Talking Shop: Promised succour

“We start 2009 in the midst

of a crisis unlike any we

have seen in our lifetime,

a crisis that has deepened

over the last few weeks.”

― Barack Obama

Having read the above historic and chilling quote, now let’s fast-forward some 14 years. Ironically, when none less than then-United States President Barack Obama passed this near-nut-mutilating statement in 2009, we Indians still weathered the global financial storm better than everyone else. That’s because the Government stepped in with resolve and purpose, staved off economically-invasive and -divisive forces and created a national and international cocoon that saw our country continue to unravel silk thread and gorge on Butter Chicken. With these two most important mainstays being protected, India marched along the road to greater financial opulence and temerity.

Let’s go back some more years, in fact, many, many more, back to the 1920s, the so-called ‘Roaring Twenties’ of the United States. This nation was then living in the lap of near-lasciviousness and obscene luxury, with the financial sector in the nation thriving beyond belief. Loans and fund extensions were given to anyone who deigned to ask for monies, and since there was no real Federal Bank or financial monitoring in place, banks began getting stretched so thin that their very sinews were being threatened. But the feral drought wasn’t stemmed or monitored. It got to a stage where the discretionary powers of a few families were used to extend loans even to other countries.

But suddenly, those countries began running dry, so desiccate that they could not repay the loans. And close to their borders was a marauder who seized the opportunity and ran things into a veritable ‘pataal-lok’ once the Great Depression of 1929 hit the hyper-perambulating Americas. Germany’s Adolf Hitler grabbed the nuts and other sensitive bodily wherewithal to make his point—that Aryans shall rule the world. Forget that he eventually perished in a bunker with Frau Eva Braun, Hitler did manage to get a once-winging world and economy to its knees. Quite unequivocally, I proclaim now that new Adolfs, not all little, are today lurking at many international borders.

What’s the moot point?

Quite simply, we are at an economic crossroads once again and the symptoms are anything but hale and hearty. You always want statistics, don’t you? So here goes, and do read the same with a steely resolve—the debt numbers of Indians owing money to banks is hitting record highs, as people are increasingly forced to live on savings and borrowings. Banks in India are being tuned to raise lending rates and resultantly, the burden on people is only increasing. The World Bank and the International Monetary Fund have both recently warned nations worldwide, especially the so-called ‘Developed World’, to watch their economic footing and financial moves, for dire times are coming.

You want numbers too? Well, the number of ‘confirmed employees’ who have lost their jobs since 2019 is a whopping 3 per cent. The manufacturing sector is also headed for deeper trouble and malaise, as the ‘Developed World’ reduces imports, given their own sagging and flaccid economies. Get a load of this—the growth rate in Europe in hovering around the 0-per cent mark annually, while global superpower America is boasting a slightly better growth forecast of 0.5 per cent. Globally, the growth rate is an enviable (and terrifyingly scary) 1.5 per cent. This reminds me of the 1970s, when the world economy had to face two reversals in the space of a decade. Today, just after the COVID-19 meltdown, we are now staring a global recession in the face.

Look at our own Foreign Direct Investment (FDI) numbers—we claim that FDI figures were at US $83 billion in Year 2022. But we do need to remember that just foreign remittances from Indians residing abroad are at over US $100 billion annually. That procrastinates and tells us that manufacturing exports and other earnings from the global world are sliding.

Exodus of Indians

The number of Indians relinquishing the country’s citizenship and moving abroad is up by 1.7 per cent over the last decade. Data from our very own Ministry of External Affairs shows that 183,741 people renounced their Indian citizenship in the first 10 months of 2022, with 604 people leaving the country every single day (in 2014, an average of 354 people were leaving the country each day). Some research reports even claim that of the people who left the country in 2022, around 7,000 had an annual income of more than Rs 8 crore.

The reasons for the same seem to be India’s falling stature on many global rating parameters, including those related to hunger, gender gap and freedom of the press, and India is now also being cited as having the maximum number of the poor in the world. Add to this rising unemployment and cost of living and a double-whammy has been unleashed. Data from the Centre for Monitoring Indian Economy (CMIE) shows that in 2022, the unemployment level was more than 7 per cent in nine out of 12 months and the figure was 8.3 per cent in December 2022. More alarmingly, in the case of urban unemployment, it was at around 10.9 per cent.

What has led to such a fall in India’s ratings and the people’s experience of working and living in the country? The jury is still out on this one, but many claim that an already feeble global economic scenario, the implementation of a graded Goods and Services Tax (GST) regime and demonetization of larger-denomination currency notes at short notice wreaked financial and business havoc, especially amongst smaller and medium enterprises. And as the authorities attempted to bring back economic sensibility, the COVID-19 pandemic made its snarling appearance and took India and the world back many years on every front—economic, social, cultural and medical.

What can be done now?

Well, the time to act (tactically and even harshly, if needed) is now. There is no one-size-fits-all formula here. In the Indian context, many experts have propounded a five-pronged approach to bring back economic traction and forward-movement. These include tax reforms (our own expenditure far exceeds revenues); subsidy overhaul (way too much is being spent on welfare, perhaps due to populist needs); banking sector reform (bad loans and NPAs have to be reigned in or we will be staring at financial mayhem); job creation (which will instil personal pride and improve the quality of life); and improving infrastructure (many sectors such as manufacturing can see a boom if we impose clear timelines, rationalise documentation and implement single-window clearances all-around).

All of the above, and so much more, needs to be done to get the juggernaut rolling again in the right direction. And it needs to be done fast. For if this doesn’t happen and Governments worldwide do not pull back from the economic precipice through concerted actions, people will eventually have to do it on their own, as the trend of exodus in India alone shows. Remember what John McAfee said: “The gig economy is empowerment. This new business paradigm empowers individuals to better shape their own destiny and leverage their existing assets to their benefit.” If states don’t act to empower and cherish people, the people will do it on their own stead to protect themselves.

The writer is a veteran journalist and communications specialist. He can be reached on narayanrajeev2006@gmail.com. Views expressed are personal