Here we are entering our “Winter of Discontent”, with sulking private enterprises and a bulging middle class whose aspirations are growing faster than moss next to a lake. Inflation, unemployment and stretched finances have pushed the Indian government to its knees in front of the industry, similar to the UK’s Callaghan-government in 1979. And all distress situations give birth to a hero. That same year, UK found Margaret Thatcher. India will find it’s Neo in a Narendra, or someone else, hopefully soon enough.
From the looks of it, what Britain experienced through the 60s up till the end of 80s, is very similar to what we have experienced here in India since the start of the twenty-first century. It started in UK with Harold Macmillan saying, “You’ve never had it so good,” , and in India the NDA claimed “India Shining” . Neither of them could save their faces for too long.
That was 2005 in India and 1964 in England, just before the elections. Congress-led UPA that took over, showed colours similar to the left-wing Labour Party that ruled England from 1964 to 1970. The Labour Party lost out after one stint, and while the UPA remained in power in India- the left front was no more part of the coalition in India. But despite the change, in both the instances, the governments stayed with populist policies and ignored economic logic, till it was too late to make amends.
You can’t order cheese and expect chicken. The Labour party paid the price for its economic policies in 1979, and in came Margaret. The UPA is also on shaky grounds, and Modi is being touted as the only one with all the solutions. Why wait for Modi, when you can use Margaret’s recipe?
If the situation is similar, so must the cure be. Thatcher reduced role of the state, ‘freed’ markets, tightened money supply and sold state-owned businesses to private enterprise. We have seen fuel, fertiliser and sugar deregulation to some extent. Outside of these, it’s fairly free market in India. A slew of interest rate hikes and disinvestment issues have been executed. So if it’s all being done, why isn’t India starting to shine again? Because, only time can turn a seed into a sapling.
The global context adds a compelling facet to the argument. In 1979-80, the globe had emerged out of a recession, the oil prices peaked only to fall for the next twenty straight years. The current global economy is showing similar signs of improvement and few deny that it’s just a matter of time before the tide turns. The tensions in the Middle East can only delay the inevitable.
While there may always be a better cure, till the time it comes up, there is no need to deprive the patient of the available meds. India knows the disease and has the cure. It just needs to stick to the prescribed dosage diligently, and avoid intermittent excesses (read: food security bill). Then, Modi can work his magic wand, if he gets a chance.
Afterthoughts! 