Indian Economy is not as comfortable as many make it out to be. 6 years of Congress rule has led to inefficient social sector spending, yo-yo policies on disinvestment, burgeoning subsidies, tinkering with administered prices, spirallying fiscal deficit and lack of fiscal discipline, knee jerk monetary policies, high inflation and we have a situation which is not quite unlike 1991 when the economy was in shambles. Only saving grace is the 7% GDP growth and the comfortable Foreign Exchange Reserves. A latest UN report has revealed that an additional 34 million people in India went BELOW the poverty line in 2009 as compared to 2008. In a country of 1.1 billion people nearly 408 million people are believed to be below the poverty line, which is about 37%. And remember, the cut off point is $ 1.25 earnings per day which amounts to Rs 60. And we know what one can or cannot do with Rs 60 in India of today. There has been a hue and cry to raise the cut off point to $ 2, that would have raised the number of people below poverty line to nearly 48%. Two decades of reforms and growth has not made life easier for the poor. In fact they are worse off.
The root cause of the economic crisis in 1991 was attributed by the then Finance Minister to 'large and persistent macroeconomic imbalances and the low productivity of investment, in particular the poor rates of return on past investments. There has been an unsustainable increase in government expenditure. Budgetary subsidies, with questionable social and economic impact, have been allowed to grow to an alarming extent.' The then FM is the PM now, and the wheel has come a full circle. All the problems mentioned above which were tackled to some extend during the first decade and a half of reforms have returned with a vengeance due to vote bank politics played by Congress.
As a nation we need to improve our ROI, but we first we need to cut waste to make surplus that can be channeled for funding growth related investment. The delivery system is leaking and leaking bad. Till we, as a nation, show a collective will in building the nation by taking on the core issues of fiscal discipline, waste reduction, corruption, quality of work, purity of intentions, an understanding that the poor do not need doles but employment that allows them to lead a decent life with dignity - I am afraid we will still be having all these problems a decade or two from now. Problems cannot be wished away. They need to be faced and solved with an iron will. For that , we need a leader with a vision.
