity and facilitate the rise in productivity, the rise of big countries like India and China is a no-brainer. However, on the same token, if the government gets in the way, as the government in India is indeed being an obstacle, the demography becomes a problem: The sea of human resource turns into a multitude of disaffected revolutionaries. That point, the only thing the governments can do to save itself from violent retribution is to find a common enemy, as was the case of Jews and slavic people in Hitler's Germany. If we allow India's growth story to degenerate, it will not end up in just pessimistic newspaper stories; it will lead to violent social upheaval.
It is clear that India has a leadership problem. I watched with fascination a Q&A session by West Bengal's Chief Minister, Mamata Banerjee, supposedly one of the most influential politicians in the country. She stormed out of this session on Live TV (Watch it here), possibly a first for a leader of that pre-eminence, as she was unable to handle simple queries from college students about the conduct and performance of her government. I watched this with a god-help-India kind of feeling: One knew about Mamata's volatile nature, but the apparent onset of fascism - where any question is labelled to be anti-state - and the relative indifference of people to this alerted me of not just the economic problem, but also the political problem Indian democracy seemed to be facing. What makes this worse is that the apathy of Indian citizens in involving themselves in the political process: Most people want to think that the politicians do not matter and want to live life oblivious of what they are doing (and, some, like me, want to stay away and believe that the problems won't affect them). This is indeed the reason why the state is handed over to the incompetent, intolerant and dishonest politicians, such as Ms Banerjee, and this is precisely the reason we are where we are.
Is there a silver lining that we are missing? In the current global climate, the price for populism is going to be high. India indeed looks rudderless, and even the usual fascination with Nehru-Gandhi clan is also fading. India's democracy, and indeed its very survival as an unified state, seemed to be in existential danger. All of this seems indeed very negative.
The only positive trend, however feeble, is the emergence of some local politicians who are willing to be accountable to their people. They are still very marginal, and are often crowded out by the big and the connected. However, the democracy, in its chaotic form, is a strong, self-sustaining system, and at the very moment an existential danger is posed, it is developing itself a defence by bringing forth people's expectation and reconstructing the local politics, somewhat under the rudder of the bigger bosses. It is this trend which deserve all our support and all the media attention - of politics that is delivering rather than the circus that Ms Banerjee's lot runs - and this is what will, if India has to succeed, deliver it into prosperity. Let's keep hoping.
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