Two decades of Economic Reforms has helped discount at least one theory. It was always claimed by the proponents of Economic Reforms (they do even now!!) that liberalization and globalization would result in higher GDP Growth and the benefits would 'trickle down' to the common man. While the first part has come true, the second part has proved to be a mirage chased by the common man. His life has become more miserable as the higher GDP growth has brought with it higher inflation, while his plight has remained the same. Added to this, our country's fate has become so interwined with those of the decaying western economies, that a default by Greece leads to stock market crash and rupee devaluation in India. We hardly have any trade with Greece, and there is no reason why our economy should react to Greece defaulting, for being financially indisciplined.
The problem is that we have failed spectacularly to develop any core competency during the two decades of reforms, unlike China, which has focussed on low cost manufacturing ability, and has forced the high wage western companies to shift the manufacturing base to China. We can point fingers at the intolerent communist regime, but one needs to admit that China has indeed leveraged its strength.
India had the opportunity to be the IT focal point of the world and also a great financial hub. But we were content to be mediocre. Despite the earnings of the IT sector, one has to admit that our IT sector hardly created anything worthwhile, and they were none better than Chinese, using Blue Collar Engineers to produce programs based on low grade specs. No great IT discoveries were made in India. And the less said about developing ourselves as a Financial/Services hub the better.
The saddest part is that, despite evidence to the contrary, and with the economy in doldrums, we are still talking only about opening up the insurance, retail etc rather than on creating long term assets. In short, we are replaying the tape of the 1990s, that is a proven failure.
There is no informed debate about how to build the nation, either by the UPA or by the NDA, or by any of the Regional parties. The politics of corruption, mud slinging and one upmanship has ensured that we have missed the bus to take global leadership once again.
What a tragedy!!!
