INDIAN ECONOMY: FUNDAMENTALLY SOUND?

[Caution! Readers are strongly advised not to become judgmental about current economic situation based on this article, as I have deliberately avoided Buddha's middle path approach and relied on criticism.]

Tragedy of a liar is not that no one believes him/her, but the fact that the liar starts to believe his/her own words. This statement seems to be correct in the case of Indian government while dealing with the current economic situation. The number of times these politicians have talked about fundamentals of economy remaining strong that they actually have started to believe as a true fact. Are fundamentals of our economy really sound or is it an eyewash to boost the confidence of fellow Indians and investors outside? This is the question looming large at this juncture.

Indian economy is in shamble. GDP growth is at all time low (post 1991) ( first quarter of FY 2013-14 reported only 4.4% growth). Growth is sluggish but our PM is optimistic to achieve a growth rate of 5.5% to 6% by the end of this financial year. Reason being: "Fundamentals of Indian economy remains strong."

Another problem the country is facing right now is the Current Account Deficit (CAD). It is behaving like "SURSA OF RAMAYANA" ( who had the capability to expand her jaw/mouth, each time Hanuman expanded it's body). Whenever government intervenes to rein it, it further gets widened. Isn't the situation demanding policymakers to act like Hanuman ( who countered SURSA by shrinking his volume)?

Here comes the real issue. It is the falling value of rupee. Rupee seems to be enjoying the free ride under gravity. It is about to cross yet another psychological barrier of 70 ( currently hovering around 65- 68). Someone, out of sarcasm, tweeted "PROBLEM WITH RUPEE IS THAT IT IS NATIONAL CURRENCY. LOOK! WHAT HAPPENED TO OUR NATIONAL ANIMAL TIGER". I would further like to add in this about the fate of our national sport ( contrary to the fact that we had learned in our schools and G.K books, Ministry of Youth Affairs And Sports in a reply to an RTI query mentioned that India has not notified any national game). This crisis situation could have been turned into an advantageous one, had our export flourished ( although software industries are gaining a lot at this moment, stable currency is all that everyone wants). And they say our fundamentals remain strong.

Out of many solutions, the one on which our policymakers seem to have relied upon heavily is to liberalize the norms to bring more FDI, FIIs along with increased External Commercial Borrowings. In other word government is arming itself with tools to borrow more from different markets. And if this is true then shouldn't we conclude that government is following an old adage of Sanskrit which says "Rinam kritva ghritam peebet" ( eat butter, even if you have to borrow). All this is happening because of the illusion that our Fundamentals Remain Strong. Some critics call it POLICY PARALYSIS. I would rather call it "FUNDAMENTAL ATTRIBUTION ERROR" by which one blames the external factors overlooking the internal ones.

Inflation is another challenge which is presenting catch 22 situation in front of RBI. Whether to go for growth or to go for reining inflation is the million dollar question. So far RBI has done a commendable job (at least in maintaining it's independence); nevertheless, it has not been successful to achieve rupee stability.

Newly appointed RBI governer Mr. Rajan has said that "Our task today is to build a bridge to the future over the stormy waves produced by global financial markets." I would like to urge Mr. Rajan that the foundation of this bridge must not be laid upon wrong premises. It has rightly been said that crisis presents an opportunity. We must take a look at our fundamentals and address the concerns in an unbiased manner.

Sports and the Politics

Thousands of people have gathered inside a stadium of Rome to witness a thrilling fight. The fight is scheduled between two gladiators whose masters are well known for their rivalry. As the fight progresses, spectators start enjoying. Finally, one of the gladiators gets defeated and as per the tradition the winner waits for his master’s command. People in the stands are demanding clemency but the master orders to behead the defeated gladiator and thus he loses his life.
Again, thousands of people have gathered inside a stadium in India. But this time the mass assembled to witness a nail biting cricket match to be played between India and Pakistan. Among the viewers are the Prime ministers of both the countries. Match progresses and excitement reaches the peak and finally Pakistan gets defeated. After the match both the Prime ministers stated that it is the spirit of game which won and thanked to the players as well as people of both the countries.
Though above incidents are separated by hundreds of years on the time scale, there is a stark similarity between them. In both the events the politics had their role to play in sports, nevertheless, in a different manner. In one event politics made the defeated gladiator to lose his life, while in other it brought the people of two nations together.
Sports and politics are two different words but they are often intermingled. Since the era of early civilization politics has its say in the sports. The use of politics in sports is so frequent that it has evolved into a new word known as sports diplomacy.
Sports diplomacy is being used as a potent tool by which country’s national interests are promoted. Sentiments of people are attached to the sports. These sentiments are used as a strategic reaction by sports diplomacy. Sports, like war, are used as a tool to achieve political objectives. Due to this one is tempted to raise the question “how far is it justified?”
Those who support the idea of using politics in sports often claim that sports are not above the law. National interests are supreme and the sporting spirit should be kept within the ambit of national interests. Based upon this argument they justify the sacking of the coach of Iranian football team as he had wished a happy new year to his Israeli counterpart. Besides they also contend to change the law, as children are torn away from their environment and culture to join the business and glamour provided by sports.
But, during all these arguments they seem to have lost the meaning of the word “international integration”. In this globalised era where trade and commerce are being used to increase the people to people contact, to sort out differences and to achieve the spirit of “Vashudhaiva Kutumbakam” (whole earth is a family). In the prevailing scenario why one should not use the sports? Sports, if played in its true spirit, without the interference of politics, has an inherent capability to bridge the gap between nations and to arouse the sentiments in a positive manner.
By sacking the coach or not allowing the two countries to play against each other is against the spirit of the game. We are setting the bad precedents in which the people of the involved countries are the ultimate losers. They are missing a chance to feel the thrilling excitement that would have arisen, had the two nation played against each other. And who knows, in long run this sporting event may lead to a friendly nation.
We do not need a law to keep children away from the sports on the above mentioned ground. What we need is to let children learn the lessons of self esteem, harmony etc. which sports teaches to everyone.
Hence we need sports for the sports’ sake, where the people feel rejuvenated, where the determination to never give in and the team spirit are so palpable that the viewers are forced to learn these ideologies. This can be achieved only when politics has been kept out of sports. let us keep our debate alive, but separate. There is no need to entangle both.